Why I fear the dominance of the Wal-martians

Posted by Dennis Sellers Sep 1, 2006 at 12:55am

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

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