What can we learn from Wal-Mart?

As more than one person has already pointed out, the demise of Wal-Mart’s video download service comes as no real surprise. In many ways, it was stillborn to begin with. Why? Simple. Even when it was launched, it was obvious (to everyone but Wal-Mart, apparently) that the service was too restrictive. Only Windows format, and only on one computer, with no burning? It would have been a miracle if it had survived.

As Ian Rogers of Yahoo Music said in his recent call to arms for online music, “inconvenience doesn’t scale.” Wal-Mart is the size of a Latin American country in terms of revenues ($370-billion) and population (it has 2 million employees), not to mention market capitalization ($200-billion), but it still can’t make something as crippled as its movie service was popular by brute force.

Wal-Mart’s massive size might have helped it get deals with the studios for their content, but it apparently didn’t help the retailer pressure said studios into giving up the handcuffs they like to place on that content — either Wal-Mart wasn’t able to convince them, or it didn’t try hard enough. Let’s hope the failure of its service doesn’t convince others that it wasn’t worth it to even try; Wal-Mart’s effort was doomed from the start.

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