Welcome to the 43rd installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions and just a bit of everything else when it comes down to a very hot topic these days: Wal-Mart.

Last week, I looked at Wal-Mart Stores, Inc. (NYSE: WMT)'s 2007 in review and summed up all the retailing giant had going for it last year along with all the negatives against the company as well. Wal-Mart did a lot of things right in 2007, but still had to fend off daily attacks from its enemies and just about any other entity who took shots at the largest target in the world.

This week, I'll be looking at something that just happened this past week -- when Wal-Mart decided to end its year-old movie download service after middling to no success since its launch in 2006. Why didn't the retailer have any success in the move to offering entertainment content in digital, downloadable form? Read on.

A lack of innovation stymied Wal-Mart's movie download service from the start

When the world's largest retailer opened its movie download service a little over a year ago, the standard tech-watcher punditry applied: why would anyone pay for movie downloads with so many restrictions on how and where to vie the material. In essence, digital movie downloads from Wal-Mart's movie download store were protected much like digital entertainment content from almost any other distributor is.

Translated: you can download a movie with Wal-Mart supplied download software and watch it in the fashion Wal-Mart wishes you to on the one PC it was downloaded onto. Flexible? Not even close -- and this is why music and movie piracy will continue to be rampant.

The movie and music studios, for some reason, cannot understand that the technical ability of most customers to understand all the hoops digital content downloaders have to go through does not exist. Customers want to click a single button, download a file (or two) to their PCs, and then use that content on the PC of their choice or the portable media player of their choice. Period.

Now, although Apple, Inc. (NASDAQ: AAPL)'s iTunes works very much like this, the company's iPods will play standard, non-protected audio and video formats (not all, but some of the most popular). The amount of protected digital content at the iTunes store and the super-easy way Apple allows downloading makes the problems of having inflexible downloaded content a non-issue for most.

By the way, I seem many of the same problems with Amazon.com Inc. (NASDAQ: AMZN)'s Unbox video download service. Way too many protection complications and not enough flexibility to allow customers a way to enjoy the content they purchased (not 'rented') how, when and where they want it. Wal-Mart's not the only player with an annoyingly complex model of distributing digital entertainment content.

Is the shuttering of Wal-Mart's movie download service really its own fault?

Of course, none of these restrictions would exist if it were not for the demands of the content owners, namely movie and music studios. These entities are so afraid of the existing digital distribution model that all these complex safeguards must exist (or so goes their thinking). But, when Wal-Mart blamed the failure of its digital movie download store on the discontinuation of systems by partner Hewlett-Packard Company (NYSE: HPQ), one has to wonder if that was really the deal.

Surely Wal-Mart would have entered into some kind of longevity contract with its hardware and software vendors to ensure something as potentially significant as an online movie download service would have full functionality for more than a year after launch. If not, some folks surely did not perform due diligence on this deal before Wal-Mart launched it in late 2006.

Was Wal-Mart just being beat up by Apple's iTunes so badly that it saw no reason to continue offering digital movie downloads? How about Netflix's impending movie download service? It's hard to tell if Wal-Mart discontinued its movie download service based on a partner discontinuing its partnership, or if competitive threats were greater than Wal-Mart anticipated, or if the company was just not seeing the return on investment it has envisioned.

Either way, Wal-Mart's entry into the arena of digital content downloaded to PCs for restricted use on some of the very devices it sells in stores (and on its website) has been rocky from the start and will continue to be that way. It will join all the other online music and movie distributors who, based on marching orders from the RIAA and MPAA, won't make it easy for customers to use the content they pay for.

With such uncertainties, why would any outfit get into the business of movie downloads, you could ask. Good question. Apple was the early adopter with its iPod devices and its tightly integrated iTunes store and software that made the experience painless and simple in spite of protected content obstacles. Can other digital content distributors be as lucky? Doubtful, although Napster.com and Rhapsody.com certainly have a large following -- but only music comes into play at both locations.

Although Wal-Mart's attempt to branch out into digital content delivery and distribution outside of its retail operations was admirable, it's hard to see the retailer being successful long-term in the digital music business now that it has jettisoned its digital movie download service. I could be wrong -- but then again, I've never heard a single performance quote about how many songs Wal-Mart sells every month from its online store. Have you?

Join me right here next week for another edition of The Wal-Mart Weekly. Until then, have a yourself a great first 2008 weekend!