It was only a matter of time before the move by Disney to offer its DVDs for sale on Apple's (AAPL) iTunes store brought the heat from the big retailers. Even though there has been a denial by the retailers that they have pressured companies to not offer lower prices through Internet downloads, that obviously hasn't been the case.
Target (TGT) had reportedly threatened to pull promotion of Walt Disney (DIS) products within their stores, but backed down when Disney countered that they wouldn't ship the DVD "Pirates of the Caribbean: Dead Man's Chest," if they went through with the action.
The issue centers on the lower price offered on iTunes, which Disney says is justified because the quality on downloads isn't as good, and for the most part, don't include the extra features that DVDs offer.
Target President Gregg Steinhafel said in a letter sent to all Hollywood studios last month, "Target cannot be expected simply to accept that risk and continue to do business as usual, our space, signing, promotional programs and the hundreds of millions of consumers in our stores annually should not be undervalued."
While I've always respected the way Target has done business, they're just plain wrong here. While there's nothing wrong with trying to flex your muscles to see what you can get away with, to attempt to control prices through another medium doesn't make any sense.
To say that their prices need to be the standard of all prices, is to assume more power than they legally have to use. I think they miss the whole thing concerning DVDs. People love the extra takes and behind-the-scenes look that DVDs offer. At this time they don't compete with one another. It's just another case of fear of the future and not knowing what's really happening with the changes.
At this time there isn't any threat between the these means of acquiring movies; the two are completely different products.
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