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article imageRetailers Mull Over Movie Download Service

By rob13     Apr 7, 2007 in Technology
After getting burned by the shift of purchasing music online instead of buying CDs at the store, companies like Best Buy and Blockbuster are moving faster in getting an in-store move download service to lure customers back into their stores.
Music and DVD sales are important to retailers because every week a new CD or DVD is released, a customer has a built in excuse to visit their favorite retail store. Electronic stores especially love movie and DVD sales because these sales are seen as more of an impulse buy than purchasing a TV or computer.
According to NPD Group, the sales of CDs have been quickly slipping since 2003. NPD Group reports that CD sales dropped by as much as 11.7 percent last year. NPD notes that while DVD sales did increase by 5 percent in 2006, this sales percentage actually dropped from the 9 percent sales increase in 2005.
Because there has been fewer customers coming in to purchase CDs; retailers have not been able to convert CD sales into other product purchases within their stores. Even if customers are downloading music from companies such as Blockbuster and Circuit City, these sales are at least keeping these companies in the music and movie business.
So far, Wal-Mart is leading the way in movie downloads. Wal-Mart issued a report saying they sold over 3,000 movie downloads in February. Wal-Mart is even thinking of partnering with another company to offer digital downloads by the end of this year. Even though Wal-Mart does not see a huge demand for digital downloads in the next 2 or 3 years; Wal-Mart still feels it is important to offer a digital download service so that they will not lose any competitive edge.
While Wal-Mart may not be the most tech-savvy company out there, at least they are trying. In addition, because of Wal-Mart entering the market, other tech savvy companies like NetFlix and Apple have, or all have, started rolling out a streaming video service for their customers. In addition, Amazon.com offers a download movie service for TiVo subscribers, and Microsoft offers a similar service for Xbox Live subscribers.
With customers looking for more flexibility and convenience when viewing movies at home, look for more bricks-and-mortar retailers to start offering some type of music and movie download service. Also, look for more online services to hop into the download music and movie service because of the rapid growth happening in the download service sector.
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