Wal-Mart (WMT) has made enough mistakes recently that most of its competition may not be overly concerned when the company launches a new service.
That could be a mistake. Hewlett-Packard (HPQ) is providing the technology for Wal-Mart to launch an on line video store and DVD-by-mail service. All six Hollywood studios have signed on: Universal (GE), Paramount (VIA), Disney (DIS), Warner (TWX), Sony (SNE) and 20th Century Fox (NWS).
The video download business is currently crowded with companies like Amazon (AMZN), Apple (AAPL), and private companies including Movielink.
NetFlix (NFLX) and Blockbuster (BBI) have begun to move into the download market as they see their business of physical DVD rentals eroded by internet download operations.
If Wal-Mart is successful with the new service, shareholders at NetFlix and Blockbuster better duck.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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