Wal-Mart Scales Back DVD Displays (Dinosaur Media DeathWatch™)

The Wall Street Journal ^ | October 5, 2009 | Nat Worden

[abb]

A recent shift in merchandising strategy by the world's largest retailer spells more trouble for DVD sales and the entertainment industry that depends on them for profits.

As part of a larger effort to clean up its aisles and appeal to higher-end shoppers, Wal-Mart is doing away with display cases to promote the latest hot movie titles.

The move comes as major film studios are reeling from declines in revenue from DVD sales as cash-strapped consumers turn to low-cost rental services and digital downloads for home movies.

"We think the new strategy implies Wal-Mart no longer sees DVDs and Blu-ray discs as traffic drivers," J.P. Morgan analyst Imran Khan said.

The change to its DVD selling strategy is part of a larger merchandising overhaul the company calls "Project Impact," in which it has been devoting more shelf space to top-selling products and cutting back on items that linger. The discount giant also is trying to spruce up its image and cut back on clutter in its aisles, like corrugated displays for DVDs, in hopes that it can attract a more upscale shopper.

As for DVDs, the Digital Entertainment Group estimates that overall U.S. retail sales fell 13.5% to $5.4 billion during the first half of 2009. At the same time, DVD rentals rose by 8.3% to $3.4 billion. Digital sales and rentals from services like Amazon.com Inc. and Apple Inc.'s iTunes rose 21% to $968 million.

Video on-demand revenue from pay-TV service providers, like Comcast, is also rising. Comcast says the company served 368 million total views on its VOD platform in July, up 11% from last year.

Meanwhile, Wal-Mart and other major retailers, along with several fast-food chains, have been adding low-cost DVD rental kiosks near store entrances provided by Redbox Automated Retail, a division of Coinstar Inc.

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[abb]

Monday morning good news

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ping

[rovenstinez]

Stimulus, Stimulus, call the White House, cant let something so big...fail.

[rovenstinez]

Stimulus, Stimulus, call the White House, cant let something so big...fail.

[GnuHere]

I actually picked up a DVD at WalMart of a movie I wanted to see - The Bucket List. $13. No thanks, for a DVD I would watch once and never repeat it makes no sense.

[abb]

http://www.latimes.com/business/la-fi-ct-hulu5-2009oct05,0,980649.story
Will Hulu make you pay to watch?

http://www.latimes.com/entertainment/news/tv/la-et-chandlers5-2009oct05,0,238190.story
‘Inventing LA: The Chandlers & Their Times’

http://adage.com/mediaworks/article?article_id=139445
U.S. Media Revenue Set for Historic 2009 Decline

http://adage.com/mediaworks/article?article_id=139441
Comcast and NBC Eye Merger as Media World Reckons With Shrinking Ad Budgets

[abb]

http://www.broadcastingcable.com/article/356594-Cover_Story_Red_Stations_Blue_Stations.php
Cover Story: Red Stations, Blue Stations
Local TV takes a page from the O’Reilly-Olbermann cable news universe in a bid to stay relevant

http://www.nytimes.com/2009/10/05/business/media/05carr.html?ref=media&pagewanted=all
Of Layoffs, Bankruptcy and Bonuses

[Sacajaweau]

I get mine at garage sales for a buck....The library loans them for FREE!!

[Huck]

We cancelled our direct tv subscription. We can watch The Office on hulu for free.

[Dallas59]

DVD Fab, DVD Shrink, DVD Decrypter+ Blockbuster.

[DuncanWaring]

+ terabyte hard drives.

[Zakeet]

This article is worthy of more attention:

U.S. Media Revenue Set for Historic 2009 Decline

Just how tough has the media space become? The nation's top 100 media companies eked out 0.8% revenue growth in 2008 -- and the reported revenue for top media firms in the first half of this year fell 4.3% from a year ago, according to Ad Age's analysis.

So not only was last year's Media 100 revenue growth the lowest since 1991, this year it's on track to show the first decline since Ad Age began ranking top media firms in 1981.

Remarkably, 11 of last year's Media 100 firms have plunged into bankruptcy reorganization, overwhelmed in most cases by shrinking revenue and debt loads taken on during the blind optimism of the boom. Print media dominate the bankruptcy list: six newspaper companies, two magazine publishers and two yellow-pages publishers.

