updated 11:55 am EDT, Mon October 9, 2006
Target warns studios
Discount retailer Target -- which accounts for about 15 percent of DVD sales -- has warned major movie studios that it may "reconsider" its investment in the DVD business if it doesn't receive "equitable pricing." In a letter to major studios last month, Target detailed its concern that new movie downloading services such as iTunes will receive lower prices from studios on electronic copies of movies, according to a report from the Wall Street Journal. Target CEO Gregg Steinhafel suggests in the letter that the retailer may cut back on marketing disks, promotional programs, shelf space, and signage. The letter follows a similar warning from retailer colossus Wal-Mart, which reportedly threatened to retaliate against studios if they partnered with Apple to offer digital movie downloads at lower prices than DVDs on shelves. Wal-Mart quickly disputed reports that it had threatened studios, however, and was later rumored to be in talks with Apple over possible digital content offerings.