Vudu Box Drops to $150, Leaving Us ConfusedS

Vudu just announced that its video-on-demand movie boxes would start selling for $150, down from $300, citing the "rewards of success" and not "imminent failure," like we first assumed when we saw this.

We love Vudu—we have yet to see a video-on-demand interface as user friendly, and an internet-based service so smooth. (Hint: Peer-to-peer sharing and local hard drives are both big helps.) But in the past half year, the company has gone through two rounds of layoffs, and the remaining warm bodies are focused on a third-party software for existing devices (like, hopefully, Xbox 360 and other consoles!!). This is probably what they should have been building in the first place. So when we hear there's a sale, we don't think "success"—we think "going out of business."

At this point, Vudu says it's still all good, though. Not only is the basic high-def Vudu HD box going to be selling at Best Buy and other retailers for $150, but its pricier custom-installer XL box is dropping to $500 (if you can find one). The wi-fi bridge connectivity kit is now going for $80. This is all allegedly because the company is benefiting from successful holiday season, increased movie revenues and a lower cost of parts and manufacturing. No matter what the real reasons are, it's not a bad deal, especially considering that the Vudu delivery service will probably be around long after the actual hardware is.

Press Release:

VUDU CUTS RETAIL PRICE IN HALF TO $149

New Price Puts World's Largest HD Library and Highest Quality On-Demand Picture in Reach of Wide Consumer Market

Santa Clara, CA, FEBRUARY 10, 2009 – VUDU, Inc., a leading provider of digital technologies and services that deliver entertainment over the Internet to consumers' HDTVs and Home Theaters, today said it has lowered the price of its on-demand Internet movie player to just $149. Available at Best Buy, audio video retailers, and online, VUDU HD is the only solution on the market to deliver weekly new releases from all the major studios, the largest HD library, the highest quality HD picture quality with HDX, local movie storage and the ability to access popular Internet content directly on the TV.

"We are reaping the rewards of success in the retail channel over the holidays, lower component prices and higher movie revenues. The combination of these factors has enabled us to lower the price of VUDU and bring it within reach of more consumers," said Edward Lichty, VUDU's EVP of Strategy. "This is exciting news for the Internet to TV content delivery market. In just a year, we've been able to drive down the price of the product by 50 % while increasing image and sound quality, growing our content library to more than 13,000 movies and TV shows, building the world's largest HD library of more than 1,300 titles, and providing access to free Internet content."

In addition to the VUDU HD, the company said it is reducing the price of VUDU XL, VUDU's home theater product sold through professional custom installers, to $499. The new VUDU XL bundle, which can store five hundred purchased movies, will also include at no extra cost a home theater connectivity software package that previously retailed for over $100. VUDU's no-hassle wireless kit, available at Best Buy, other retailers, and at www.vudu.com, has also been reduced to $79.

In the past year the company has achieved a number of milestones and introduced several groundbreaking features and service enhancements. The company secured a nationwide distribution agreement with Best Buy, announced the largest HD library in the world and introduced the pioneering HDX format, which offers the highest quality picture of any on-demand service.

The company also recently launched the VUDU RIA platform, an open platform that can bring Internet content, from video, music and photos to games to social networking applications, directly to the TV, all easily accessible using your VUDU remote control with no need for a PC.

About VUDU:
VUDU is a leading provider of digital technologies and services that deliver Internet entertainment to consumers' HDTVs and Home Theaters. VUDU's 1080p Internet Movie Players, the VUDU HD, VUDU XL and VUDU XL2 are designed to deliver tens of thousands of on-demand movies and TV shows directly to HDTVs. All versions support native instant start HD as well as movies in highest quality HD format available, HDX, and automatically upscale standard resolution movies. All movies are displayed in 1080p resolution at 24 frames per second, the cinematic gold standard.

Through relationships with every major US movie studio and more than 40 independent studios and distributors, VUDU offers a vast array of on-demand choices at the highest quality. The VUDU collection is constantly updated, and newly released movies from major studios are available on the same day as the DVD is released. Consumers can finally watch great movies without the hassles associated with traditional services:-no driving, no mailing, and no monthly fee. For more information, visit http://www.vudu.com/.