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

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

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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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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

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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.

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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.

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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.