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Wal-Mart Cancels Movie Download Service

Reuters
Friday, 28 Dec 2007 | 5:37 AM ET

Wal-Mart Stores quietly canceled its online video download service less than ayear after the site went live, a company spokeswoman said Thursday.

Walmart
Walmart

Wall-Mart shut down the download site after Hewlett Packard discontinued the technology that powered it, Walmart.com spokeswoman Amy Colella said in an e-mail. She added that it will not look for another technology partner.

HP spokesman Hector Marinez said the company decided to discontinue its video download-only merchant store services because the market for paid video downloads did not perform "as expected." He noted that the Internet video business remains uncertain and is changing rapidly.

Wal-Mart will continue offering physical DVDs for sale at its stores and online, but would not continue the online downloads business, said Colella, who declined to disclose the number of downloads sold on the site.

A message at www.walmart.com/videodownloads said the service was stopped on Dec. 21 and Wal-Mart offered no refunds for the downloaded videos.

Videos purchased on Walmart.com can be played using the Microsoft Windows Media Player or the Wal-Mart Video Download Manager, but cannot be transferred to a computer other than the one used to download them, according to the site.

The giant retailer's foray into online video downloading began in February and was hailed by media industry experts as a "game changer" that could introduce millions of DVD buyers to the practice of downloading.

Wal-Mart was the first major retailer to partner with allof the major Hollywood movie studios and TV networks to offer downloads the same day titles were released on DVD.

Wal-Mart's attempt at downloading came two years after it pulled out of online DVD rental and directed its subscribers to Netflix , and months after it protested Walt Disney's

move to sell movies on Apple Inc's iTunesonline music store at below-retail prices.

Download sales equaled about 1 percent of the $24.5 billion in DVD and home video sales and rentals in 2006, but industry experts expect downloads to grow to 10 percent within a decade.

The news of the Wal-Mart download service's demise comes onthe same day that reports surfaced of an agreement between News Corp's Twentieth Century Fox and Apple to offer thefirst movies for rent at the iTunes store.

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