According to AP , the shift of music online has hurt stores such as Best Buy, Wal-Mart and Circuit City and some retailers are looking to avoid a repeat with movies. Wal-Mart has launched it's own movie download service, Best Buy is said to be in talks to start it's own and Blockbuster explored acquiring Movielink this year. Music and DVDs are very important to retailers having driven customers to stores. Each week a new release was a reason to return and hopefully purchase. And for electronic retailers discs are often a cheap impulse sale, unlike a computer or tv.
The decline in CD sales has accelerated every year since 2003, dropping an alarming 11.7% last year. The number of DVDs sold grew 5% last year, but that was down from a 9% increase the previous year. According to NPD Group (research firm) selling prices for both music and movies have declined though DVD sales would have slid faster if not for the release of TV programs offered on DVD.
According to Pacific Crest Securities, big box retailers are loosing foot traffic as interest CDs wane and it's likely to affect the DVD market as well. Even if movie and music downloads don't drive shoppers into stores, they at least keep retailers such as Best Buy in the movie and music business.
Wal-Mart Stores is the farthest along selling 3,000 movie downloads in its first month, February. Blockbuster reported it intends to offer digital downloads in partnership with another company by year's end.
As for ease of use, online movies have a long way to go before they're as easy to use as downloadable music, Wal-Mart says a full-length movie may take as long as 1-1/2 hours to download, even over high-speed connection. And in many cases movies bought online can't be burned to a DVD. Add to all this the quality of download which hapopens to be terrible by and large.
