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Hollywood in Arkansas

September 15th, 2006

I love the contrast between the media created fantasy of business and the cold, hard reality of what’s actually going on…

You would think to be a major player in Hollywood, you’d need to drive a fancy car, have a big house in Malibu and appear at chic parties with a starlet on each arm.

If you thought that, you’d be wrong.

In reality, the biggest player in Hollywood is in a little city Arkansas near the Oklahoma border.

Betonville to be exact.

I’m talking of course about Wal-Mart.

These days revenue from DVD sales is essential to Hollywood. No DVD sales. No Hollywood. It’t that simple.

How important is Wal-Mart in the Hollywood DVD business? Estimates are that anywhere from 35% to 40% of all DVD sales in America take place in a Wal-Mart which makes Wal-Mart THE single most important business in (or out of) Hollywood.

All those movie stars, studio execs and celebrity reporters with their pumped up egos are just so much noise.  Any one of them can be replaced. Heck. Even the loss of an entire movie studio would barely be a blip on the screen compared to even the slightest rumbing from Wal-Mart.

And Wal-Mart is starting to rumble.

Wal-Mart didn’t like it when iTunes and Disney partnered up to sell first releases for $12.99, BELOW Wal-Mart’s store price of $14.99. They especially didn’t like it when Disney/Apple sold a movie to the public BEFORE it was on Wal-Mart’s shelves.

The result. Wal-Mart slashed its orders of Disney DVD product. That got their attention.

More rumblings…Wal-Mart is gearing up to sell Hollywood movies direct to the public online.  Are Hollywood studios going to say "no" to the deal? Of course not. Wal-Mart will have a distribution deal with every Hollywood studio and iTunes won’t. This is one battle Steve Jobs is not going to win.

Whether or not this will translate into Wal-Mart becoming a major online force in the movie business is another story and remains to be seen, but one way ot another, the biggest power in American retailing will be soon be investing gazillions of dollars in making Internet video as mainstream as hot dogs and apple pie.

And that’s good news for video savvy Internet marketers.

Ken McCarthy

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Copyright: Ken McCarthy, 2006

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