March 15, 2012
Walmart to Move Customers’ Videos to the Cloud
The world’s largest retailer is going Hollywood.
Walmart Entertainment has created a licensing program allowing consumers to go to any of the chain’s stores, present any number of DVDs they own (distributed by any of five Hollywood studio partners) and have digital versions placed online for their use through a personal VUDU account. Consumers pay $2 for access to each standard DVD or can get upgraded to a high definition version for $5.
Walmart is pitching lifetime access to the content when and where consumers want it. If you’ve got an extensive movie collection and live in a house where small children use DVDs as mini-frisbees then it might make more sense to pay the per disc fee than keep buying replacements.
"Walmart Entertainment’s new disc-to-digital service will allow our customers to reconnect with the movies they already own on a variety of new devices, while preserving the investments they’ve made in disc purchases over the years," said John Aden, executive vice president for general merchandising, Walmart U.S., in a statement. "We believe this revolutionary in-store service will unlock new value for already-owned DVDs, and will encourage consumers to continue building physical and digital movie libraries in the future."
![[Image: Walmart Entertainment]](data:image/svg+xml;base64,PHN2ZyB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciIHZpZXdCb3g9IjAgMCAxIDEiIHdpZHRoPSIxIiBoZWlnaHQ9IjEiIGRhdGEtdT0iJTJGcHVibGljJTJGaW1hZ2VzJTJGZGlzY3Vzc2lvbnMlMkYxNTg3OSUyRndhbG1hcnQtdnVkdS1zdGlsbC5qcGciIGRhdGEtdz0iMSIgZGF0YS1oPSIxIiBkYXRhLWJpcD0iIj48L3N2Zz4=)
The service supports UltraViolet, Hollywood’s format for placing purchased movies on the cloud. Walmart’s partners in the venture include Paramount Home Media Distribution, Sony Pictures Home Entertainment, Twentieth Century Fox Home Entertainment, Universal Studios Home Entertainment and Warner Bros. Home Entertainment.
Count All Things Digital’s Peter Kafka among the unconvinced. He can’t figure out why people, aside from those with kids, would have much interest in the service.
For those who do have kids, Mr. Kafka wrote, "I think lots of people would jump through lots of hoops to get copies of kids’ movies on as many devices as possible. But the absence of all those Disney movies, and all those Pixar movies, sure looks like a problem for that pitch." Disney and Pixar are not among the studio partners in the venture.
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Discussion Questions: Will Walmart’s disc-to-digital service be successful? Where will Walmart face its greatest competition for cloud-based entertainment services?
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An insightful answer to this question can be garnered from the local press here in Minneapolis. The writer “would’ve expected Best Buy with its Geek Squad brand to do something like this.” Apparently a Best Buy spokesperson said that [Best Buy] would not comment on Walmart’s service “at this time.” Further speculation on Best Buy’s absence from digital streaming and cloud-based computing may be addressed with their recent hiring of Starbucks’ former CIO, Stephen Gillet. Am I the one that finds the irony in this? The largest consumer electronics retailer has hired the former CIO from Starbucks (the purveyor of coffee!) because of his experience in launching the Starbucks Digital Network.
As far as this service is concerned, it may stimulate an additional visit to the store by Walmart customers where more products will be purchased. This could be an attempt to open new business opportunities with their content partners and is a first step toward communicating their intent with their customers.
My first thought was this would be great for all the grandkid’s movies, but like Mr. Kafka, I don’t see this being much value when you can’t use the service for Disney or Pixar movies. Being able to access other movies on a tablet or phone may have some appeal but the regulations prohibit me from viewing at the place I would like to do so the most — on a plane. There I can always use my laptop to play the DVDs.
The problem is competing formats. Here we go again with Beta and VHS, BluRay and HD. If cloud storage for currently owned DVDs is going to stand any chance of success, it must be supported by all of the studios, be linked with recently purchased online libraries (iTunes and Amazon) and be accessible on any device that can connect with the cloud. VUDU fails in two of those criteria. It does not have the support of all of the studios and it is not linked with iTunes or Amazon.
How many format battles are consumers expected to endure before they throw up their hands and refuse to participate?
It sounds like another pay per view that parents try to avoid when they buy DVDs. This program seems counter intuitive to me. And if highly desirable movies/sources are not included it becomes more of a hassle. I can’t see a justifiable upside for consumers.
My question is, if I have limited capability for playing online video on my TV currently and for a long time still, why would I spent 2 to 5 dollars to make public content available online? Also, when I get the ability to more easily stream content to my TV, I may be able to stream the same content to my TV through my content device using Amazon.
While it’s not likely to be a perfect offering, I give kudus to Walmart. Even if it’s imperfect, it’s another reason for a segment of shoppers to make a store visit, and rely upon Walmart for a valuable “service.”
In a time when all retailers are trying to add more services to their mix to augment margins from low-margin hard-goods, that alone is a win. Throw in the surprise and delight element that you are getting your technology problem solved by Walmart (rather than Apple or Best Buy), and it’s hard to see how this could be considered a miss-step.
