Retail Stars do Video Downloads

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Take note of two more marquee-name Internet-entertainment venues adding the potential to peel subscribers away from cable's video-on-demand services.

The new movie- and TV-download services — both labeled as trials — come from Wal-Mart Stores, the world's No. 1 retailer, and TiVo through a nonexclusive deal with Amazon.com, one of the world's largest e-commerce outlets.

Via “Amazon Unbox on TiVo,” the digital video recorder vendor for the first time will sell a la carte video content from the online retailer directly to its subscribers. Prices will be in the same ballpark as the regular Amazon Unbox service, with TV episodes priced at $1.99 and most movies between $9.99 and $14.99.

“This creates one TV-centric location where you can have all of your television recordings,” said TiVo vice president for programming Tara Maitra. The DVR vendor is “talking to a lot of content providers” and may consider monthly subscription models down the road, she added.

The service is being beta-tested among a small group of TiVo subscribers. It eventually will be available to TiVo's 1.5 million subscribers who have Series 2 or Series 3 broadband-capable boxes, 600,000 of which have actually been connected to the Internet, the companies said.

The deal adds premium content to TiVo's TiVoCast, rolled out last year, which provides free, ad-supported access to Web-based video from content providers including CBS, the National Basketball Association, The New York Times and Reuters.

Comcast is getting ready to deploy a version of TiVo's DVR in its systems. However, the first phase of Comcast's TiVo boxes won't have the broadband features enabled, according to Maitra.

The TiVo-Amazon.com partnership joins a lengthening roster of other Internet services for delivering movies and TV programming directly to television sets.

Microsoft, for example, sells video downloads through its Xbox 360 video-game console. And later this month, Apple expects to begin shipping Apple TV, a $300 box for accessing the computer maker's iTunes video-download service and other computer-based content from a TV set.

Meanwhile, Wal-Mart flung open the doors on the beta version of its video-download service with 3,000 movie and TV titles, through which it said it will sell movies the same day DVDs are released.

The service, developed and hosted by Hewlett-Packard's digital entertainment services business unit, will sell TV shows at $1.96 per episode and new and recent movie releases for $12.88 to $19.88 apiece. Catalog movie titles start at $7.50.

Wal-Mart said it secured Internet-distribution rights with cable programmers and broadcasters, including Fox, The CW and Viacom, which will offer shows from Comedy Central, MTV, VH1, Nickelodeon, Nick Jr. and The N. The retailer also has agreements with all six major Hollywood studios: 20th Century Fox, The Walt Disney Co., Lionsgate, Metro-Goldwyn-Mayer, Paramount Pictures, Sony Pictures Entertainment, Universal Studios Home Entertainment and Warner Bros.

The move comes two years after Wal-Mart pulled the plug on a DVD-by-mail rental business and transferred its customers to Netflix.

But the new service shows Wal-Mart has resolved an issue that was a growing concern for some traditional retailers — that movie-download services would get better terms from studios on electronic copies of movies than retailers get on DVDs.

Wal-Mart's videos are available in Microsoft's Windows Media format, and require either Windows XP or Windows Vista-powered PCs or a portable media player that supports the format.

On its Web site, Wal-Mart said that its video files are not compatible with Apple's iPod, Sony's PSP or Microsoft's Zune portable media players.

“Unfortunately, these hardware providers have chosen not to license their technology to other retailers to enable compatibility with their products,” Wal-Mart's site said.

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