Wal-Mart Closes Video Download Store

Call it another victim of the Superman curse. Wal-Mart has closed down its movie download service, which had only begun back in February. The retail giant had been slow to start selling movie downloads, finally offering Superman Returns in November 2006 -- part of a strange deal in which you had to first buy the actual DVD from a Wal-Mart store -- then completely opening up shop early last year in an obvious attempt to directly compete with iTunes, selling TV episodes for 4 cents less than Apple's store (it also sold older movie titles at a cheaper price). It had long been speculated that Wal-Mart was even behind iTunes' struggle to make deals with Hollywood studios; supposedly Wal-Mart was fearful that downloads would hurt its massive share of the DVD market and so pressured Hollywood to stay away from Apple or suffer the consequence: Wal-Mart would stop ordering so many of a studio's DVDs if it signed on to iTunes. Of course, it didn't appear that Wal-Mart was about to begin boycotting Disney movies, so that rumor/assumption/conspiracy was likely untrue, or at least a bad bluff.

Now, with Fox and Disney movies soon available for rental on iTunes and more studios likely to come soon, it is clear that Wal-Mart failed in its competitive bid for a share of the download market. The retailer also had problems competing with Netflix in the rental-by-mail service race a few years back, eventually folding into its competition. However, this time around the problem is less to do with Wal-Mart caving in or acknowledging defeat. The primary reason for the download shop's closing is that Hewlett-Packard was supplying the software for the online store and that company made the decision to terminate the service, citing disappointing performance as the cause. Wal-Mart could still continue with movie downloads through another software deal, though this giant pothole in business would hardly make the relocation an easy task.