Wal-Mart digital movie store moves into beta

Bentonville (AR) - Complementing its digital music store that launched a couple years ago, Wal-Mart today unveiled a digital video store, offering TV shows and movies at prices that are marginally less than what iTunes charges.

Movie downloads from Wal-Mart start at $12.88, compared to $12.99 for new release titles at iTunes, which increase to $14.99 after the first week. Wal-Mart also lets studios set their own price, going as high as $19.88. Vintage titles begin at $7.50 for Wal-Mart’s store, compared to a fixed $9.99 for similar titles on iTunes.

The iTunes set price model has caused many studios to stay away, with Walt Disney and Paramount as the only two currently available from Apple’s digital store. Wal-Mart says all major studios have signed on to provide content to their online service.

Fox is among the list of channels that will be initially be available on Wal-Mart’s new digital platform, offering TV shows at a price of $1.96 each, a three cent discount over iTunes. Because of Wal-Mart’s dominance in media sales, it was easy for them to convince entertainment companies to get on board with the new service. The huge retail chain counts for about 40% of all DVD sales.

In addition to iTunes and Wal-Mart, another entrant in digital video downloads is Amazon, which debuted its Unbox service in 2006. Digital rental site Movielink, and the popular Netflix service both also announced plans to expand download-to-own options for movies last year.

In 2004, Wal-Mart first unveiled plans for its digital music store, which offers 88 cent music downloads. Although the songs are less expensive than the leading digital music stores, the Wal-Mart online platform has yet to actually see significant sales.