Walmart to purchase Vudu
Three years ago, Walmart partnered with Hewlett-Packard to provide movie and television program downloads. This venture was canned within 10 months’ time. Now that video streaming has become much more widely accepted, Walmart appears to be leveraging what market share Vudu has to get back in the game.
Vudu launched in 2006 and has since gained partnerships with most Hollywood studios, as well as many independent providers, but they have also blown through most of their venture capital and have been looking for a buyer. With big players such as Netflix, Sony, Google, Amazon, Microsoft, and Best Buy competing for the online video market, Vudu has been struggling to keep up. The Walmart acquisition makes for a good match, bringing the quality-leading service (Vudu) with the market-leading retailer.
At the CES expo earlier this year, Vudu announced many new hardware partners and a new app service. It will be interesting to see how Walmart will leverage Vudu within their consumer electronic products from various manufacturers. The retailer has exclusive products made for them from companies like Sony; it makes sense they will add the Vudu app to the exclusive products at a lower price point than the competition. Walmart has been focusing on electronics every aggressively for the past few years, so they do have the ability to make a huge play into the video streaming market.
It seems one of the factors holding Vudu back was the hardware costs considerably more than comparable products. Walmart has the ability to subsidize the hardware for market penetration.
Because online media is “in the cloud” we’re not asked to make a commitment with one provider over another. The hardware prices have come down so much, or is included within HDTVs or Blu-ray Disc players, that even a hardware investment is negligible.