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Report: Apple and Wal-Mart in discussions over iTunes Store alliance
Friday, September 29, 2006 - 10:55 AM EST

"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," Michael Learmonth reports for Variety.

Learmonth reports, "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."

Learmonth reports, "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."

"Studio sources say the rest of the majors are very close to joining Disney in a deal with Apple but are holding off until the end of the key fourth quarter, when half of all DVD sales occur," Learmonth reports.

Full article here.

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Related articles:
Wal-Mart: we’re not fighting iTunes Store movie downloads - September 23, 2006
Wal-Mart threatens retaliation against Hollywood studios if they sell movies via Apple’s iTunes - September 22, 2006
Wal-Mart loses ‘philosophical argument’ with Apple CEO Steve Jobs, gains top-selling iPod - November 29, 2005

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Sep 29, 06 - 10:01 am Comment from: RC

Say it isn't so!

Apple should not succumb to the demands of the evil empire that is know as Wal-Mart.

Choose you partners wisely Apple. Wal-mart is fundamentally and morally corrupt.

Sep 29, 06 - 10:01 am Comment from: Greg

"What's in it for Apple?" A LOT. If wal-mart had big posters telling people to go download movies from iTunes, it would go a long distance in solidifying iTunes Movie business.

Sep 29, 06 - 10:02 am Comment from: db

Now, watch how the MDN readers' opinions change! Now they love Wal-Mart, I am sure!

Seriously though, capitalism is one of the greatest inventions in the history of man.

Sep 29, 06 - 10:02 am Comment from: andy

f@*k wallmart, the studios will fall in fine, theyre just greedy, so when they see how well disney is doing off it, the logical step is to follow

Sep 29, 06 - 10:04 am Comment from: db

RC,
Giving lower income american families products and goods for amazingly low prices, often times saving them thousands of dollars over the course of a year is NOT corrupt! You hippies, of all people, should understand the value of helping the poor.

Sep 29, 06 - 10:07 am Comment from: SJR

Get over yourself. Apple is a business and they are in business to make money. They aren't in the morality business.

Sep 29, 06 - 10:09 am Comment from: RC

db,

Wal-mart IS NOT HELPING THE POOR or anyone but themselves.. "Low-cost has a VERY high price.

Sep 29, 06 - 10:10 am Comment from: the other Mark

This would be HUGE!! Talk about legitimizing iTS and making it the major player. iTS is big now, a deal with Wal-Mart would make it dominate.

Sep 29, 06 - 10:13 am Comment from: Moonchild Happypants Sunbutter 8 Dovekiss

---
RC,
Giving lower income american families products and goods for amazingly low prices, often times saving them thousands of dollars over the course of a year is NOT corrupt! You hippies, of all people, should understand the value of helping the poor.
---

That's the most frelling naïve and stupid thing I've read all day.

Your vision is as through a pinhole.

Sep 29, 06 - 10:14 am Comment from: Scarboro

This sounds like a mob job... the big fat mob boss says he wants his cut from you just because he's the big boss... Wal-Mart is dirty.

Sep 29, 06 - 10:15 am Comment from: morkubine

Sorry ... as a small business owner working my prverbial a$$ off, I choose not to go to Wal-Mart. I would rather give my hard earned cash to someone who deserves it. Even Target is better.

Sep 29, 06 - 10:17 am Comment from: db

The high cost you are talking about is probably mostly directed at 'low wages'. However, if you had a basic understanding of free market system or supply/demand you would realise this for the farse that it is. Bottom line? Employees are welcome to search for a better job, with more pay, elsewhere!

Regardless, having several thousand people working for less than ideal pay is hardly comparable to MILLIONS of people saving THOUSANDS of dollars per year on basic goods.

Sep 29, 06 - 10:18 am Comment from: Midlothian

Wal-Mart is a publicly held company, RC; consequently, their first duty is to their shareholders to maximum profit at any and every (legal) opportunity.

Obviously you were educated in the state-run public education system, whose first duty is to expand the teachers' union and disparage big business at every opportunity. (I KNOW this to be true, for I taught in the Colorado public school system for 25 years.)

Do you own your own business, RC? Or are you an employee of some capitalist enterprise? If the latter, get on board, dumbass, and invest in the future . . . not the mom-and-pop past.

Or . . . if you really want to fight Wal-Mart, join a consortium of small business owners and COMPETE! Offer better, more personalized service or something Wal-Mart doesn't! They're not omnipotent, just better managed than the "It's A Wonderful Life" you fantasize about.

