Wal-Mart slashes DVD prices to $10, potentially spurring price war
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In an unprecedented discounting move that could signal a price war that would benefit the major movie studios and cash-strapped consumers, Wal-Mart has slashed the price of a number of the upcoming DVDs of big-budget summer movies to $10 on its website.
That appears to be the lowest price ever offered by a major retailer on highly anticipated new releases, according to people at studios’ home entertainment divisions. Among the films on sale for $10 are ‘Star Trek,’ ‘Night at the Museum: Battle of the Smithsonian,’ ‘Harry Potter and the Half-Blood Prince’ and ‘Terminator Salvation.’
The big discounts are only for the top 10 pre-ordered movies on the site. Recently released hits like ‘Transformers: Revenge of the Fallen’ and ‘Ice Age: Dawn of the Dinosaurs’ cost $13.98 and up. In addition to the price cutting, Wal-Mart.com is also offering free shipping on all of its DVDs.
A link on its website indicates that Target is moving to match Wal-Mart’s discounting. There isn’t yet any indication whether Amazon.com will follow as well.
The price cuts are good news for movie studios, because they will spur demand in a year during which DVD sales are down more than 13% thus far. The wholesale price paid by Wal-Mart and its competitors remains unchanged at about $18, meaning studios will make the same profit on each disc.
It’s normal for retailers like Wal-Mart to price DVDs below their wholesale cost at physical locations and online to draw customers who often spend more money on other items.
The deepest discounts usually go to about $14, however. $10 marks a big loss that Wal-Mart and Target will be taking on each movie, especially with free shipping.
The move comes as Wal-Mart.com and Amazon.com are in the midst of a book price war that has seen the price of some new-release hardcovers fall as low as $9. If Wal-Mart’s discounting spurs a similar price war over movies, it could provide a significant boost to holiday movie sales and the studios’ bottom lines.
-- Ben Fritz