VOD service Vudu to become Wal-Mart's child

vuduAfter rumors circulated in January that US retail giant Wal-Mart was eying the video-on-demand service Vudu, the New York Times is reporting that it’s a done deal. Still no official word from either company but Dan Rayburn via one of his sources says the ink has dried and that’s good enough for me. It’s also an interesting end to a pretty long story:

Vudu started as a feisty silicon valley startup, unfashionably entering the consumer hardware space with its own set-top and accompanying HD video download store. Whilst its offering received good reviews based on the UI, movies were relatively expensive, as was the box itself, and I was always skeptical that consumers in great numbers would pay for hardware just to enter the store. The Vudu box was a one trick pony, providing a store front to the company’s content, or that’s how it felt to me. Competing consumer set-top boxes seemed to offer a lot more.

Eventually, Vudu opened up a little, supporting services other than its own, and lowered the price of its entry level hardware, but that still didn’t seem to be cutting it.

Then, perhaps unsurprisingly, the company announced a change of track. It was no longer about the hardware but Vudu was going to license its platform to CE manufacturers and telcos to utilize in their set-top boxes, Internet-connected TVs and Blu-ray players etc. Putting it head-to-head with Netflix, for example, and Internet-TV widget offerings, such as Yahoo’s. And of course, another startup, Boxee.

The Wal-Mart acquisition, while the best (and only?) available outcome for Vudu, seems like an odd one. Wal-Mart sells TVs in droves but now has an interesting conflict of interest. It will be selling Internet-connected TVs that support Vudu – a platform it now owns – alongside sets that run the platforms of others.

There’s also the question of what exactly Wal-Mart have purchased: Vudu didn’t have a huge customer base and has limited distribution, so it’s more about the tech.

And the retail store’s track record with its digital offerings isn’t too good either.

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last100 is edited by Steve O'Hear. Aside from founding last100, Steve is co-founder and CEO of Beepl and a freelance journalist who has written for numerous publications, including TechCrunch, The Guardian, ZDNet, ReadWriteWeb and Macworld, and also wrote and directed the Silicon Valley documentary, In Search of the Valley. See his full profile and disclosure of his industry affiliations.

One Response to “VOD service Vudu to become Wal-Mart's child”

  1. raycote says:

    Why would I want to pay extra for an InterNet capable TV or set top box that will only connect to a limited number of fixed web services that the device manufacturer has struck a commercial deal with. How does that represent long term value to the customers.

    OH….RIGHT…. the customer's interests are of little importance when it come to corporate value chain considerations.

    What ever happened to the old “CUSTOMER IS KING” as the key to forming a long term and thus profitable relationship with your customers?

    I guess we still have to leave that up to Apple. Everybody wants to be the next Apple Killer as long as they don't have to stoop to Apples level and actually practice any form of “CUSTOMER IS KING” because everybody knows customers are not willing to pay extra for a quality experience, except if you're Apple. Duh, someone with deep pockets should just go ahead and give it a try, it just might work, their price commoditization approaches certainly have not?

    That leaves me with little other choice, I will just have to waiting untill next year when Apple takes it's obvious next step and just slaps a version of the iPad's circuitry right into a Flat Panel TV. That way, I will have access to a complete web browser, all web based services including all web video services and a huge array of custom App Store, native App based services. There you go – AppleTV Version-3

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