Until you socialists take over the USA as you have most of the rest of the world, you're stuck with American business know-how. Save your pennies, RC, and invest in it!

Sep 29, 06 - 10:20 am Comment from: macromancer

Making deals with the devil.

Sep 29, 06 - 10:23 am Comment from: db

midlothian,

Well said. Hippies, take note! It is all about what the consumer wants.

Sep 29, 06 - 10:24 am Comment from: iMaki

Alliances can be good. It's all about marketing. Problem is we here have tunnel vision at times. We're all about style and integrity. Unfortunately, style and integrity doesn't always pay the bills. Better Apple than Microsoft ally with the largest retailer in the nation. I'm for it.

Sep 29, 06 - 10:26 am Comment from: macromancer

"You hippies, of all people, should understand the value of helping the poor."

I think it's funny how so many so-called republicans* have been brainwashed by the Neo-cons into thinking that ANYONE who sees a corporation as being morally bankrupt as being a 'hippie'.

Helping the poor?!?! LOL thats a good one. People are poor because they have jobs that don't even pay them a living wage, that they can't support their families. Just the kind of jobs Walmart provides. Low paying minimum wage jobs.

Try living on $12,000 a year.

-signed
non-hippie


* = if you aren't a millionaire you aren't really a republican, you just want to be and wish you were.

Sep 29, 06 - 10:26 am Comment from: fu-q Walmart

db,

Walmart needs to be stopped they are destroying good companies. I purchased a vacume cleaner from them and a plastic part broke inside. I went to get it fixed (because walmart would not help) and the dealerthat fixed it sells the same vacume but for $50 more. Well needless to say the delears vacume has metal parts and walmart has plastic. It cost me $50 to get it fixed. Walmart makes people think they are getting a deal when actually they are getting a pile of junk. The problem is when people finally figure this out all the mom and pop stores will be closed.

Sep 29, 06 - 10:27 am Comment from: EVIL

Walmart: The Evil Empire...

Let me start out by saying that I am not completely anti-capitalism. I think if a business is run well, with a product that people want to pay for, that business should prosper and grow.

I also believe that employers should act responsibly toward their employees. Share holders and CEO's may have their place, but a few should not be allowed to become wealthy on the backs of the many people struggling just to survive.

I think what WP said about walmart representing the worst of what America is is true. We (as a large "powerful" nation) have the capability to do so much good, yet we have 37 milllion citizens who live below the poverty line (that's as of 2004 so it is probably even higher today). Again, as of 2004 46 million Americans were without health insurance. We as a nation seem to be closing our eyes to the people right here on our own soil who are not making it, and it is only going to get worse if we continue living the way we do.

Do I blame walmart for all of these problems? No, but I do believe that Walmart and other big box stores (yes, I do think other big box stores are also bad, but walmart is the biggest, and therefore the "baddest") share a large part of the problem. Getting rid of all the big box stores would not solve everything, but it would be a good start.

What's Wrong With WalMart?

In 2004, there was a report released by the Committee on Education and the Workforce (of the US House of Representatives). The report said that low wages at walmart end up being subsidized by federal taxpayers because the walmart wage is not a living wage (and I would say that this applies to any store which does not pay a living wage).

"A typical Walmart Store with 200 employees cost federal taxpayers $420750 per year...in the following ways:
$36000 a year to pay for free and reduced lunches for walmart families
$42000 a year in housing assistance
$125000 a year in federal tax credits and deductions for low income families
$100000 a year for additional child tax credits
$108000 a year for federal health care costs of moving into state children's health insurance programs
$9750 a year for additional costs of low-income energy assistance

Now, I completely support government programs to help those who are needy, but I don't support big businesses getting wealthy while employees are being supported by the government. You might say that the employees should get more education and find better jobs so that they didn't have to work at walmart. I would tell you that that is a very egocentric view of the world. You or I, or anyone reading this post might be in a position where getting a good education and looking for a decent paycheck is standard. That's just what we do, because that's what our parents did. That's the kind of life we were taught to work for. Not everyone is so fortunate, so to apply our natures onto everyone is not realistic. Not everyone lives the kind of life where higher education is considered. You live the way you are taught to live, and very few people have the wherewithal to overcome their lifestyle-imposed limits.

