DVD wars come to online retailers


First books, now movies, the price wars between the biggest retailers just keep getting hotter. Walmart, Target and Amazon are all slashing pre-order pricing on some hot new releases like "Harry Potter and the Half Blood Prince."

Walmart said Thursday it would reduce prices for soon to be released DVDs to $10 at Walmart.com. Target and Amazon quickly followed, threw in free shipping and forced Walmart to drop its prices down to $9.98. Keep in mind, the deals are for online pre-orders of movies not yet released.

All this price cuttings seems like a great deal for consumers, but is it really? Highly competitive pricing can't be sustained for long, or extended to the entire category. Retailers simply can't sell things at a financial loss indefinitely. They do it to increase traffic, turn up the marketing machine, get a lot of press and sell other, more profitable items.