I also think it adds real value for a small segment of consumers. Imagine you were the Walmart shopper who did buy the occasional non-Disney DVD. Now you have a chance to give that “Plastic Circle” collection new life for a nominal cost. For $2 you can permanently have Lethal Weapon available on every TV in your home and device in your family, or for $5 you can upgrade to the quality Blu-ray version. It might even be the service that gets urban yuppies with large “Plastic Circle” collections to make their first visit to a Walmart.
This might work as a version 1 product that proves the concept, attracts patient tech-savvy followers, and adds missing elements into version 2. Version 2 requires compatibility with Android, appeal for kids (read: Disney/Pixar, titles worth owning for repeat-watching), and perks from the UltraViolet service that target the less tech-savvy. Unfortunately, it’s very difficult for Walmart to start with a version 1 product and ask for patience, particularly since the tech-savvy already know how to rip their own DVDs. The Walmart brand implies large market, ready for the masses.
At $.99 (interspersed with Rollbacks to $.49) Walmart can start to build a user base, particularly by emphasizing the upgrade to HD. But I’m afraid the per-unit revenue share expectations of the studios precludes Walmart price points.
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An insightful answer to this question can be garnered from the local press here in Minneapolis. The writer “would’ve expected Best Buy with its Geek Squad brand to do something like this.” Apparently a Best Buy spokesperson said that [Best Buy] would not comment on Walmart’s service “at this time.” Further speculation on Best Buy’s absence from digital streaming and cloud-based computing may be addressed with their recent hiring of Starbucks’ former CIO, Stephen Gillet. Am I the one that finds the irony in this? The largest consumer electronics retailer has hired the former CIO from Starbucks (the purveyor of coffee!) because of his experience in launching the Starbucks Digital Network.
As far as this service is concerned, it may stimulate an additional visit to the store by Walmart customers where more products will be purchased. This could be an attempt to open new business opportunities with their content partners and is a first step toward communicating their intent with their customers.
My first thought was this would be great for all the grandkid’s movies, but like Mr. Kafka, I don’t see this being much value when you can’t use the service for Disney or Pixar movies. Being able to access other movies on a tablet or phone may have some appeal but the regulations prohibit me from viewing at the place I would like to do so the most — on a plane. There I can always use my laptop to play the DVDs.
The problem is competing formats. Here we go again with Beta and VHS, BluRay and HD. If cloud storage for currently owned DVDs is going to stand any chance of success, it must be supported by all of the studios, be linked with recently purchased online libraries (iTunes and Amazon) and be accessible on any device that can connect with the cloud. VUDU fails in two of those criteria. It does not have the support of all of the studios and it is not linked with iTunes or Amazon.
How many format battles are consumers expected to endure before they throw up their hands and refuse to participate?
It sounds like another pay per view that parents try to avoid when they buy DVDs. This program seems counter intuitive to me. And if highly desirable movies/sources are not included it becomes more of a hassle. I can’t see a justifiable upside for consumers.
My question is, if I have limited capability for playing online video on my TV currently and for a long time still, why would I spent 2 to 5 dollars to make public content available online? Also, when I get the ability to more easily stream content to my TV, I may be able to stream the same content to my TV through my content device using Amazon.
While it’s not likely to be a perfect offering, I give kudus to Walmart. Even if it’s imperfect, it’s another reason for a segment of shoppers to make a store visit, and rely upon Walmart for a valuable “service.”
In a time when all retailers are trying to add more services to their mix to augment margins from low-margin hard-goods, that alone is a win. Throw in the surprise and delight element that you are getting your technology problem solved by Walmart (rather than Apple or Best Buy), and it’s hard to see how this could be considered a miss-step.
I also think it adds real value for a small segment of consumers. Imagine you were the Walmart shopper who did buy the occasional non-Disney DVD. Now you have a chance to give that “Plastic Circle” collection new life for a nominal cost. For $2 you can permanently have Lethal Weapon available on every TV in your home and device in your family, or for $5 you can upgrade to the quality Blu-ray version. It might even be the service that gets urban yuppies with large “Plastic Circle” collections to make their first visit to a Walmart.
This might work as a version 1 product that proves the concept, attracts patient tech-savvy followers, and adds missing elements into version 2. Version 2 requires compatibility with Android, appeal for kids (read: Disney/Pixar, titles worth owning for repeat-watching), and perks from the UltraViolet service that target the less tech-savvy. Unfortunately, it’s very difficult for Walmart to start with a version 1 product and ask for patience, particularly since the tech-savvy already know how to rip their own DVDs. The Walmart brand implies large market, ready for the masses.
At $.99 (interspersed with Rollbacks to $.49) Walmart can start to build a user base, particularly by emphasizing the upgrade to HD. But I’m afraid the per-unit revenue share expectations of the studios precludes Walmart price points.