Why I fear the dominance of the Wal-martians
Posted by Dennis Sellers 
Sep 1, 2006 at 5:55am
In the battle of movie downloads, it’s shaping up as Apple verses Wal-Mart, according to BusinessWeek Online. I’m rooting for Apple, and not just because it makes my favorite computer and MP3 player, but also because the retail giant is just too darn powerful.
Apple is selling TV shows and some videos at the iTunes Music Store, but everyone anticipates that this is merely the tip of the iceberg. Bets are riding that Apple will, sooner rather than later, offer movie downloads (at the iTunes Movie Store?) and a “true” video iPod. CEO Steve Jobs has the clout, the influence in Hollywood (can you say Pixar and a seat on Disney’s board of directors?) and the moxie to make this happen.
BusinessWeek Online forecasts that Apple will start offering movie downloads in mid-September. Meanwhile, Wal-Mart is the largest seller of DVDs, accounting for roughly 40 percent (yep, 40 percent!) of the US$17 billion in DVDs that will be sold this year.
“The notion of kids running around with full-length movies on new, wider-screen iPods that Apple is expected to unveil as well is causing grief in Bentonville, according to Hollywood executives,” Ronald Grover writes for Business Week Online. “The $312 billion a year retailer, they say, wants concessions that could include lower DVD wholesale prices … what does Wal-Mart want this time to play nice? Executives who have met with Porter [a company official] say it wants marketing help when it launches its own planned download site. And it wants Hollywood to trim the current $17 wholesale price for DVDs. That would let Wal-Mart slash its own prices to the same $15 or so that Apple would charge. (The plan is for Apple to pay a $14 wholesale price for new releases, say sources, although negotiations continue.) A large wholesale cut for Wal-Mart, of course, would amount to hundreds of millions in lost studio revenues each year at a time when DVD sales are slowing.”
It’s not pity for the movie studios that have me rooting for Apple and against Wal-Mart. And it’s not that I think the retail giant is inherently evil (heck, my widowed mother shops there to make the most of her tight budget). But I’ve seen (cue Alan Jackson’s “Little Man” here) the Big W put small businesses out of business in places such as my hometown of Huntingdon, Tennessee. I’m a big fan of mom ‘n pop shops, and feel American culture suffers as such establishments wither and die.
Wal-Mart’s fortunes are certainly booming, and the establishment poses a serious threat to whomever it takes on—including Apple. Heck, Wal-Mart reported that total sales for the four-week period ended Aug. 1 increased 11.9 percent to $18.6 billion, while the company’s Wal-Mart division also experienced a double-digit sales gain for the month. The Wal-Mart division’s sales increased 11.5 percent to $12.6 billion, while comparable-store sales increased 4.5 percent.
I have a vision of a Wal-Mart store that grows so big, it takes over an entire town such as the one I grew up in. People will shop there, work there and live there (in the Wal-Mart Apartments). They’ll worship at the church of Wal-Mart, watch Wal-Mart TV and catch flicks at the Wal-Mart Multiplex. They’ll truly be Wal-martians.
Worse yet, imagine if Wal-Mart and Microsoft teamed up. They could conquer the world. It’s up to Jobs & Company to stop these nefarious scenarios from happening.
Thoughts? Write me at daseller@earthlink.net
viva mac Says:
down with biblio
dennis you not being impartial here
globalisation is everywhere
Posted on September 01, 2006
JuggerNaut Says:
I definitely want to see Wal-Mart lose this battle!
Posted on September 01, 2006
InTheShelter Says:
Globalisation? Were we reading the same article? This had nothing to do with globalisation and all to do with Walmart’s heavy handed tactics and unhealthy dominance in the markets they enter. Globalisation is not the same thing.
Please turn off the evening news with their buzzword of the day.
Posted on September 01, 2006
mike Says:
i so agree with you.
my small business was forced to close up after walmart started screwing us…
just because wal mart is big, doesnt mean that they should get better treatment from hollywood.
i mean, as a business man, wouldn’t it make more sense for hollywood to invest in apple, or similar companies who have countless room for growth?