Walmart sells cheap stuff. The cheap stuff has to come from somewhere. According to a frontline PBS documentary, As the single largest customer to most of its suppliers, Wal-Mart openly uses its bargaining power to negotiate lower prices from suppliers. Specifically, in its negotiations with suppliers, Wal-Mart requires that prices go down from year to year. If a vendor does not comply with Wal-Mart's request for reduced prices, they risk having their entire brand removed from Wal-Mart's shelves in favor of a lower-priced competitor or a less expensive store brand. This can put pressure on suppliers to shift jobs to factories in third world countries or reduce the quality of the product. Here's an interesting article on walmart's effect on US manufacturers.

We love to buy cheap stuff. The cheaper the better. We shop around to get the cheapest price on our food, our clothes, and everything else we buy. I myself am guilty. I love a good deal. It scares me a little though, that for a "good deal" we are destroying our economy. I will not shop at walmart. I try to limit shopping at any major big box (except costco, because they are responsible employers).

Sep 29, 06 - 10:28 am Comment from: CitizenX

Uhhhhmmmm. This kind of arrangement is illegal? The motivation behind it and the actual deal.

How many iPods does Wal-Mart sell. I know there is not much of a choice here in San Diego and they are not merchandised all that well.

Sep 29, 06 - 10:30 am Comment from: Goliath

Yeah, Wal-mart helps the poor.. And so does Dell because they sell $399 pc's... Don't fool yourself.

Sep 29, 06 - 10:31 am Comment from: marko

I could care less about Walmart, they are a backwards run hillbilly company.
I dont go there, what bugs me about WalMart is all the Flag Waving Employee functions you hear about.
Another bothersome aspect of WalMart is the company's stance on NO EXPLICIT LYRICS on CD's, yet they will sell you a gun?
There is something wrong with that thinking. A CD never killed anyone

Sep 29, 06 - 10:33 am Comment from: Usually Right

What's wrong with you freaks?
Are we gonna go through all this moralistic high & mighty bullshit again?

DON'T BE STUPID!
Best thing that could happen for itunes/Apple.

Let me straighten some of you dipshits out.
EVERY product you buy comes from a company that has SOME questionable practices.

Unless you are a monk in the hills, you cannot be immune from this.
You can make certain choices (as I do), but I am also MODERATE IN MY THINKING.

Sep 29, 06 - 10:34 am Comment from: Jim - the independent voter

Macromancer,

"I think it's funny how so many so-called republicans*"

how do you know he's a republican... he could be a libertarian....

Sep 29, 06 - 10:36 am Comment from: toonie

Wal-Mart is evil!

Sep 29, 06 - 10:37 am Comment from: Jim - the independent voter

Marko... "There is something wrong with that thinking. A CD never killed anyone"

you obviously haven't listend to Paris Hilton's new CD yet!

Ba-dump-bum

Sep 29, 06 - 10:38 am Comment from: RC

"if you really want to fight Wal-Mart, join a consortium of small business owners and COMPETE"

-------------

Midlothian, Because of Wal-mart it is becoming next to impossible to compete. They are abusing power, becoming a monopoly. Eliminating choice and freedom to choose with strong-arm tactics. And I'm not just talking mom and pop shops, Wal-mart is bringing down big corporations like Toys-r-us and Hoover to name a few.

Just look at what they are doing to the digital movie distribution. Their motto is "join us or get crushed," and it's working.

If your vision for the future is "One nation under Wal-mart, then I pity you.

Sep 29, 06 - 10:42 am Comment from: ipodG8TR

I hate WalMart, but if this happens it will be good for Apple. And who says it needs to be forever? Apple should USE WalMart to further strengthen their iTunes name and brand awareness, especially in the new movie download business. Then Apple can drop WalMart and there's no going back.

Remember, Apple did the same thing with HP. Under the ipod by HP brand, Apple was able to sell ipods in places they didn't have access to before!

Sep 29, 06 - 10:43 am Comment from: Thank you, macromancer

Not everyone is brainwashed.

How dare anyone speak ill of the Holy Corporate Diety! Money is is the only value that matters!

(So why is it the Christians often support the Right? The Right's values are so blatantly un-Christian.)

Sep 29, 06 - 10:44 am Comment from: standardmess

EVIL, thanks for the well-reasoned argument.

Sep 29, 06 - 10:44 am Comment from: Infomercials

Midlothian,

Very well put.

I can't think of a worst business owner than the one that had the first mover advantage in a small town (what most people refer to as "mom and pop") and ended up wasting it.

Somehow everyone thinks that Walton must have started Wal-Mart with 1000 stores right from day one.

