Set-top box movie service Vudu claimed a first today, offering download to-own movies in HD, albeit with a very limited catalog and high prices.

Previously, the company (like its competitors, which include Apple and Microsoft) offered HD content for rental only, but now customers can choose to pay between $13.99 and $23.99 to actually own the movies they download, which can be either stored on their Vudu hard drives or on the company’s own servers through its Vudu Vault ‘backup’ service. The only studios to be on board so far, however, are independents FirstLook, Kino and Magnolia Pictures, who together will begin by offering just 50 titles (compared to the 1,400 HD movies that Vudu makes available for rental), including “War, Inc.”, “Transsiberian” and “Man on Wire”. Moving forward, each participating studio has agreed to license new releases for sale in HD through Vudu on the same day and date as their DVD release.

See also: Vudu’s latest price cut is a start, here’s what else they need to do

Limited content aside, Vudu’s pricing remains too high, a problem not specific to the service but one that the company has failed to address nonetheless. As Streaming Media’s Dan Rayburn writes, it’s probably not Vudu’s fault, as the pricing will have been dictated by the studios themselves. Either way, as far as consumers are concerned, downloads of any sort – even in HD – shouldn’t cost the same or more than the DVD equivalent. And the issue is further compounded when you factor in that Vudu’s use of a proprietary video format (however high quality) and its copy-protection scheme means that content can’t be moved to other devices and is completely reliant on the company staying in business, which in the nascent market of video downloads is far from guaranteed.

It feels like deja vu. Set-top movie service Vudu has slashed its prices again. The entry level Vudu box can now be purchased for $149 (down from $295), and this time without any kind of mail in rebate. That said, the box still doesn’t feature built-in WiFi connectivity, so the company has also “slashed” the price of its optional wireless kit to $79. Add the two together and the price is a less enticing $228.

Of course, any price cut is a welcome one and, slowly but surely, Vudu is getting closer to the ‘feels like free’ price point that I’ve argued is needed if the service is ever to go mass market. For that to happen, however, here’s what else Vudu needs to do…

Despite making its own range of set-top boxes, including two high end devices aimed at home theatre enthusiasts, Vudu’s future ultimately lies outside of building its own hardware, says the company.

“We’re a software company first and foremost,” Vudu co-founder Tony Miranz tells CEPro.com. The set-top movie box service had to design and manufacture its own hardware in order to sell the concept to third-party consumer electronics companies, says Miranz.  The plan now is to “try to piggyback on TVs, DVD players and other classes of devices.”

Set-top box movie service Vudu already targets the home theater crowd with its higher end XL offering, but now the company is taking up a notch with the release of the Vudu XL2.

Described as being “designed specifically for professional home theater installations”, the XL2 sports an aluminum case that houses a 1U rack mountable unit, uses the “highest quality components”, and like its XL sibling, features a terabyte of storage — enough to store more than 500 standard definition movies. Other high end features include IP and IR control to allow the XL2 to be integrated into “most high-end home control systems”, along with 1080i HD output over component, and the ability to route and switch HD signals through the home with the use of off-the-shelf video switchers. The result, says Vudu’s Tony Miranz, makes the XL2 a home theater installer’s “weapon of choice”. At a premium price, of course.

The Vudu XL2 will be listed at $1,299 and is available today exclusively through more than 1,000 Vudu-certified custom installers, says the company.

It’s interesting to see Vudu continue to pursue the high end home theater market, a natural fit, in terms of the company’s recent focus on HD content. It also helps to differentiate Vudu’s offering, on a hardware level at least, from competitors such as TiVo, Apple and Microsoft. But does that make it the right strategy?