Wal-Mart Releasing Movie Downloads Versus TiVo Adding Commercials

TivologoWalmartlogo Both Wal-Mart and TiVo had some big news today in the area of trying to commercialize the latest advances in digital media. Wal-Mart released its movie download service with a twist: you have to buy the DVD. But for a few bucks extra, you get a download too. TiVo decided to sell advertising space at the end of recorded programs and track how many people watch them. So the question of the day is:

Which of these new services is more likely to succeed (or fail)?

Wal-Mart

Wal-Mart’s flagship offer is the “Superman Returns” physical DVD bundles with a coupon code that will let customers choose from three video download format options: $1.97 for portable devices, $2.97 for PCs/laptops, and $3.97 for both portable players and PC/laptops. First mistake: You have to go to the store or wait for the delivery of the DVD (if ordered online) before you can make the download. If anything, I’d rather get a coupon for the DVD to come in the mail after I download what I want right now.

Tip for Wal-Mart: Before jumping on the digital download bandwagon, give me a way to take advantage of it without going shopping or waiting for a shipment. My favorite part in the press release is how Wal-Mart explains “customers can also begin watching the movie while it downloads.” Wow, after already having the DVD and possibly having waited for it to arrive in the mail, you mean I don’t have to WAIT to start watching the download? Amazing.

Apparently Wal-Mart will be releasing (not yet)  a “beta version” of a video download service, which will feature both movies and TV shows. We’ll take a look when the time comes…

TiVo

The maker of digital video recorders today announced it would insert ads after a television show has played. This will supposedly offer a way for advertisers to reach audiences who record shows and are likely to skip through traditional commercials.

Does anyone else find irony in the idea that the company that empowered the consumer to skip commercials is, in fact, now trying to get the consumer to watch them? The service is being called “Program Placement” and allows advertisers to buy ads for specific shows like they do for regular television. So far several companies have signed up including Burger King, General Motors, and MasterCard.

TiVo said it will give advertisers in the new program access to data it gathers on how consumers react to the new ads so that they’ll be able to track how many viewers actually play the ads. My guess? Not many. Again, I’m confused by the concept of consumers that are known for skipping commercials watching them when they are at an even easier place to skip: the end.

So which company has it worse (or better) with today’s press releases?

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  • http://www.davisfreeberg.com davis freeberg

    I don’t really see what’s so bad with TiVo putting opt in ads at the end of their programs. I don’t think ads themselves are so terrrible, but rather that the current model is broken. Right now the networks just blast 30 seconds at everyone and you get a lot of noise. By allowing an opt in ad, some will choose to watch it, some won’t it’s up to the consumer. As long as the consumer stays in control how is this a bad thing?

    I think what TiVo’s program is more likely to do is encourage advertisers to make longform entertaining commercials. If Burger wants to make their own mini sitcom, I might actually tune into that if it’s funny. Sure there would be product placements in the sitcom, but at least it would be good. Do the product placements in The Office make the show any less appealing? It’s up to the advertisers to make their content as appealing as mainstream TV if they want this to work.

    On the other hand, blasting the same 30 seconds over and over may lead to an interesting commercial every now and then, but the truth is even funny commericals will get old.

    As far as Walmart’s crazy download scheme goes, well I don’t even know where to start with that. Let’s just call it weaksauce and we’ll watch it fail like all of their other digital initives.

  • Bob Caswell

    Davis,

    The issue with TiVo’s new initiative is that it’s not really a sustainable solution. Networks blasting 30 seconds at everyone, even if annoying, is what pays for TV to be what it is (some might argue that it’s not that good even with the hoards of money flowing).

    But if the old system is falling apart because more people are opting out of noise partly due to technology (TiVo, etc.), then what it preventing them from continuing their same behavior with these new ads? I’m really not convinced that these ads developed for TiVo are all of a sudden going to be better. Actually, I think they’re likely to be the exact same ads with different timing (shown at the end of the show).

    Though I hope what you say is true (i.e. that this will “encourage advertisers to make longform entertaining commercials.”), making such commercials is extremely expensive, probably more expensive than the commercials they already have. So why would an advertiser spend more money to make a different commercial to show to a smaller audience that is known for skipping commercials?

    I guess we’ll have to see what the initial data brings back, but I’m skeptical…

  • Tom

    I used to download music from Walmart and Itunes but their digital rights management schemes got to be to big of a hastle and I quit. Maybe the same thing with the videos.

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