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c5140b5bcc0b22b2505c053745039ac2.15426.jpegWhen the largest corporation in the world shifts its merchandising strategy away from your product, you’re bound to take notice. This is the dilemma facing Hollywood movie studios, according to the Wall Street Journal. Mega-retailer Wal-Mart, whose balance sheet exceeds the size of many countries, is in the process of revamping its stores through what it calls “Project Impact”. Designed to reduce clutter and more prominently feature big-selling items,  the new strategy is part of Wal-Mart’s attempt to attract more upscale shoppers.

One major casualty of the new strategy is the corrugated display case used in many Wal-Marts to feature new releases and hot-selling movie titles. The move is widely believed to telegraph the retailer’s lagging faith in the DVD format’s continued profitability, and likely signals a reduction of shelf space for the format.

“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.

While I believe there’s still a future for the Blu-ray format, there’s no denying the DVD retail industry is in a protracted, and most likely permanent decline. The bottom line is: one out of every three DVDs sold in this country leaves the store in a Wal-Mart bag. This new strategy has HUGE implications for movie studios already battling to keep their format afloat.

As has been discussed previously on this site, all is not neccessarily lost for Hollywood. Mr. Darwin’s dictum of “adapt or die” definitely has application here. If the studios find innovative ways to compensate for this dwindling part of their revenue stream, they can assure their future viability. What’s your take on all this, Insiders? Let us know in the comments.

[via The Wall Street Journal]

61 Responses to “Wal-Mart DVD Shift Ominous for Movie Studios”

  1. Visitor [Join Now]
    TexasRebel [visitor]
    I work with VBG. To find out why this is important, click here.

    I see Wally Ditching Redbox and creating there own box down the line. Not sure if there is a contract or not, but if there isn’t it only makes sense for them to make there own and stock the machines themselves.

    I hate Wally’s parking lots, but if they were to keep giving them away on a regular basis they’ll see me!!!

    • Member [Join Now]
      Mark [rb123456789]

      It makes little sense for Walmart to build their own kiosks, in my opinion. Compared to their core business kiosks have a much lower volume and return on investment. Walmart already tried breaking into the DVD rental business once and failed. Walmart could probably have done it before Redbox became dominant, but now there is little chance they could compete on a scale which would turn a sufficient profit.

      • Visitor [Join Now]
        TexasRebel [visitor]

        I think It kills Wally knowing that some of it’s competitors offer the exact same service with the Redboxes now. It pains them knowing that there are diminishing compensations with every new outlet that Redbox signs up.

        What if Wally jumps ship and joins that crappy company with the same Colors?

        All and all this might be a good thing for those of us who want to see the freebies continuing though.

        • Visitor [Join Now]
          Caroline [visitor]

          See, if Wally was to start their own redbox company, I wouldn’t be using them. I doubt it would be a smart move. Redbox is great because you pick up a movie at the grocery, then drop it off at Walmart. One of the grocery I shop at uses a different rental box machine and I have yet to use it since it means I have to be back there the next day to drop off the movie instead of where ever I find a box. I’m more likely to end up spending money at Wally because I have a movie to drop somewhere.

          • Visitor [Join Now]
            TexasRebel [visitor]
            I work with VBG. To find out why this is important, click here.

            Wally isn’t thrilled that you are shopping elsewhere, they want it all.

            However, continue the freebies and continue seeing a ton more traffic in their store.

        • Member [Join Now]
          eddielane71488

          Redbox is so prominent that it’s highly unlikley that walmart would ever ditch it. Think about the ease of access. Redbox is actually bringing people in the door, even if just to return a movie. I think there are even more redboxes than there are walmarts, so in order for wamlart to compete they would have to “rent retail space” from competitors.

          • Visitor [Join Now]
            Jason Harris [visitor]

            Wally’s wouldn’t need to “compete” with Redbox. In fact, Redbox could be 100 times bigger than any kiosk program Wally’s created, as long as Wally’s kiosks were equally as successful in driving traffic into their stores. However, if their own kiosk program didn’t drive more traffic than existing Redboxes, I doubt they would care about the additional revenue derived from keeping all the proceeds of each rental.

