Apple, Wal-Mart and Destructive Innovation.

Bruce Nussbaum

It's remarkable to see Apple struggle to offer movies via iTunes-- a new business model--and have Wal-Mart fight back to retain its sales of DVDs--an old business model. Movie-making studios, caught in between, are reluctant to offer up their movies to Apple for sale at lower prices than standard DVDs because they fear loss of revenue from Wal-Mart's gadzillion stores. So Hollyood is caught in between business models, trying to make the transition without angering its biggest customer, Wal-Mart. We all know how this will end but we don't really know who exactly will be left standing when it's over. The fuzzy front end innovator will probably beat out the supply-chain back end innovator. And I'm betting it will happen by the end of 07. What's your best guess?

To continue reading this article you must be a Bloomberg Professional Service Subscriber.