I don’t know… just a thought.
Posted on September 02, 2006
Rainy Day Says:
I shopped at a Wal-mart once. Afterward i had to go home and take a shower. I hated the experience so much, i’ve never been back to one of their stores.
But the truth is that it is not Wal-mart which is killing small mom-and-pop stores, but the defection of their customers to lower priced alternatives, like Wal-mart. It is a subtle – yet significant - difference. The problem is customers to do value the benefits of mom-and-pop stores enough to patronize them when lower priced alternatives are conveniently available to them.
As much as i dislike Wal-mart, i cannot blame them for this trend. If not Wal-mart, it would be somebody else.
The market is like a flowing river. It seeks the lowest ground. And if you damn up one course, the current will find another outlet. If Wal-mart were to stop carrying DVDs tomorrow, do you really think their 40% of the marketshare would stop buying movies? Their customers would simply find other sources. Perhaps some Wal-mart customers make impulse DVD purchases, and those sales might be lost, but by and large the purchasing would simply shift to other outlets.
Posted on September 02, 2006
Rick Says:
In the long term, WalMart, like every major discounting chain, will experience shrinkage-- especially if people decide that they WANT the more personal, neighborhood vendors to get their business.
Do people forget that WalMart started as a neighborhood store many years ago? They just were REALLY good at it. Same with Borders Books, Papa John’s Pizza, Domino’s Pizza, and so may other big chains that currently dominate but weren’t heard of a few years ago.
Take a pill and relax. Buy your pill at WalMart or don’t. In time, the landscape will change again. Such is the nature of the business world. Many small businesses continue to do fine to fantastic because they have been smart about accommodating changes in the business landscape, even in the presence of the Great Wal.
I understand where sentimentality comes in for “the ways things were,” but don’t people realize their own short-sightedness? Every “the way things were” was death to someone else’s!
Posted on September 02, 2006
Rainy Day Says:
Typo: Meant to say “customers do not value the benefits of mom-and-pop…”
Posted on September 02, 2006
JGE Says:
My problem is with Walmart’s entitlement attitude. They seem to think that it’s more important that they maintain their DVD business than Apple it is for Apple to create another consumer offering. Further their request for help in marketing their Download service seems to say that the Studio’s responsiblity to help them compete with new competitive forces.
If the Studio’s have any spine they would tell Walmart where to get off....but I’m not sure they have spines.
Posted on September 02, 2006
R Says:
Do you know any business that doesn’t seek its own interests?
Posted on September 02, 2006
Mike Says:
What’s the real problem here?
Just because the Walton’s want to be Aristocrats and therefore Wal-mart employees Must become Serf’s? What’s the problem? It’s this just Capitolism? Are you anti-American?
A Republa-Crook.
Posted on September 03, 2006
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Contributor
Dennis Sellers
Dennis has been a newspaper editor/reporter (seven years) and teacher (seven years). He has over 4,000 magazine, newspaper and online articles to his credit. He has also covered the Mac and tech industries for over a decade for such online publications as MacCentral, MacMinute and now MacsimumNews.
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Bibliotech Says:
This is an unusually passionate editorial for you, Dennis. I, too, dislike Walmart for the stated reasons as well as others such as the low wages they pay their employees and, especially vile to me, the fact that they censor what they sell, either in content or by refusing to sell it at all.
The sad fact, however, is that online retail is killing small mom and pop stores of all sorts these days. Small video stores can’t compete with Netflix or Amazon. iTunes is fantastict for browsing and picking up old songs I miss from the vinyl (or 8-track) days, meaning I don’t visit the retailers here much anymore. We have lost three private book stores in two years.
There isn’t really an answer to all this, I guess. Small stores will develop a niche and survive, or they won’t. In smaller towns (I live in the Twin Cities) most won’t, but perhaps entrepreneurs will develop totally new concepts in retail or service we haven’t thought of yet to exist side-by-side with the giants.
Posted on September 01, 2006