What’s Wal-Mart Up To?

Wal-Mart announced today that it is the first traditional retailer to sign a major deal with the “Big Six” Hollywood studios to distribute digital downloads of their movies online. You may recall that we posted about Netflix’s offering of free movie downloads last week, so what we have now is a very broad spectrum with the free Netflix movies on one end, and Wal-Mart’s movies on the other.

The comparison is by no means equal. We are talking an extreme case of apples and oranges here. Netflix movies are free, yes, but their library is pathetic. I couldn’t find anything good, and trust me, I have pretty eclectic taste. Wal-Mart on the other hand offers the latest new releases, big Hollywood blockbusters, and basically any movie you want to watch. I think that Wal-Mart is up to something more than just offering digital movie downloads.

Whether you love Wal-Mart, or despise them, you have to acknowledge that they have dramatically changed the retail industry, and maybe even the economy forever. They did this by putting everything you could possibly need under one roof, and making all of that stuff cheaper in their stores than anywhere else.

Every item in a Wal-Mart store is meant to lure you in, so while you’re there you’ll buy a month’s worth of groceries or four new tires for your SUV. I have a feeling they are applying this same logic to WalMart.com by using the fact that they have this cool new service to get people shopping on WalMart.com and possibly in one of their 4,000 retail locations. They tried a couple of years ago by offering DVD rentals by mail, but lost to Netflix. Now they are competing with Amazon, CinemaNow and Apple.

Netflix was one thing. Amazon and Apple alone are massive players in the industry, but just like MTV, I think Wal-Mart must have some of the smartest people in the world working for them. This time around, it seems that Wal-Mart has thrust its clout and enormous bulk onto decision makers in Hollywood, and just may win (or at the very least compete) in this battle.

I wish it had been Target to announce this today. Target is my version of Wal-Mart.