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Walmart Purchases Vudu Movie Service

In a move likely to shake up the VOD market, retail giant Walmart announced on Monday that it was purchasing online movie service Vudu for an undisclosed sum. Other suitors for the firm included Best Buy, Amazon.com and Comcast.

The three-year-old streaming company has its service built into devices from every major electronics manufacturer except Sony and Panasonic. Analysts see the purchase as a major step into the digital market by Walmart, which has traditionally stocked fewer online-capable televisions and devices than its competitors. Foster Research analyst James McQuivey said the following about the purchase:

“At the very least this shows Wal-Mart understands that [its lack of online-capable inventory] has to change, because the DVD is eventually going away . . . They are making a bet on connected devices.”

Sources close to the deal say that Walmart will likely keep the Vudu name on the service, but will be making one major change immediately: Vudu’s broad category of pornographic titles will be shut down by the family-friendly company.

Riddhi Patel, an analyst with research firm iSuppli, feels that Walmart’s move is in line with a general trend towards web-ready home electronics devices. The analyst predicts that more than 60% of HDTVs will connect to the Internet by 2013. Said Patel:

“It’s getting increasingly cheap to put Internet connections into televisions, and there are definitely financial opportunities to doing it,”

Insiders, do you own a Vudu-capable device? If you do and have used the service, what has your experience been like? How do you think Walmart’s ownership will affect the movie service, as well as the VOD industry at large?

(via The New York Times)

13 Responses to “Walmart Purchases Vudu Movie Service”

  1. Visitor [Join Now]
    Firstlawofnature [visitor]

    Adult must make up a big portion of the gross profits.

  2. Visitor [Join Now]
    FooBar [visitor]

    Basic Vudu box will cost me 150 DVD rentals. HD Vudu Box will cost me 500 DVD rentals. No thanks. Have not included the costs of High Speed internet…

  3. Visitor [Join Now]
    Firstlawofnature [visitor]

    Neat stuff but PPV in some form or fashion has been around for what like 30 years. It’s an expensive yawner.

  4. Member [Join Now]
    MovieWatcherSupreme [moviewatchersupreme]

    Silly Wal-Mart, you are too late in the game, and you picked a terrible service to try to profit from.

  5. Visitor [Join Now]
    Mike [visitor]

    So this must be part of the reason why they have cut down the size of the DVD/Blu-ray sections at my local Walmart store… Trying to get everyone to get excited about their “new toy.” Sorry Walmart, I’m not impressed.

  6. Visitor [Join Now]
    rudy [visitor]

    Its not because they have a new toy. People dont buy movies anymore, people dont get stoked about new release tuesday. More people are doing Redbox, Netflix Blockbuster’s version of Netflix, Bootlegs. Heck, four days ago the family watched “the time traveler’s wife” on my sons XBOX, week and a half before it came out on dvd.

  7. Visitor [Join Now]
    Steven L. [visitor]

    Maybe Walmart will start to discount VOD movies to $1.00 and grab the whole market? I used the trial Vudu service and found it a good quality streaming service, but a poor value.
    Hey Walmart, rent vod for $1.00 and make up in quantity. Corporate greed has Walmart charging like they all want to retire tomorrow.
    Cant you charge as you will be in business forever?
    Come on, $1.00 VOD rentals!

  8. Member [Join Now]
    Alan Smithee [8traxrule]

    My new Vizio TV has Vudu built in, but since Wal-Mart now owns it I won’t be using it. For them to yank the adult section was unacceptable- there were already several measures in place to make sure that those who didn’t want to see it didn’t have to see it. They still have a few NC-17 rated movies on now but those will probably get booted too once someone finds out about them.

    I watched a couple movies on it before Wal-Mart took over, on most titles the picture is very good, but I could only get a 2-channel audio signal despite their advertising Dolby 5.1. My TV can also access Amazon’s VOD but the quality is not as good as Vudu or a standard DVD, and the prices are still a bit high. Vudu at least has a daily 99-cent special, though every time I checked that it was always a movie I already had on one format or another.

    You can ‘buy’ movies on these services too, but they still have the right to take any movie offline for any reason, like Wal-Mart did with the adult titles. They said that those who ‘bought’ them would be refunded, but I hope that convinces enough people to stick with discs. Once you have it, you can play it forever (assuming it doesn’t rot and you always have working equipment of course.)

    • Visitor [Join Now]
      Firstlawofnature [visitor]

      Nice post. I wonder what the strategic imperative is for wal-mart to chase what was a physical product onto the net? If there is no market for a physical product anymore just reallocate the space in the store. Is selling/renting internet delivered videos important for wal-mart’s future? I don’t see the logic.

  9. Visitor [Join Now]
    Woody [visitor]

    I have had the Vudu for awhile now. Personally I like it! No more late fees or having to run to the store to turn the movie in. The quality is very good, good enough to never have to rent the expensive “HDX” format. I am able to rent a movie when ever I want and watch it right then. The only disadvantage I’ve seen is that the big new releases come out only for purchase on the Vudu, when you can rent them anywhere else. They aren’t available for rent for 2 weeks to a month after they were available on red box or block buster for rent. I’m not sure this problem is limited to Vudu alone. It seems this is a VOD problem in general. Overall, I give the Vudu a “B+”