Set-top box movie service Vudu is claiming to offer more High Definition content than any of its competitors — Apple TV, Netflix, XBox 360, and even Blu-Ray itself — reports CNet. And while content is mostly King, I’m still unsure about the company’s business model.
Indeed, a quick examination of competing services seems to bear out Vudu’s claim. We counted more than 1,100 HD movies available through Vudu’s box (including about 200 that are also offered in Vudu’s Blu-rayesque HDX format), compared to 391 on Xbox Live Marketplace, and something south of 700 on Apple iTunes. (Netflix will be kicking off its own HD streaming service later this month with a mere 300 titles.) By comparison, Amazon’s Blu-ray inventory–i.e. the total number of Blu-rays available–shows a total of close to 2,000 titles, though that includes TV shows and pre-release discs.
However, while Vudu’s catalog clearly beats its Internet set-top box rivals, along with holding its own against the fledgling Bu-ray format, there’s little to distinguish the service in terms of pricing – rentals range from $0.99 to $5.99, and purchased movies range from $4.99 to $19.99.
In fact, when you consider that the Vudu set-top box is a one trick pony compared to most of its direct competitors who also offer various additional functionality, such as gaming or the ability to bridge the gap between the PC and TV, the Vudu proposition appears to deliver a lot less value for money: buy our hardware ($299) so that you can start purchasing our wares. It’s like charging people to enter the store. Instead, Vudu should find a way of giving its set-top box away for free or at least making consumers feel like they’re not paying for the box.
Two models spring to mind, one of which the company has already began experimenting with. Firstly, give those that purchase a Vudu set-top box a kickback in the form of a content voucher that offsets the initial outlay (or most of it). Through a promotion with Best Buy, the company is doing just that, effectively reducing the cost of the Vudu set-top box to $99 (the same price as a Roku Netflix Player).
Better still, however, why not move to a subscription model, whereby the box is free or heavily subsidized if you sign on to a monthly tariff with a minimum commitment. This of course would compete much more directly with Netflix (minus the DVD postal service) and cable TV services. Which is exactly who I think Vudu should be competing with.
How many last100 readers would dump their movie channel packages offered by their satellite or cable TV provider or cancel their Netfix subscription, if for a reasonable monthly fee they could access Vudu’s growing library of standard and high def movies directly on their TV, all without shelling out for the box in the first place?
I know I would. That’s if Vudu wasn’t US-only, of course.