Target Whines to Studios About Movie Downloads

I must have missed the memo about this officially being Whiny Mega-Retailers Month. A little over a week ago, we told you how uber-rich Wal-Mart was bitching about the new iTunes movie store, and how only Disney titles are offered there at the moment, perhaps because Wal-Mart (the big bully on the movie distrib playground, apparently) sent a letter to studios this summer warning -- that's right, warning -- studios that it is not going to just idly stand by and watch studios focus on downloads while DVD sales are heading south. Wal-Mart, as the leading seller of DVDs (which are Hollywood's biggest source of revenue), apparently has the muscle to dictate studios' business to them.

Not to be outdone, Greff Steinhafel, President of Wal-Mart's rival company, Target, has sent his own letter to major studios, whining about how movie download prices are below DVD prices, according to a Wall Street Journal story published yesterday. The letter reportedly said that Target would "reconsider its investment" in the DVD business if pricing isn't made more equitable ("equitable" here presumably meaning "lining our coffers with more cash and increasing the value of my own stock options so I can afford that private school tuition and new yacht").

As our sister site Engadget reported yesterday, Target and Wal-Mart both need to relax a bit on the whole movie download issue. The quality of movie downloads isn't even close to the quality of DVDs and won't be for a long time, and the prices aren't exactly bargain-basement -- it's simply just another channel for customers to choose from. Instead of whining about how movie downloads are going to sound the death-knell of DVD sales, major retailers like Wal-Mart and Target need to focus on finding ways to incent customers to buy DVDs instead (better features, better quality, special offers, exclusive content), while simultaneously finding ways to partner with studios and move into the digital download space themselves.

The market is ultimately going to dictate the future of movie downloads; if customers want it and will pay for it, and the product is good enough to support it, it's going to happen, and either DVDs will compete and hold their own market share, or they'll eventually go the way of the eight-tracks, cassette tapes, and VHS. Threatening the studios that if they don't give in, Target and Wal-Mart are going to take their balls and go home, isn't going to benefit studios or the retailers in the long run. When the game changes, guys, you don't pout and stop playing. You learn the new rules -- or better yet, make your own rules and own the game. Nobody likes a whiner.