Thursday, February 25, 2010

Reading Into The Vudu That Wal-Mart Do

It’s a lot more fun to Wal-Mart watch than it is to Wal-Mart shop. When you shop there, you have to worry about supporting a venture that is dicey at best for the greater economic good. When you Wal-Mart watch, you get to hypothesize about its complete lack of fear when it comes to using its size to squeeze impossible deals out of suppliers.

My latest Wal-Mart watching has to do with that hammerlock leverage. Wal-Mart just announced it’s buying Vudu, a startup which supplies movie rentals and purchases over the internet. Vudu has deals with all the major studios, including a large library of high-definition movies.

[read the rest of my column at digiday:DAILY]

Wednesday, February 17, 2010

Redbox accepts delayed access to Warner DVDs

As I wrote in an earlier post, the movie studios have been battling Redbox and its $1 DVD rental machines. Lawsuits ensued.

Warner and Redbox have just announced the settlement of their legal battle. The agreement delays Redbox's access to Warner DVDs until 28 days after initial release, creating a "window" for higher-priced consumer DVD rentals. In exchange, Warner reduces the price Redbox pays for DVDs, and also guarantees the larger quantity of discs Redbox sought.

Thus, just as consumers can buy a hardcover book early or wait for a cheaper paperback, consumers now have the choice of renting from higher-priced outlets like Blockbuster on the day of release or waiting 28 days for a cheap rental. Of course, Warner hopes that some consumers will choose to purchase the DVD instead, which would give Warner a greater profit.

That 28-day window also gives Warner an opportunity to try to build up the market for video-on-demand, online streaming, and digital downloads -- all of which have the potential to provide larger profit margins than DVD rentals.

Although not mentioned in the press release, PaidContent and the New York Times (via AP) are reporting that Redbox has also agreed to destroy all Warner DVDs when demand drops for rentals from their kiosks. Until now, Redbox had been selling off used inventory at low prices, further diminishing demand for new DVDs.

Wednesday, February 10, 2010

Will Justice Be Done In the Google Books Case?

So which is it? Either (a) the geniuses at Google really don’t get it, or (b) they’re just playing dumb and hoping we don’t notice. Which do you think is more frightening?

The first version of the proposed Google book settlement received a scathing critique by the US Department of Justice, in which the DOJ told the Court to reject the settlement. So Google, the authors, and publishers crafted version 2, an amended settlement agreement ("ASA"). Last Thursday, the DOJ issued its critique of the ASA, asking the Court to push for additional changes, for many of the same reasons. [read the rest of my column, including some pithy quotes from the DOJ, at digiday:DAILY]