Wal-Mart Shrugged – DVD and Blu-ray Fell

Never underestimate the power of Wal-Mart! The retail juggernaut has the power to destroy a product line’s sales by deciding not to sell it - or simply pushing it to the bottom shelf. Wal-Mart recently trimmed down its DVD shelf to free up space for better selling items. Now tremors are being felt across the entertainment industry. But is Wal-Mart contributing to a consumer paradigm shift or simply responding to one? 

If you’ve looked for your favorite new movies at Wal-Mart lately, you’ve had to hunt a little harder than you used to. The world’s largest retailer has decided to remove display cases promoting new-release movie titles and trim down the total amount of shelf-space devoted to disc-based media. The move is part of a broader effort to tidy its aisles, reduce corrugated cardboard displays and overall spruce up its image in an effort to appeal to a higher-end shopper. 

Is Wal-Mart turning its back on its sweat-pants-and-crocs customer base that made it the world’s tawdry ambassador of the Sino-made second rate? 

They’re calling it “Project Impact” and the idea is to devote more shelf space to only the best-selling items and cut back on those that tend to sit and collect dust. So far, DVD and Blu-ray discs have turned into one of the project’s high-profile casualties. Despite denials from studio execs, it’s another wooden stake through the heart of a declining industry. 

"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 Digital Entertainment Group says retail sales of DVD fell 13.5% in the first half of 2009, reducing it to a mere $5.4 billion industry. But DVD rentals rose by 8.3% in the same period as it stands at a $3.4 billion dollar market. Many will see a future in digital downloads, and they may be right. 

According to the Wall Street Journal’s numbers, the digital downloads market is on-fire, climbing 21% to $968 million. Don’t forget Video On-Demand. Comcast says its cable-rentals have grown 11% from last year. 

This Disc Won’t Repeat

Don’t expect Blu-ray to save disc-media. Despite healthy growth in the Blu-ray market, evidence suggests it’ll never do what DVD has done since the late 90s. 

According to VideoBusiness.com, Blu-ray sales are experiencing healthy growth, for now. DVD and Blu-ray hardware sales are currently neck-and-neck, if you discount video game consoles. But, include PS3 (and its built-in, mid-end BD player) and Blu-ray player sales get a slight bump ahead of DVD. 

Forecasts indicate Blu-ray sales should continue to grow through 2013. But it’ll never catch up to DVD player’s household presence, this is because of competing options for your home-movie dollar. 

Digital Downloads, Crocs-and-Sweats for your Media 

As slick and convenient as digital downloads can be, any video-phile, Audioholic or private property-owning home theater lover must remain vigilant. 

Theoretically it’s possible for a digital download to be the same audio/video quality as disc based media. But even a premium service like Vudu HDX pales in comparison to a Blu-ray disc with a lossless audio codec. 

It’d be nice to do away with packaging and just download a purely digital copy of any media you could own. But therein lies the problem – buying a thing in the digital domain is no evidence of ownership. 

Up The River without an Orwell 

Amazon.com had its first run-in with our distinctly 21st Century private-property issues with its electronic book-reading device, Kindle. Users that bought-and-paid-for e-books on Amazon by George Orwell including 1984, had their copies deleted without warning. This set off a firestorm in the press that threatened a PR disaster for the fledgling gadget from Amazon. It became obvious to users that when you use Kindle - Big Brother is definitely watching you!

It turns out Big Brother will pull the plug on your property any time it decides you’re reading unlicensed material. 

Amazon couldn’t have picked a more ironic writer to delete. Orwell is the author of cautionary tales involving futuristic privacy issues, including 1984 and Animal Farm. 

The Kindle episode highlighted what digital audio-video aficionados have been dealing with for years - there is no ownership of digital media! Unless you have a physical disc collecting dust or a file that is completely DRM-free, you own nothing more than an agreement to playback the file on only certified, licensed devices. The freedom of digital suddenly feels like barbed wire.

Until all digital downloads learn the principle of private property and trashes DRM restrictions – I’ll stick to discs, even if I have to don the sweats-and-crocs to get them.