Wal-Mart Shuts Down Movie Download Service

"What? Wal-Mart has a movie download service?" Yes, apparently they do. Or at least they did, anyway. Since launching it in February, the success of Wal-Mart's movie download service has been unknown. Now they are shutting it down "quietly". A notice was posted on the web site saying that it had been shut down as of December 21st.

They made the decision to shut the service down after HP chose to discontinue the technology that powered the service, said Walmart.com spokeswoman Amy Colella in an email. She also added that they will not be looking for another partner with which to re-build the service, either.

According to HP spokesman Hector Marinez, HP made the decision to discontinue the video download-only services because the market for paid downloads didn't perform "as expected." He noted that the video business remains uncertain and is changing rapidly.

The creation of the Wal-Mart movie download service was initially considered to be a game-changer, and was expected to introduce many DVD buyers to the world of downloadable media. They managed to create partnerships with many of Hollywood studios, and offered many same-day titles. However, the files downloaded were only playable in Windows Media Player, and were not compatible with iPods and iPhones.

Wal-Mart will continue to offer DVDs for sale at their many, many retail locations, as well as online. However, Colella says that they're through with the video downloads business.

She declined to disclose the numbers of videos sold via the Wal-Mart download store.

The announcement has interesting timing, coincidentally happening around the same time as the finalization of negotiations between Apple and Fox for a movie rental service via iTunes Online Store.

[via Reuters]