Wal-Mart eyes iTunes downloads

FROM VARIETY: Retail giant, online service in partnership talks

By Michael Learmonth and Jill Goldsmith -- Video Business, 9/29/2006

SEPT. 29 | Apple and Wal-Mart are in discussions over an alliance that could allow the giant retailer to profit from iTunes video downloads, which have been a source of great tension between Hollywood and the retailer in recent months.

A deal could take the form of a digital download "coupon" that would allow consumers to buy movies, TV shows or music on iTunes with Apple paying the retail giant a percentage of the proceeds, one industry insider said.

What's in it for Apple? Since studios (except for Disney, of course) have so far turned a cold shoulder to iTunes because of Wal-Mart's demands, the computer giant would then gain access to titles from every major.

Wal-Mart is one of the nation's biggest sellers of iPods.

Apple does sell gift cards through some other retailers such as Best Buy, Target and Amazon.com, but not at Wal-Mart.

Talks are in early stages and may not result in any deal.

But they do appear to mark a thawing of relations between allies Disney and Apple, which struck a download deal in August, and Wal-Mart.

The giant retailer warned Hollywood over the summer that it expects to be a major player in the evolution of the digital marketplace and that studios mustn't undercut the price of DVDs in its stores with product sold on iTunes.

Wal-Mart didn't return calls, and Apple declined to comment.

Disney so far is the sole studio in a deal with Apple, allowing Steve Jobs' company to buy new movie releases for about $3 less than the wholesale price charged to Wal-Mart.

Others studios balked, fearing to alienate their biggest customer.