I actually loath Wal-Mart and never shop there...but that doesn't keep me away from Target which is yet another behemoth. And while I would prefer to buy from the local "mom and pop" and most of the time I do, in particular, when it comes to restaurants (hate those chains) there is no way I'm going to begrudge the big chains for kicking ass and making as much money as the legal system will allow them.

You want to beat them offer them something better. You hate that Wal-Mart doesn't give health insurance? How about you start your own business with the best health-care insurance in the nation...maybe employees will stop working at Wal-Mart and start working in your business instead. What better revenge than that? I can see the headline:

Wal-Mart To Shutdown Thousands of Stores
- WM has to shut down its stores 'cause "RCs Shop-Mart" is offering the best health care ever and nobody wants to work for Wal-Mart anymore.

You don't like it, don't shop there...but c'mon don't be so snobbish as to say that you would do differently if you were in charge.

Sep 29, 06 - 10:45 am Comment from: Gregg Thurman

Let me start out by saying that I am not completely anti-capitalism.

Yes you are. Your diatribe came straight from the Communist Manifesto. Marx and Engels are alive and well in the Democrat Party.

Sep 29, 06 - 10:49 am Comment from: RC

Dude, I'm not just talking about mom and pop shops. Wal-mart is strong arming nearly EVERYONE, Target included. Even major corporations are losing their ability to compete with Wal-mart.

Think about it ...."One nation under Wal-Mart." Is this really what you want?? Because it's becoming a reality.

Sep 29, 06 - 10:55 am Comment from: Tim

WalMart - a local bulk distributor of iTune media to your Mac/iPod. Think about it!

Sep 29, 06 - 10:56 am Comment from: Infomercials

RC,

YOUR nation under Wal-Mart.

MY nation is free to do whatever it wants.

Like shop at poor, old strong-armed Target...which happened to make 'only' 17 billion in gross profits...while still donating a percentage of every purchase to schools.

Sep 29, 06 - 10:58 am Comment from: Allen

Thank you RC ,

Wal-mart is killing free enterprise as we know it, it's a fact.

Capitalism is good, monopoly is not.

Sep 29, 06 - 10:59 am Comment from: Midlothian

RC, pity YOURSELF, for you are one of the great unwashed, self-flaggelating masses who blame ALL of their problems on the "ubermensch" society of neo-cons. No need to pity me, sir, for a dozen years ago I decided that being a public school teacher AND BITCHING ABOUT IT just didn't serve me or my family that well.

So, I got off my ass, took some RISKS with my finances, and no longer don't have to sling mud at anyone more successful than I.

And, RC, if Wal-Mart is so indomitable that no one can compete with them any more, why are you writing on an Apple forum touting the business acumen of a company that cannot POSSIBLY compete against MegaSoft?

Should Apple surrender its efforts and fortunes along with good ol' Mom and Pop? Has it no chance of succeeding either?

Oh woe is me! Oh woe is us! For MegaSoft owneth the cosmos!

Stay in your fantasy world, RC, and pity yourself and yours, for your prospects are gloomy, indeed. Perhaps a move to Canada is in your future?!

Sep 29, 06 - 11:07 am Comment from: Randian

Gawd, but I do love reading comments and analyses about "the poor."

Let's do some math, OK?

Subtract from the eternal ranks of "the poor" those who dropped out of school in the 10th grade. Subtract from that those who became pregnant six months later and now have four children by four different fathers. (Maury Povich rules!) Take from that those who regularly abuse drugs, in liquid and powder form. Now subtract those who have a criminal record and have done time in local, state, or federal facilities. And finally, subtract from that those who just don't give a sh*t about pursuing a life of delayed gratification and self-improvement.

Uh, that leaves only a handful of people (relatively speaking) upon whom the universe has inexplicably heaped a dunghill of bad luck. For THEM I weep. NOT those irresponsible laggards mentioned above WHO DO EXIST, my "progressive" friends!

Sep 29, 06 - 11:09 am Comment from: FUseeK

You know if Apple were the one in charge most of the Wal-mart haters would be singing Apple's praises. If Apple strong-armed Wal-mart or anyone else then it would be ok. Nobody has a problem with the tactics of a company as long as they like the company. Do you really think if the roles were reversed and the "mom and pop" stores suddenly had power they wouldn't crush Wal-mart and all their own competitors--you're damn right they would. That's what competition is--defeating the other guy. It's just sour grapes to the hypocrits.
I want competition, because I don't want JUST Wal-mart. But I won't fault Wal-mart for fighting like hell to stay alive. I would and so would everyone else even "mom and pop".