    • Visitor [Join Now]
      Grammar Teacher [visitor]

      “There” is spelled “Their”.

  2. Visitor [Join Now]
    Joey [visitor]
    I work for VBG. To find out why this is important, click here.

    Does anybody here think that part of the shrinkage might have to do with the fact that they have a machine at the front of the store (Red box) spitting out movies?????????

    • Visitor [Join Now]
      TexasRebel [visitor]
      I work with VBG. To find out why this is important, click here.

      um, dir, yeah, but we don’t care!!!

      • Visitor [Join Now]
        Alex [visitor]

        you SHOULD care. If the studios can’t make their money back and then some, we won’t be getting any more expensive movies to rent.
        Think about it. Like any other company, the studios have to be able to make a profit in order to sustain.

    • Visitor [Join Now]
      TulsaMJ [visitor]

      No, because when people come to the store to buy a DVD, they don’t come in the door and then it occurs to them: OH MY GOODNESS! I could simply RENT it instead and therefore I would not have to PURCHASE it! …If they came to buy a DVD, they’ll buy. If they want to rent it, they’ll go directly to the Redbox (or Blockbuster, or their Netflix, or whatever) and do that.

      Now, a handy Redbox might be the thing that gets someone to bother to WATCH a movie they weren’t really planning on bothering with. I submit that the low cost-of-entry of $1 Redbox rentals is more likely to convince someone to take a chance on some crappy movie they wouldn’t watch if they had to pay $25 in the electronics department.

      • Visitor [Join Now]
        TexasRebel [visitor]
        I work with VBG. To find out why this is important, click here.

        Give Joey a little props here. Maybe today people come directly to either rent or Buy, but remember the first time you got the free codes. Things clicked in your head and you knew you would never have pay again.

        The moment RB showed up I was able to get something for free vs. buying at Wally on Tuesday or renting at a mom and pop store for $2.49/day or $2.99/2days things changed for me. Crapbuster had always been too high so they never have a factor for me. I like quality on my TV so piracy and streaming never were options either.

        However, the answer is still Dir, duh, putting Redbox up front has hurt sales. Do us Redboxers really care? NO!!!

        • Visitor [Join Now]
          mamabearo [visitor]

          Believe it or not, people actually DO BUY MOVIES. Movies that we love and consider “collection worthy” we will buy, who cares if it’s for rent in the redbox? Why rent a movie you love when you can add it to your home collection and watch it again and again? And here’s another BIG thing, for those of us who are true movie lovers and enjoy all the extra stuff you can get on DVD’s now (behind the scenes, making of’s, interviews and special effects secrets) the only way to have access to those great extras is to BUY the dvd, you won’t get any of the best extra stuff on redbox rentals (it’s bare bones there)… just sayin’. So rentals may be here to stay, but there will ALWAYS be a market for the purchase of dvd’s, and those who ignore that are just plain clueless.

  3. Visitor [Join Now]
    FoxWins [visitor]

    Oh no, where is Redbox going to buy its DVDs? Perhaps Walmart isn’t seeing its loss-leader DVD pricing driving traffic because the clowns at Redbox have been buying all the copies, causing Walmart to incur a loss while generating no cross-sell traffic.

    It just gets worse for Redbox. Fox and Warner windows begin tomorrow. Have fun. And hope all the cheapos enjoy it while it lasts.

    @Joey – If you really want to screw with Redbox, I suggest putting a note on Redbox machines that lists every available free code. Probably 90% of Redbox renters actually pay money while the other 10% use codes. If you can shift the mix to fewer paying, more free, then Redbox will be even more screwed. And hey – You’re just enabling low cost DVDs, right? Redbox likes “low cost dvds”, so it shouldn’t mind making free codes available at the point of purchase, to people who were unaware of the codes and who would have otherwise paid.

  4. Member [Join Now]
    mogebier

    DVD sales are probably down because people are sick of paying $15-$25 for the crappy movies that hollywood has been spitting out for the last few years.
    I know I rent way more than I buy. I hardly ever purchase a DVD any more. Not a lot of things I feel are worthy of my money.

