Analyst says Wal-Mart’s entry to video downloads will kill the DVD

I don’t personally know Rob Enderle, an independent analyst at the Enderle Group, in fact I had never even heard of him until I read this article on Reuters talking about the Wal-Mart movie download service. But I really have to wonder what these analysts are thinking.

He’s quoted as saying Wal-Mart’s download offering is a "game changer" that will help set off "a long decline" for DVD sales. "We are talking about the beginning of the end for DVDs." The end of DVD’s?!? How can you make a blanket statement like that to the media and expect anyone to take you seriously or think that you have any expertise in the online video market?

The fact that Wal-mart has movie downloads is not going to change anything unless they make it a service that works and is friendly and more importantly, a service that consumers adopt. It does not support Mac users, the website can’t be viewed in either the Safari or Firefox browsers and nowhere that I can find does it say how these movies are compressed. What is the quality? And why can’t you transfer a download to the media center, iPod or another device or burn yourself a copy? Because that technology is currently "limited" as a Wal-mart executive was quoted as saying.

Of course, Wal-mart is under the belief that their new service is revolutionary Kevin Swint, Wal-Mart’s divisional merchandise manager for digital media said, "…this is an unprecedented offering of video content, features and capabilities currently unmatched in the market". Really? Back it up with facts that support those statements then. Bambi Francisco from MarketWatch has a video interview with him on her blog.

Isn’t this the same thing Wal-mart said when they came out with the DVD rental service and tried to complete with Netflix? And that lasted what, maybe a year? So far, to date, consumers in the U.S. have not had the desire to get their movies via downloads. Will that change if the services on the market are easy, affordable and provide options customer’s want? Yes. But movie downloads are never even going come close to affecting the traditional DVD business.

Sponsored by

Why I Started This Blog

While there are a lot of blogs out there already, none of them really focuses on the business aspects of the industry or they cover other subjects not pertaining to online video. As you well know, there are a lot of exciting things going on in the industry but it seems many of them get overlooked and the majority of what you end up hearing about is YouTube. The goal of my blog is to focus on all kinds of online video technology (not just streaming) and the business associated with it. I also plan to use the blog to include profiles and mini interviews with other executives in the industry and will use the blog to highlight conference sessions at the Streaming Media East, West and Europe shows so that I can get feedback on topics people want to hear about.

For me, this blog is yours just as much as it is mine. I welcome you to send me topics you want to see discussed and I will post them on your behalf with your name and company. I look forward to your involvement.