Sep 29, 06 - 11:09 am Comment from: ndelc

"Now, watch how the MDN readers' opinions change! Now they love Wal-Mart, I am sure!"

Nope, I still hate Wal-Mart. Not because I think they're evil, although I think the Walton family are incredibly greedy. To be some of the wealthiest people in the world with tens of billions each, and have a company that pays so little is disgusting. They could each fork over a couple billion to improve salaries and benefits and never even miss it.

However, despite my feelings toward Wal-Mart, I recognize that this could be a good thing for Apple, and Apple is a business. I don't see it as being any different from Apple selling iTMS gift cards at Target. Target makes money off those. I do believe that it's probably unnecessary though, as the movie studios will see that they chose the wrong horse with Amazon, and will bet on Apple soon enough on their own anyway.

Sep 29, 06 - 11:13 am Comment from: RC

Okay Midlothian.

Simple question. Where do you see Wal-mart heading and what do you see it's effect on free enterprise is. I'm just curious.

Sep 29, 06 - 11:13 am Comment from: Mikentosh

Milothian

Seriously, how did you change you life? That sounds great and right on.

great post!

Sep 29, 06 - 11:15 am Comment from: Allen

This biggest misconception is that Wal-Mart is only hurting mom and pop shops.

Did you know that Wal-marts quarterly revenue is more than Target, Sears, JCPenny and K-mart's YEARLY REVENUE COMBINED?

Sep 29, 06 - 11:17 am Comment from: costco fan

costco is a huge big box and they give employee benefits and pay well.

and still reap huge profits and have a great stock.

its not without precedent that a high performing publically traded company can maximize shareholder earnings and treat its customers with respect.

Sep 29, 06 - 11:21 am Comment from: Dion

FACT: The communists mass murdered over 100 million people in the 75 years they were in power. That’s 3652 people per day, 365 days per year for 75 years. More people per day than 911, for 75 years! From Harvard U. press: The Black Book of Communism. Read it. Written by 6 PhDs with a 100 pages of Documentation.

Wal-mart haters are using the same arguments as those communists used to gain power and murder.

Sep 29, 06 - 11:25 am Comment from: Kate

Walmart: the most successful anti-poverty program ever invented. I don't shop there, but I don't begrudge the millions who do. Funny to hear lefties crying over smaller profits for Walmart's big corporate competitors--poor, poor, Target, J.C. Penny's, etc.
The critics are either snobs, ignorant, or union tools.
Have a great day!
smile

Sep 29, 06 - 11:34 am Comment from: Costco is irrelevant

Their customers are MUCH higher-income than Walmart and they use a completely different business model. They are fine at what they do, but they're also a lot smaller than Walmart--i.e., their model produces far fewer jobs than Walmart. All of these false attacks on Walmart were debunked not too long ago by a former Clinton economist; his paper is on the web.
BTW, Dion, you're way over the top, even though I probably agree w/your politics.
Kate

Sep 29, 06 - 11:37 am Comment from: Dion

Kate, You have it right. Think of this: In America, for less than hour’s labor at minimum wage, a human can buy enough food to live for a day. In fact, the poorest people in America, living in trailers and shopping at Wal-Mart have a higher standard of living than the King of England did 300 years ago. This is the miracle of Capitalism and America. Those who hate America want to take you back to the stone age where you will spend all-day looking for food, you will battle insects and the weather 24-7, you will hate every minute of your life and live to be 35 and die with no teeth.

Sep 29, 06 - 11:39 am Comment from: gb

Unholy alliances such as this could end up hurting Apple has Wal-Mart has the ability to strongarm any company to do its bidding. Combine their philosophy of depressed wages and minimal benefits for employees and you might wonder why we aren't giving this as much press as we did when FoxConn was caught running Chinese sweatshops to make iPods.

There is a Wal-Mart about a mile down from house and damned if I ever step into there. I would rather pay slightly more at Target and subsidize them because at least I know that they take care of their employees.

If you don't understand the correlation between Wal-Mart's practices and the overall health of its surrounding communities then you don't have any sympathy for the people who live there because you ultimately want to save them $.50 today but shaft them thousands of dollars over the long term in other expenses as a result. JibJab.com has a very simple explanation in the form of a humorous, if not dark, cartoon: a href="http://www.jibjab.com/originals/originals/jibjab/movieid/122">Big Box Mart</a>

Sep 29, 06 - 11:41 am Comment from: gb

Oops messed up the link:
Big Box Mart cartoon, a humorous but sobering look at what Wal-Mart effectively does to a community.

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