    • Visitor [Join Now]
      Rebecca [visitor]

      I agree. My husband and I feel the same way. We used to buy DVDs all the time. At least a few a month. I think I have bought one dvd in the past two years because nothing is good enough to purchase. Plus now if we want to see something, we can just get it through Netflix or Redbox.

  5. Visitor [Join Now]
    Debra [visitor]

    Wal-mart is not allowing other companies to become successful. Wal-mart wants to monopolize everything. They should just move the machines forcing customers to walk into the store; it is the whole “milk in the back” theory. I like redbox, my family and I go to Wal-mart just to get movies from redbox and occasionally get snacks while we are there. Share the wealth Wal-mart!!!!!!

  6. Visitor [Join Now]
    rb [visitor]

    This is my innovative way for the studios to compensate for their dwindling dvd sales and how Redbox could also get into the action/profit. Okay…the studios still own their own movie titles. All the studios give Redbox permission to “somehow” create a special kiosk copier/burner/printer that can copy,burn, and put in a case (with the colorful movie ad cover) a studio movie that the person chooses/punches into the kiosk. The special kiosk does it all in maybe 15 minutes–so the person would probably have to order online with their credit card ahead of time for pick up at the kiosk. Now the cost of copying and burning your own dvd can’t be that much soooooooo if the studios agree that a fair and reasonable cost would be to charge the customer say $5 for a made-to-order copy–I say people would be willing to build their dvd collection at this reasonable cost. Then say, Redbox gets 50% and the studio of the copied movie title/dvd gets 50% of the profits. Seems like piracy would go down, and perhaps even people who now rent might be more willing to skip renting and spend the $5 for a physical copy of the studio movie. Each studio couldn’t have separate copying/burning kiosks all over the place to sell only their studio’s movie because people wouldn’t be willing to drive all over town

    • Visitor [Join Now]
      rb [visitor]

      Continued….(having problems with a new laptop here–it’s very sensitive!) Anyway, people wouldn’t be willing to drive all over town to various kiosks for each separate movie/dvd they want copied, so it would have to be under the management of one company–like Redbox. This is just my thought–of course it has a lot of kinks to work out.

  7. Visitor [Join Now]
    JoeWally [visitor]

    Reading too much into this…. walmart will still sell DVDs for a long time to come. What they won’t do is display them in the “corrugated display case”‘es that studio’s ship em. They are tacky… simply that, nothing more.

  8. Visitor [Join Now]
    chloe [visitor]

    the best solution is to rent movies from redbox and then burn copies at home yourself. simple and cheap………in this ecomony that’s the way to do it/

    • Visitor [Join Now]
      Richard [visitor]

      What’s the use of bragging about ripping/burning DVDs? I hope that the RIAA/MPAA/etc. find your ass and prosecute you for piracy. If you can’t afford to buy it, rent it and return it. Or go down to your local library and check out the media titles the library offers.

      BTW, |–> is actual size of your epeen.

      • Visitor [Join Now]
        gomakemeasandwich [visitor]

        At what point is this person “bragging?” Yeah, you’re just an asshole, that’s what I thought, shut up you tool.

    • Visitor [Join Now]
      TexasRebel [visitor]
      I work with VBG. To find out why this is important, click here.

      or if you really like it use a $5 or $10 gift card, rent them and keep them, no need to go back!!!

      • Visitor [Join Now]
        rb [visitor]

        I thought gift cards don’t work at the Redbox kiosk–to rent, NOT to keep the dvd as you are suggesting. Which gift cards work at the Redbox kiosk to RENT dvds?

        • Visitor [Join Now]
          TexasRebel [visitor]
          I work with VBG. To find out why this is important, click here.

          Prepaid Visa Cards!!!

          • Member [Join Now]
            moviecrazy

            First of all, Redbox won’t accept ANY card that doesn’t have at least $25 dollars on it in case you don’t bring it back, right? Or at least that’s what I thought. That way you can’t do what you said you’re doing. And secondly, isn’t your name on the card? If it is they could track you down that way, right?

