BitTorrent, Wal-Mart To Open Online Video Stores

The downloadable movie space grew more competitive this week, as peer-to-peer service BitTorrent and retailer Wal-Mart announced new deals to sell movie downloads.

BitTorrent forged deals to sell movies from major Hollywood studios Paramount Pictures, Lionsgate and Twentieth Century Fox Film, as well as TV shows from MTV Networks, starting February--while retail giant Wal-Mart has begun testing digital downloads by offering customers who bought DVDs of "Superman Returns" a downloadable version for an extra few dollars more ($2 for download to portable device, $3 to PC).

The video stores from Wal-Mart and BitTorrent will compete with a host of other relatively new downloadable movie sites. Since August, companies including Apple Computer, AOL, and Amazon have started selling downloads of movies from a variety of studios. Microsoft, meanwhile, started selling film downloads, but only via its Xbox 360 console.

The wide array of alternatives has left consumers with numerous options for video downloads, but average Web users haven't started purchasing the downloads, says eMarketer senior analyst James Belcher. In fact, he says, the very multitude of choices is causing confusion.

"It's a hodgepodge right now," he said. "There's nothing where you go, 'Oh, this is easy. I don't have to think about this.'"

Currently, different sites offer varying titles, and at diverse prices--ranging from around $8 a movie to $20. In many cases, purchasing a download appears to be at least as expensive as purchasing a DVD would be--and not as convenient.

"Why should you have to pay as much or more for a digital download as something you get from Wal-Mart?" Belcher asks, adding that digital distribution saves studios the cost of packaging and transportation.

In addition, some services--like Apple's--don't allow users to transfer their movies to DVDs, which forces them to watch on their computer screens. Until that changes, he says, only the "really aggressive early adopters" will purchase online downloads.

"As it stands now," Belcher says, "it's just not appealing."