Report: Walmart's Buying Vudu After All (UPDATED)

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The New York Times is saying that Walmart will acquire Vudu, the online movie service. The report's consistent with earlier rumors, and may just be a match made in heaven. UPDATE: Walmart's confirmed the acquisition; press release below.


Walmart sells more DVDs than just about anybody on the planet, but have so far been shut out of the increasingly popular movie streaming business that's buoyed Netflix recently. Vudu gives them a convenient way into that market without having to build from the ground up.

For Vudu, selling out couldn't come at a better time: they've never been profitable, although they've been gaining some traction by having their players embedded in increasing numbers of TVs. Being owned by the world's largest retailer will help them build on that momentum. It also gives consumer electronics makers even more incentive to preload their sets with Vudu, since Walmart will be more inclined to sell products that incorporate a property that it owns.

But what about for consumers? Actually, it could end up being a win there, too. Nobody's more effective at driving down prices than the big box retailer, and giving Vudu more visibility and market share should lead to some healthy price competition.

Time will tell, but the could be one business transaction that ends up making sense for just about everyone.

Walmart Announces Acquisition of Digital Entertainment Provider, VUDU

Company takes next step to enhance home entertainment and information delivery options for consumers

BENTONVILLE, Ark., Feb. 22, 2010 — Walmart announced today a definitive agreement to acquire VUDU, Inc., a leading provider of digital technologies and services that enable the delivery of entertainment content directly to broadband high-definition TVs and Blu-ray players. The deal is expected to close within the next few weeks.

VUDU is a revolutionary service, built into a growing number of broadband-ready TVs and Blu-ray players, that delivers instant access to thousands of movies and TV shows directly through the television. Customers with broadband Internet access and an Internet-ready TV or Blu-ray player can rent or purchase movies, typically in high-definition, without needing a connected computer or cable/satellite service. New movies and features will be added continually, enabling customers to enjoy a product that continues to become more robust long after they have left the store.

"The real winner here is the customer," said Eduardo Castro-Wright, vice chairman for Walmart. "Combining VUDU's unique digital technology and service with Walmart's retail expertise and scale will provide customers with unprecedented access to home entertainment options as they migrate to a digital environment."

VUDU has licensing agreements with almost every major movie studio and dozens of independent and international distributors to offer approximately 16,000 movies, including the largest 1080p library of video on-demand movies available anywhere. Via their broadband Internet connection, users have the ability to rent or buy titles and begin viewing them instantly.

VUDU will continue developing entertainment and information delivery solutions such as VUDU Apps, a platform that delivers hundreds of streaming Internet applications and services to TVs and Blu-ray players with built-in Internet connectivity. VUDU has partnered with some of the leading names in Internet and media entertainment to offer applications on its platform including Facebook, Flickr, Twitter, The New York Times and The Associated Press.

"We are excited about the opportunity to take our company's vision to the next level," said Edward Lichty, VUDU executive vice president. "VUDU's services and Apps platform will give Walmart a powerful new vehicle to offer customers the content they want in a way that expands the frontier of quality, value and convenience."

VUDU, based in Santa Clara, Calif., will become a wholly-owned subsidiary of Walmart. The company is not disclosing financial terms of the agreement as the acquisition is not material to its first quarter earnings for fiscal year 2011.


[NY Times]



Then again, maybe it will go the way of Wal-Mart MP3s.

Despite my dislike of the company, they've proved remarkable at lowering prices on physical goods. But digital media is a different beast. Their foray into server-side DRM killed their MP3 experiment (and pissed off a ton of customers in the process). Unless they've learned their lesson and opened up to more abstract methods, they're going to get screwed just the same.

I'm open to anything that can push streaming media farther. And so long as they keep their physical media section, I'll encourage it. But I'll still wait and see what their plan is exactly before I get excited.

Set-top boxes are, for me, more exciting than integration into televisions. If it were possible to integrate Vudu into Boxee, I'd like to see that. If Wal-Mart's plan is to sell Vudu boxes by themselves with no other features, it may just be a bust. Don't know, but we'll see.