That points to the momentum going toward digital-media firms, right? Not so fast.

[Snip]

If you factor out cable systems/satellite TV, Media 100 revenue in 2008 shows a decline of 2.2%. Numbers in 2009 are far worse: Reported revenue for major media companies through the first half of 2009, excluding cable systems/satellite TV, was down 8.3% from a year ago, according to the Ad Age DataCenter.

[Snip]

Sector performance varies widely in the Media 100. The biggest losers are no surprise: newspapers, where revenue plunged 13.5% in 2008. Magazines did better, with revenue falling 6.9%. Revenue for broadcast TV (including networks and local stations) dropped 4.6%.

[HiTech RedNeck]

Less “piracy” I think, than renting.

Wal Mart would certainly have the wherewithal to put something like a Super Redbox in its electronics area. Rent one of 10,000 titles, or if you prefer buy it and keep it.

[Condor51]

"We think the new strategy implies Wal-Mart no longer sees DVDs and Blu-ray discs as traffic drivers," J.P. Morgan analyst Imran Khan said.

Uh .. I'm no expert like you Mr Khan but maybe it's something else...

1. Consumers don't buy trash. And that's all Hollyweird is pushing today. Oops, 'producing'.
   
2. Consumers woke up. They realize that DVDs and Blu-ray discs are the next Video Tape. And there's no sense buying something that'll b eobsolete in a few years.

We must have 100 VCR tapes of movies we bought. Except for true classics like Lassie, The Wizard of Oz, Old Yeller₍₁₎, Spartacus, The Good, The Bad and The Ugly, and a Triple Set of Randolph Scott Westerns :-) I look at them now and say, why did we buy these? (Like: Peggy Sue Got Married. yuk!)

(1) I can't watch Old Yeller as I still choke up, and I'm 61 now. (Plus now we have a 'Yeller' Dog)

[HiTech RedNeck]

DVD blanks can obviously also be had cheap. Several ordinary DVDs will fit on one Blu-Ray.

[Dallas59]

5 externals @ 500 GB each. 750GB internal.

[mainepatsfan]

I really wonder how long Blu-Ray discs will hang around considering the advent of digital downloads.

[abb]

Digital=Ease of Distribution=Ease of Duplication=More Plentiful=More Choice=Fracture of Marketplace=Reduction in Prices. And it will just keep on going.

Or put another way, used to all you could watch was what the three networks aired and you could only watch it when they decided. It’s easy to make money when things are set up that way.

[Varda]

I received a Blu-ray player with bonus points from my credit card. I have a home theater with projector and sound system but I haven't bought a single disk. I will just as soon as there's something worth buying.

[Tolsti2]

Hopefully a long long time. downloads SUCK. They compress the hell out of them, and even at a 10 megabit connection you’re less than 1/4 of what Blu-ray can produce.

[abb]

(1) I can't watch Old Yeller as I still choke up, and I'm 61 now. (Plus now we have a 'Yeller' Dog)

Myself.

"I know, Ma. But he’s MY dog…I’ll do it.”

[mainepatsfan]

I will just as soon as there's something worth buying.

Heck the majority of my DVD collection are historical documentaries rather than movies.

[libertarian27]

The movie and tv universe is shifting quickly.

I haven’t bought a DVD in years, canceled my Netflix and watch most Movies and TV serial/1 hr shows(43min) on the internet by streaming....I’m about ready to cancel satellite.

[RonnG]

When the target demographics for new movie releases is adloescent males 16-21 yrs old, is there any wonder nobody will pay to buy them or even rent them?

[mikelets456]

I have 3 HD TV sets and have not bought a DVD in over a year...possibly more. Screw you Hollywood!!! I can not even remember the last time I rented a DVD let alone been to a movie! Also, I refused to buy a BD player...watching HD sports and having over 100 legit HD channels it enough for me.

Also, I DO NOT have any of the movie channels...just more Hollywood BS!

[Eric in the Ozarks]

DVDs, produced by the same fine folks who believe Roman Polanski committed a victimless crime.