          • Member [Join Now]
            craigpb

            I’ve used a debit card with as little as $4 to rent movies. Have used prepaid cards from Walgreen as well, but never kept the DVDs past a day so maybe you could get away with it. Most aren’t that desperate I assume.

          • Member [Join Now]
            Carson [carson]

            I’ve used a debit card with a zero balance and a free code.

          • Visitor [Join Now]
            David [visitor]

            I’ve been rejected trying to rent using prepaid gift cards, both Visa and Mastercard. It was quite a while ago so perhaps they’ve changed their policy.

        • Visitor [Join Now]
          TexasRebel [visitor]
          I work with VBG. To find out why this is important, click here.

          haven’t needed to do it much lately, usually watching a movie once is just fine so I use my regular cards!!!

  9. Visitor [Join Now]
    chloe [visitor]

    BTW, |–> is actual size of your epeen ((((what does that mean?)))))

    how is it piracy? i am not selling it or making a profit off of it. i’m keeping it for my personal use. i thought that was okay. that’s what my local BB store told me. maybe i need to research the rules myself.

    • Visitor [Join Now]
      Pirate [visitor]

      It is still piracy because you have not purchased the right to possess the movie, you rented from Redbox (who owns the rights to the copy you rented) and made a duplicate without paying for it. If you read the piracy warning at the begining of every movie you have burned copies of you will see that distribution and profit have nothing to do with it, you are just as guilty as the guy on the corner selling bootleg copies. I don’t want to sound harsh but taking legal advice from the monkeys at BB isn’t exactly the best way to approach things.

      • Visitor [Join Now]
        gomakemeasandwich [visitor]

        In theory, if you rent the DVD, don’t you technically “posses” it–in the sense of ownership–by paying Redbox for temporary ownership rights to the DVD? After all, you can decide to keep the DVD, right? I know that argument doesn’t exactly work when confronted by current copyright law, but I’m just throwing that out there for fun…

        And I have to agree, most of the people at Best Buy don’t even know about the products they sell, let alone copyright law.

    • Member [Join Now]
      slidecage

      best buy might of not understood you… we was told as long as you have the movie you can make a back up copy.. its not right but your allowed to .. its caught between what is right and wrong… your allowed to but they dont like to tell people it… if its illegal to make them then why do they sell the boxes that override the protection for 99 bucks (at least they used to)

      • Visitor [Join Now]
        Pirate [visitor]

        The reason devices/software are out there that allow you to do it is because you are technically allowed to make a backup copy of a DVD or software that you OWN, not rented. I do it with all the kids movies because they are old enough to put them in the DVD player and start them but not so good at taking care of them. I’ll just burn a copy and keep the original out of reach until the copy is unplayable and then just make another for them to abuse.

        • Member [Join Now]
          Carson [carson]

          also, a burnt DVD will last +/- 20 years if kept in a “cool, dry place” — The data is made of organic material, so it will eventually decompose… Now a commercially made DVd is stamped by a machine and should last forever…

    • Visitor [Join Now]
      gomakemeasandwich [visitor]

      “Epeen” is term used by retards that unfortunately have access to the internet.

  10. Visitor [Join Now]
    chloe [visitor]

    Wow! I learned something new today. Thanks you guys!

  11. Visitor [Join Now]
    Dogpissjones [visitor]

    After the money we all spent on VHS which is trash now . Then we went crazy to update to DVD at great cost in the start now those dvd’s are in the dollar bin. And now pay high prices again for the 3rd version of the same movie on BLU-RAY why not wait for prices to drop too and just rent a copy to watch at $1-4 price point unless its a kids movie I am kind over the I gotta have it now mentality . I rather watch it and now if it was excellent keep my eye on discounts or used blu-ray since we have seen the used dvd and old new dvds prices drop in quick amounts of time.

  12. Visitor [Join Now]
    Joey [visitor]
    I work for VBG. To find out why this is important, click here.

    Red Box fears wallmart because wallmart doesn’t have a minimum contract with red box on having the machines in the store. At any given time they can tell them to leave which would destroy redbox as that accounts for over 6,000 of the 18,000 machines.

