M+E Daily

Wal-Mart And Vudu: Movie Streaming Service Ranks High In Studios’ New Distribution Heirarchy

Wal-Mart is getting back into the digital entertainment distribution business with its planned acquisition of the Vudu movie download and streaming service.

The deal, which is expected to close within the next few weeks, shores up the digital position of the country’s top DVD retailer, as studios mull reconfiguration of release windows to favor physical disc sales as well as a la carte video-on-demand transactions.

Vudu has trailed Netflix and Apple in Internet-based video on demand since its 2007 debut. But the company has licensing agreements with most major studios as well as independents, offering some 16,000 titles. Like Netflix’s service, owners of certain new TVs and Blu-ray players can access Vudu’s catalog directly from their TV screens. Like Apple, Vudu offers a-la-carte pricing for movie downloads and streams.

Vudu’s pricing structure helps to put the service higher up on studios’ newly emerging distribution hierarchy than Netflix and Redbox, both of which have agreed to rent new-release films from Warner Bros. four weeks after their DVD street dates. For example, Warner Home Video’s new release “The Informant!” is on Vudu, but unavailable to Netflix subscribers until March 23.

Wal-Mart was unsuccessful in establishing its own movie download service three years ago. However, with consumers increasingly aware of direct-to-TV streaming, the market seems ripe for reentry.

It remains to be seen whether Vudu will continue as a separate business and brand – and to what extent Wal-Mart integrates the service with its DVD and Blu-ray merchandising operations.