Target Joins Walmart with iTunes Concerns

[2ndPath]

Technology is evolving all the time. And if movies are not offered for sale via download, there will be just more people downloading movies from filesharing networks without any profit for the movie companies. Certainly a part of the legal dowload business would go to companies like Wall Mart or Target, but on the bottom line the profit will be smaller for the movie companies because of more illegal downloads.

The same thing happened with music before and it was seen that many of the people using illegal download networks were also satified with a reasonable legal download service. Many people just wanted the comfort of not having to drive to a store to pick up a CD.

 

[Ladybug]

For years WalMart has moved into many small towns, and undercut everyones prices repeatedly, driving all the Mom & Pop stores out of business. As long as they were hurting someone elses bottom line, they seemed to think that this was competition and very much acceptable.

Now that Apple wants a piece of the pie, its suddenly unfair. Sorry WalMart, either get in the game or find something new that works for you. No sympathy from me.

 

[Counter]

Digital distribution of movies isn't going to put any sizeable dent in dvd sales for a long time. If ever at the current prices, which I extremely doubt will be reduced.

 

[asphalt-proof]

For those of you saying that we live in a capitalistic society... not by a long shot. Corporate welfare is MUCH MUCH bigger than any fictional welfare queen in Brooklyn. These companies receive tax cuts, loopholes, exemptions far beyond what a middle class suburban couple has access to.

What Target and Walmart are doing is actually against some of the monopoly legistation that was passed in the early 20th century. One of the tenets was that a company coulodn't tell another producer who they could sell to, at what price, etc. This prevented a very large company from gaining to much of an advantage over their competitors.

What Target and Walmart are probably threatening is to just jack up the prices on the DVDs a couple of dollars. This improves their bottom line and reduces the number of impluse buys a consumer makes on a DVD. Or to not put DVD on encaps, in front of the stores next to the checkout. They really do have a myriad of ways of making the studios lose some profit. At tsome point though, the retailers are going to shaft themselves. It really is a game of chicken and the first one to blink, gets the bullet in the head (how's that for mixed metaphors?)

 

[lazyrighteye]

Negative?

Who rates this negative?
Unless I misread the report, basically all Target did was remind the studios that the DVD format is in jeopardy and they better get with the times or Target will. And if studios need Target and Wal-Mart to tell them that, they're in more trouble than I ever thought.

Assuming that studio execs have 1/2 a brain, then they must be well aware that the DVD format is obsolete. They must also recognize that digital distribution directly to computers (or TVs), is the one of the next delivery methods. Now, assuming they know this, they sure are doing a lousy job of offering us alternatives. Problem is, Hollywood's had it too good for too long. Complacency breeds laziness. Adapt or die. And it sounds like Target intends to adapt.

That said, the underlining message here is that (like it or not) companies like Apple are driving the distribution bus. We're witnessing a changing of the guard, so to speak. Which is the reason I rate this "rumor" a positive.

Now if we could just get the same kind of revolution in the mobile phone market...

 

[Earendil]

Who rates this negative?
Unless I misread the report, basically all Target did was remind the studios that the DVD format is in jeopardy and they better get with the times or Target will. And if studios need Target and Wal-Mart to tell them that, they're in more trouble than I ever thought.

My understanding was different. I take it that they are taking the same stance that Wal-Mart is, and that is that if the movie industry allows iTunes to sell movies, they will make the record companies pay for it (in a negative way). The retailers aren't ready to take on iTunes and the online market, so they are going to use their power to stall the transition to digital downloads as long as they possibly can.

What Target is doing is anti Apple, and more importantly, anti the progression of technology and lifestyle.

 

[bretm]

For those of you saying that we live in a capitalistic society... not by a long shot. Corporate welfare is MUCH MUCH bigger than any fictional welfare queen in Brooklyn. These companies receive tax cuts, loopholes, exemptions far beyond what a middle class suburban couple has access to.

What Target and Walmart are doing is actually against some of the monopoly legistation that was passed in the early 20th century. One of the tenets was that a company coulodn't tell another producer who they could sell to, at what price, etc. This prevented a very large company from gaining to much of an advantage over their competitors.

What Target and Walmart are probably threatening is to just jack up the prices on the DVDs a couple of dollars. This improves their bottom line and reduces the number of impluse buys a consumer makes on a DVD. Or to not put DVD on encaps, in front of the stores next to the checkout. They really do have a myriad of ways of making the studios lose some profit. At tsome point though, the retailers are going to shaft themselves. It really is a game of chicken and the first one to blink, gets the bullet in the head (how's that for mixed metaphors?)

First, no company pays taxes. YOU pay all their taxes. In a capitalistic society it doesn't matter if they are given tax breaks or increases. It is all passed on to the consumer to achieve the bottom line.

You cite it yourself in your misunderstanding that Walmart or Target will just jack up their prices to increase their profit. That's what a company does if your increase their corporate taxes. Decrease them and they can better compete.

Now Walmart and Target jacking up their prices probably wouldn't hurt anyone but Walmart and Target. They may make more per item but obviously they would sell less DVDs. And since they're not in cahoots with each other (THAT would actually be a monopolistic type practice) neither can actually jack the price, because everyone would simply go to Walmart or Target respectively. Or Best Buy, or Curcuit City or whoever. Walmart may be the biggest seller of DVDs, but it they yank them then they won't be. And they won't pull people into their stores to buy stuff they actually make profit on. Another company will glady pickup the slack.

The reason Walmart and Target are all talk is because they have no hand. None. They're backed into a corner. Thier best bet is to open their own online download biz.

This stuff is the same year after year. Companies ride their little economic model for years without looking to the future. Then they complain moan and threaten. If they really had options, they would simply implement them.

 

[bretm]

My understanding was different. I take it that they are taking the same stance that Wal-Mart is, and that is that if the movie industry allows iTunes to sell movies, they will make the record companies pay for it (in a negative way). The retailers aren't ready to take on iTunes and the online market, so they are going to use their power to stall the transition to digital downloads as long as they possibly can.

What Target is doing is anti Apple, and more importantly, anti the progression of technology and lifestyle.

Yep. It's simply an attempt to buy some time. They know they can't fight it in the end.

 

[baleensavage]

"If you play with Billy down the street, we're not going to be your friends any more! Nah Nah."
Target and Walmart sound like they are run by bratty jealous kids. Besides, I can't see how movie downloads are going to threaten DVD sales anyway. HBO didn't stop VHS sales. Netflix hasn't stopped DVD sales. Cable on Demand hasn't stopped DVD sales either. People want to buy things. They want to own them. They want something to hold in their hand with pictures and a booklet. Sure people will download TV shows or some movies to watch on their iPods on a commute, but it's not going to kill the DVD market. The only thing likely to kill the DVD market is this bogus format war going on between Sony and Toshiba. Now noone is going to want to buy any HD format because they dont want their purchase to be obsolete next year.

On another note, how is this kind of corporate bullying legal? Doesn't the government actually try to enforce any antitrust laws any more? (rhetoric question)

 

[Cowinacape]

Ah shut up you bastards...

Would have to pretty much agree with you. Big boxes getting nervous?? To bad!

 

[bketchum]

Rick Aristotle Munarriz, of Motley Fool, has a great response to this story...

http://biz.yahoo.com/fool/061010/116050625611.html?.v=1