  13. Visitor [Join Now]
    D [visitor]

    The Super Wal-Mart in my area has their own blue kiosk much like Redbox. I thought maybe it was a Redbox kiosk only with Wal-Mart colors… but nope, it’s Wal-Marts kiosk with all the same capabilities as Redbox.

  14. Visitor [Join Now]
    Teenie [visitor]

    I’m a person who uses Redbox to watch movies I would not have otherwise rented. I also use Redbox to watch movies to determine whether or not to buy the movie.

  15. Visitor [Join Now]
    mee812 [visitor]

    Heres an idea: Why don’t they do some creative thinking and print a discount coupon with the rental receipt for the same movie (or lower the DVD cost across the board). This way if you enjoyed the rental you are more likely to buy it enticed by the discount (could even by a Wally exclusive coupon). Often we rent and then buy as a way to control the amount of room our collection takes up. Owning 1700+ DVD’s some just have to stay out of the collection.

  16. Visitor [Join Now]
    MC [visitor]

    There are blue Redbox kiosks appearing in Walmart stores, showing one drawback of naming a brand after its initial appearance.
    http://www.gizmart.com/wp-content/plugins/wp-o-matic/cache/b20ff_bluebox.jpg

    Anyways, Shane failed to properly summarize the article; he didn’t even mention that the article mentioned Redbox. Go read the full article instead (free preview):
    http://online.wsj.com/article/SB125470337132563199.html?mod=rss_whats_news_us_business

    Corrugated display boxes for DVDs are going away because they were initially meant to lure in customers the night of a movie’s release. Per unit, they aren’t drawing as many early profits as they used to, so the company is changing its strategy. It’s not the end of the world, it just means that now movies aren’t going to receive that much floor space unless there is exceptional demand.

  17. Visitor [Join Now]
    angry jerry [visitor]

    make better movies and make more money!

    • Visitor [Join Now]
      John Small [visitor]

      You guys keep saying this but the movie box office is still doing well. People are still going to movies, they just aren’t buying them any more because of cheap Redbox rentals.

      • Visitor [Join Now]
        rb [visitor]

        If the movie box office is still doing well, why then aren’t all those movie goers, having seen the movie at the theater, running out to BUY the dvd of the movie they’ve just seen? They saw the movie at the theater so there’s no need for them to go and rent it from Redbox YET they are still not BUYING the dvd of the movie they’ve seen. Can’t blame it on Redbox since they’ve seen the movie at the theater (instead of first renting)AND THEN they’re still not buying the dvd of the movie. What do you blame it on that those non-renting movie goers aren’t then going on to buy the dvd of the studio movie they’ve seen at the theater? If the moviegoer deemed it to be a quality movie worth buying, why aren’t they then buying the dvd for their dvd collection?

      • Visitor [Join Now]
        gomakemeasandwich [visitor]

        The box office is doing well because a ticket costs $100 today–that’s it.

  18. Visitor [Join Now]
    Phil [visitor]

    I was in Wallyworld today and noticed a LOT of new space by the electronics dept where the DVD racks used to be in the middle of the large isle that passes in front of the dept. I was wondering what was up with that…

  19. Visitor [Join Now]
    Dev [visitor]

    Why does anyone have to try to cheat? If you want to buy or rent a movie from anyone, do it. It doesn’t matter who the company is. It’s your choice. You choose to spend money or not. If you think it is too expensive share with a friend. Try doing something else with your time.

  20. Member [Join Now]
    lorio

    Studios need to make better movies, that is what drives dvd SALES. Most of what is out there is not of interest to me to buy, rent, or see in a theater. Even with a free code, I frequently walk away empty handed. Why waste 2 hours of my life looking at junk? If everyone boycotted the mindless drivel that passes for entertainment, might take a while, but the studios would finally be forced to put out a quality product. We now accept whatever they put out, we deserve what we get. Start putting out quality films, when the demand reappears, you betcha WalMart will be stocking movies like mad.