Media, retailers partner to win digital customers

By Sue Zeidler

NEW YORK (Reuters) - Media conglomerates are looking for ways to protect partnerships with retailers even as new technologies in the digital age help companies market movies, music and video games more directly to consumers.

Richard Parsons, chief executive of Time Warner Inc. (TWX.N: Quote, Profile, Research, Stock Buzz), told the Reuters Media Summit in New York this week that the world's largest media company aimed to test a service to sell movies digitally at kiosks at Wal-Mart.

Dick Cook, chairman of Walt Disney Co.'s (DIS.N: Quote, Profile, Research, Stock Buzz) film studio, said the division was in "serious discussions" with retailers but declined to elaborate.

"You don't want to do something that disrespects or impairs their business opportunities," Parsons said of movie distribution partners like Wal-Mart Stores Inc. (WMT.N: Quote, Profile, Research, Stock Buzz), Target Corp. (TGT.N: Quote, Profile, Research, Stock Buzz) and others.

"We think we've found some models that do that," he said.

The emerging market for downloading movies from the Web has raised concerns that retailers, movie rental stores and theater chains could lose a lot of their revenues and perhaps eventually be cut out of the media distribution chain.

Some fear that video will go the way of the music industry, where the popularity of digital music players and download services like Apple Computer Inc.'s (AAPL.O: Quote, Profile, Research, Stock Buzz) iPod and iTunes has all but wiped out the record store.

The chief executive of the world's largest music company, Doug Morris of Vivendi's (VIV.PA: Quote, Profile, Research, Stock Buzz) Universal Music Group, told the summit that music stores were on the road extinction.  Continued...