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Wal-Mart confirms plans to acquire Vudu
The world’s largest retailer, Wal-Mart, on Monday confirmed its plan to buy streaming-video service Vudu for an undisclosed amount. The deal is expected to be finalized within the next few weeks. The terms of the deal are still unknown.
by Priyanka - February 23, 2010 - comments
With this deal Wal-Mart will be getting into the profitable business of selling movies via Internet directly to customers. Reportedly, Wal-Mart has bought Vudu for slightly more than $100 million.
"Combining Vudu's unique digital technology and service with Wal-Mart's retail expertise and scale will provide customers with unprecedented access to home entertainment options, as they migrate to a digital environment," said Wal-Mart Vice Chairman Eduardo Castro-Wright in a statement.
Vudu's technology has the ability to digitally transmit the high-definition movies over the Internet to television and Blu-ray disc players.
Wal-Mart’s expectation
In the recent years the market for movie streaming and downloads has expanded to a great deal. The companies such as Netflix, Microsoft, Sony and Amazon.com are all striving to capture the movie streaming market.
With the help of Vudu’s services, Wal-Mart is hoping to establish a direct relationship with customers in order to push its own products too, which include TVs or high-definition Blu-ray players with built-in Internet connections.
Acquiring Vudu will provide Wal-Mart the chance to catch up with its rival Best Buy, which started offering its streaming video service last year in collaboration with CinemaNow.
Vudu has a catalog of more than 16,000 video titles that can be downloaded directly to different brands of TVs or Blu-ray players. Customers have the option to buy on rent or simply purchase the video.
A little about Vudu
Vudu arrived in the market in 2006, but customers soon lost interest because a separate set-top box was needed to the services. It became hard for Vudu to find buyers who were willing to spend $400 on hardware.
As per Christopher Collins, a retail analyst at Yankee Group, "It's just really difficult to get consumers to add another device to their entertainment cabinet."
In 2008 Vudu changed its strategy and shifted emphasis away from hardware and began making deals to incorporate its software into net-connected devices to reach wider customers.
Around the same time, the company started to search for potential buyers for as it was running short on cash. Despite all these problems Vudu, it has been highly-appreciated for its user interface that allowed users to easily find and select movies.
According to Bruce Eisen, former president of digital video store CinemaNow and a digital media consultant, "Presumably with the power Wal-Mart has, it will be able to strongly suggest to consumer electronics manufacturers that the Vudu service be embedded in the devices that it sells."