[Nickname]

If you’re an occasional movie watcher, I recommend Redbox if there’s one in your area. There’s one at the grocery store I frequent; they have no subscription fee, carry new releases & they’re $1.00 per night.

http://www.redbox.com/home.aspx

[Nickname]

Oh and an added benefit is that Hollywood unions hate ‘em.

http://www.freerepublic.com/focus/f-chat/2334868/posts

[Robe]

I have a friend whose wife works for Wal-Mart’s loss prevention... Se said at dinned that our local Wal-Mart had 1 Million $$$$ loss in their DVD/CDs this year.. When I whistles and said that was a bunch of money out of a local store.. She responded by saying that “that’s Good.... most other stores loose more that that”
I think that this might be the real reason Wally-Mart is doing this ..

[mikelets456]

However, I “will” buy a used DVD if I really want it...I assume used DVD $$$ do not go to Hollywood! However, the last time I bought any has been a very long time! I did rent from REDBOX about 5-6 months ago. I figure $1 to Hollywood is better than $20...but like I said, I have not rented in a while either unless there are conservative actors or film makers...which is few and far between.

[Varda]

The stuff I want to own isn’t or won’t ever be on Blu ray. (mostly old movies , BBC dramas) Some hasn’t made it to DVD (the 50’s era anti-communist movies).

[ace2u_in_MD]

Digital Downloads future are tied to the penetration of High Speed Internet that does not rely on a shared architecture (ie, cable modems) and enough DRM to make providers happy.

IMHO, Apple has turned that corner regarding music, with Home Network Sharing that allows 1 download to be placed on up to 5 iTunes libraries associated with the same account and residing on the same network. Yes, it has been allowed for a long time, but has either been a manual process, or needed third party software (TuneRanger).

Only when pipes big enough to handle 720P at a minimum (and more likely 1080P) without reducing your entire neighborhood to a crawl will the need for physical disc media be ended.

[GonzoGOP]

Heck the majority of my DVD collection are historical documentaries rather than movies.

Most of my DVD collection are movies the kids got as presents. I also by series, like Furturama or South Park, where I like to throw them on as background noise. Rental and download are going to be the choice for one time watching. My gut instinct is that Blu-Ray is eventually going to replace CD & DVD as a permanent storage medium. But that it is going to take a very long time. DVD does a fairly good job for permanent storage of downloaded video. And almost everyone has a DVD burner already.

I'm not going to run out and replace both of my laptops, my server, and buy two blu-ray players so all the places I might watch a video are blu-ray compatible. Not in this economy anyway. Besides my car's stereo can read MP3's off of a DVD and I'm not going to replace that any time soon.

[mainepatsfan]

I'm not going to run out and replace both of my laptops, my server, and buy two blu-ray players so all the places I might watch a video are blu-ray compatible. Not in this economy anyway

I've noticed the prices on the Blu-Ray players at WalMart have dropped quite a bit in the past year. They ain't selling many blu ray discs as long as the players are priced out of too many consumers.

[GnuHere]

I have seen one at the McDonald’s. Makes more sense than paying over $10 for a DVD. If I want to pay that much, I’ll go to the theater for a tik and popcorn.

[GOPJ]

Most Hollywood movies aren’t worth seeing once, no less having a copy at home...

[abb]

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=114776
GOP: Neutrality Rules Will Thwart Broadband Investment

http://www.washingtonpost.com/wp-dyn/content/article/2009/10/04/AR2009100402982.html
He’s Back, Hat in Hand

http://www.politico.com/news/stories/1009/27903.html
The rise of gladiator TV

http://www.nypost.com/p/news/business/just_getting_started_4V4uMERLvdJryGrwJc7KGP
Just getting started
Takeovers & takeouts will alter media landscape

http://www.telegraph.co.uk/technology/news/6255272/Sir-Martin-Sorrell-Rupert-Murdochs-pay-wall-plan-is-right.html
Sir Martin Sorrell: Rupert Murdoch’s pay wall plan is right

http://www.nypost.com/p/news/business/all_outta_zuck_b6AEXxUOOa2xsRMEeeMzaO
All outta Zuck?
Comcast takeover could put NBC head at risk

http://www.ft.com/cms/s/0/0ca3b1f8-b15a-11de-b06b-00144feabdc0.html
NBC goes in search of universal brand

http://www.adweek.com/aw/content_display/news/digital/e3i505f5fdeedc76b4275cd6041e29e5fcd
Hulu Makes Inroads
An upfront deal with MediaVest gives the popular video site a piece of broadcast’s dollars

http://thetandd.com/articles/2009/10/04/opinion/doc4ac64ef1e9e87192161472.txt
Newspapers have the need to fight back

http://newsosaur.blogspot.com/
How to sell news on the web: A checklist

[GOPJ]

DVDs, produced by the same fine folks who believe Roman Polanski committed a victimless crime.

