There’s a new war being waged for DVD retail dollars, and the winners are consumers looking for a home entertainment bargain. In the last few days, three of the largest DVD retailers in the industry have gotten into one of the most heated online pricing battles in recent memory.
Last Thursday, Walmart’s website slashed the prices of ten of the most anticipated DVD releases of the year–including Star Trek, Angels & Demons and Harry Potter and the Half-Blood Prince–to $10. Within hours, Amazon and Target matched the prices on their own sites, which has since prompted Walmart to further lower its prices on the titles to $9.98.
Walmart.com spokesman Ravi Jariwala, whose company has vowed to become the low-cost leader in online retail, says Walmart is not ruling out further price drops:
“We remain committed to offering our customers the lowest prices online at Walmart.com, and will continue to adjust our pricing accordingly on these movie titles,”
According to the Los Angeles Times, the wholesale rate paid by the three retailers for the discounted DVDs remains unchanged at about $18. This means that while the retailers will take a major hit on each DVD sold, the studios will maintain the same profit margin on each disc. This is a welcome proposition for movie studios, as a DVD sale is much more profitable for them than a rental and this loss-leading price war is sure to boost the flagging DVD sell-through market.
In a year that has seen Redbox arouse the studios’ wrath with its rapid growth and alleged destabilization of the rental market, studio heads are no doubt applauding Walmart, Target and Amazon’s actions and hoping that DVD sales will swell their coffers once again this quarter.
Will such cut-rate pricing get you to purchase more DVDs, Insiders? Does a pricing battle of this magnitude so early in the holiday season make you wonder what else is in store? Leave your thoughts in the comments.
[via The Wall Street Journal and the L.A. Times]
If the studios and the anti-Redbox people on this site are consistent, then instead of praising Walmart they will be attacking them. New recent hit DVDs for $10 has to be seen as be a huge devaluation of the DVD product.
The movies suck so bad lately there aren’t any worth even $1.
dvds need to be much cheaper. the other day i bought the new phantasm II dvd for $20 and the only special feature is the trailer!
As a promo, this is fine. If the retailers want to lose money in the hopes of attracting customers, so be it.
If they want to do this long term then it is a destructive thing and I think you will see the studios stepping in.
The studios stepping in to stop WALMART? Get real John Small. Unfortunately for them they placed their preverbial balls in WalMarts vicegrip a LONG time ago and all big blue has to do is squeeze a little bit and they get whatever they want. Unless big blue starts losing market share that will never change.
They wont say boo to walmart….
I just read a story where at a conference they all agreed that the economy has led to the downturn in sales…not a friggin PEEP about redbox! HAHA
We know redbox hurts you as an independent video store owner but I think the big boys are going to run out of ammo sooner than later against our red pal here.
But they WON’T be attracting customers to the stores.
THIS PRICING IS FOR ON-LINE PRE-ORDERS, ONLY !!!!!!!!!!!!!!!!!
Once the street date arrives, the pricing will be higher.
I will buy blu-rays for $10, not DVDs
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I checked and am pretty sure this is a bare bones dvd i.e. only the movie, no extras. To me it is a fair price at $10 but it is not really a great deal either in my opinion when you can rent it for cheaper if all you want to do is see the movie. Also I don’t really think it is a price war when Walmart lists the dvds at $10 in the beginning and then goes to $9.98 to undercut amazon and target. Wow a whole 2 pennies saved yippie! I don’t know where I will spend all that cash.
First that is a lie, stores pay about $3-9 for a dvd, then they mark it up 200-300% that where you pay about $17-22 for it. The $9.98 dvds are just the movie, no added features, and probably just the theatrical version. Walmart makes it rep by selling cheap quality for cheap prices. Amazon is a online monster, they have to compare with the lowest prices to make the sales. As far as target goes to cut loses they started doing complete prices matches. So loyal customers can pay what the other store has it on sale for, without going to that store. After the first week the prices go way back up, but it is a good plan. Sell a bunch of cheep dvds the first week to offset the decline the second week.
I need to find your supplier that is selling movies for $3-$9 for a new release.
He doesn’t exist because amtj03 does not know what he is talking about.
That’s not much compared to the online price wars of 1998- there was one now-long-gone website that had a special on 3 DVDs for $1 plus shipping! The sad thing was I was so poor after buying my new home theater equipment that I couldn’t afford to charge the amount to my credit card at the time.
I’d be more excited about these deals if Blu-Ray didn’t exist.