Wal-Mart Scrooges on Movie Downloads

By Andrew Wallenstein
Big-box behemoth Wal-Mart has pulled out of the movie download business it entered to considerable hoopla less than a year ago, having signed up all the major studios. As Gizmodo noted, the surprise exit occured just four days before Christmas, posted plain as day on Walmart.com....but no one noticed, which should give you an idea of just how popular the service was. A Wal-Mart spokesman pretty much confirmed that to Reuters, saying the service didn't perform "as expected."

So tempting to point to some kind of confluence of events between this exit and Apple's own entrance into the rental model (revealed just yesterday). Bottom line: is download-to-own a limited business? God knows Forrester Research has been banging that drum for quite some time. But given the fact that NBC Universal couldn't have exited iTunes fast enough and claimed to have made only $15 million, perhaps there's plenty of circumstantial evidence pointing to the fact that there probably isn't significant demand out there for long-form videos that one must pay double-digit dollars to store on a hard drive, especially while the free equivalent is swimming around P2P circles.

The questions now are: 1) Does Wal-Mart switch to a rental model like Apple? 2) Do others exit the download-to-own business?