Wal-Mart Announces Digital Downloads

On the heels of an announcement by Time Warner's CEO that his company is moving towards a download-to-burn sales model next year, super-tailer Wal-Mart has launched its own digital movie download service. The service is being activated today to help promote the DVD release of Superman Returns. Which – hey, coincidence – is a Warner Bros. movie.

From CNN Money:

With the purchase of the "Superman Returns" physical DVD, Wal-Mart said customers can also choose from three video download format options – $1.97 for portable devices, $2.97 for PCs/laptops, and $3.97 for both portable players and PC/laptops. The retailer said the physical/digital DVD bundle would offer customers the flexibility to watch the Warner Bros. movie on their TV, portable devices as well as their computers.

So, Wal-Mart is charging you an extra fee for the right to watch your purchased DVD on a device other than your DVD player. Ripping a DVD for playback on an iPod or a Zune is illegal, as it violates the DMCA. It's super easy if you use a piece of software like Handbrake, but it's technically illegal.

Help me out with something: Are computer DVD drives unable to play these new DVDs? Otherwise, what's stopping me from putting Superman Returns into my Mac Mini and watching it? What if my Mac Mini is my only DVD player? Do I have to pay an extra $3 just to watch Superman on my computer?

There's a reason that Wal-Mart chose this multi-license model over rental or some other shady tactic, and Engadget nails it: Wal-Mart is protecting its own DVD sales from cannibalization.