Why would anyone want the "Polanski" mentality in their home - and pay for the privilege?

Most of us would rather watch a cat flushing a toilet on You-Tube... than the average Hollywood garbage.

[Syntyr]

“Hopefully a long long time. downloads SUCK. They compress the hell out of them, and even at a 10 megabit connection you’re less than 1/4 of what Blu-ray can produce.”

Streaming media from Hulu and Netflix can’t hold a candle to the resolution I get on my 240hz LED HDTV from even my regular DVD’s! Not to mention I can’t find 3/4’s of the content I have in my DVD and Blu-Ray collection.

[Think free or die]

We don’t do much to support the industry either. We seldom buy DVD’s. For the most part, we borrow them from our local library. The selection is terrific, searching and reservation is online, and we’ve already paid for it through our taxes. If they don’t have something I want, they’ll usually purchase it upon request.

[Tolsti2]

Netflix instant watch is horrendous. The quality is usually VHS or worse and the selection is a complete joke. I’d never pay anything for just it alone, but sometimes it’s ok if they have some horror movies I might want to watch on lark.. Or a documentary I might never otherwise look for.

Their Blu-ray selection has gotten really great however, and I use it exclusively for that. I buy some, rent most. Hard to beat that.

It’s funny, but Blu-ray’s uncompressed audio typically has more bandwidth alone than hulu/netflix video+audio.

[Eric in the Ozarks]

It’s astounding to me how out of touch today’s Hollywood is from the rest of the country. They depend on us to buy their products. They haven’t figured out why we’re not.

[mdmathis6]

They sell junky dvd’s/Blue Rays that never get sold....Look at what they dont carry or don’t seem to keep long in stock...when ever they get any of the Star trek dvd;s/blue rays...they sell out...even the “bad” movies.Family fare such as Ben Hur, Spartacus...all gone..sold quick. The Disney stuff sells quick, helped along by Disney’s limited “vault” production runs that they cycle thru every 5 years or so (though the “spin off’ stuff sticks around longer).

Of course for 5 or 6 bucks there are usually about a zillion copies of Charlie’s Angels(the movie) or Porky’s Revenge just spilling out onto the aisles...!

[Sans-Culotte]

I have hundreds of DVDs and around 60 Blu-rays. This weekend, the wife and I watched The Wizard of Oz on Blu-ray and it looked and sounded great. I do not know why so many here are cheering for the demise of movies on discs.

There are all sorts of reason sales are down. Some people have stopped buying DVDs altogether and are buying Blu-rays. Also, studios have slowed down their releases of "catalog" titles (older films), and all that is coming out now is new crap. Also, the Obama depression is not helping.

[GeronL]

Red Box!

[PrincessB]

Since the Wal-Mart close to me has a red box, this wouldn’t be too much of a stretch. The other thing I’d like to see are kiosks where you can download movies/shows to ipods and iphones. I downloaded two movies to my ipod for a long plane trip recently. Good strategy for me. The only problem was that my ipod is registered to my home computer, which didn’t come on the trip. I would have loved to have downloaded another movie before returning home, but didn’t have a computer handy to do that.

[Sans-Culotte]

They sell junky dvd’s/Blue Rays that never get sold....Look at what they dont carry or don’t seem to keep long in stock...when ever they get any of the Star trek dvd;s/blue rays...they sell out...even the “bad” movies.Family fare such as Ben Hur, Spartacus...all gone..sold quick. The Disney stuff sells quick, helped along by Disney’s limited “vault” production runs that they cycle thru every 5 years or so (though the “spin off’ stuff sticks around longer).

Thanks for reminding me. I forgot to mention that another reason Wal-mart may as well get out of DVDs is that they suck at it. The sales "help" is clueless and the selection is horrible. I get almost all my media online, usually from Amazon Prime, or Deep Discount during their sales, or Fry's on sale.

[GeronL]

Hulu!

[GOPJ]

They haven’t figured out why we’re not.

I think they know - and hate conservatives so much they'd rather go under than allow us to be entertained.

[GeronL]

I bought a 4GB flashdrive and there was a movie on it, took up about a gig