With the accepted notion that movies, like music, are eventually going to be available all over the internet, companies are trying figure out how to not only be competitive but also get a leg up on their competition.
In a story from The Hollywood Reporter, they report that places like "Best Buy, Wal-Mart and Circuit City, and some retailers" are the main companies facing these questions.
For starters, "Wal-Mart has launched its own movie download service, Best Buy is said to be in talks to start one, and Blockbuster explored buying movie download company Movielink earlier this year."
DVDs were long seen as the cause of repeat business. However, according to the NPD Group "the number of DVDs sold grew 5% last year, but that was down from a 9% increase during the previous year." The NPD went on to say,"DVD sales would have slid faster if not for the growth of TV programs offered on DVD."
In addition to this, movie downloads may not bring people into stores "they at least keep retailers like Best Buy in the movie and music business."
Thus far, of the big chains, Wal-Mart "is the farthest along after selling 3,000 movie downloads in its first month."
The grim reality is that getting movies online just isn't very easy for the average consumer. For example "compressed movie files can be a hundred times larger than an individual song, and Wal-Mart says a full-length movie may take as long as an hour and a half to download even over a high-speed connection."
Apple Inc.'s new iTV is a start but "simple buck-a-song pricing at its iTunes online store hasn't caught on in the movie world, where purchase prices vary widely and many movies aren't available at all."
Then there's also the thought that the quality of these downloads "is terrible" stated Andrew Hargreaves, "who covers electronics retailers for Pacific Crest Securities."
"The advantages that a Wal-Mart or a Best Buy has in the traditional retail world really aren't there," offered Prudential analyst Mark Rowen. He went on to say that as far as retailers are concerned, "their core strength is typically not technology and digital distribution."
"I think it's a sign that they understand that the business is going to be moving there in the next five years, and they want to be a player in it," Rowen went on to say.
However, some companies like Best Buy feel that next generation DVDs like Blu-ray and HD, as well as Standard releases "will keep customers returning to stores."
They think flexibility is the key and in that regard they want to offer their customers as many options as they can.
"We want to do everything we can to facilitate the speed at which that becomes possible in the marketplace." Stated Best Buy Chief Executive and Vice Chairman Brad Anderson. While Best Buy is certainly "interested" in downloads he sums the whole situation up like this, "We have to find a way that we're doing something that wouldn't be done otherwise. I don't think it's close."