After 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.
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.