Wal-Mart buys Vudu

February 23, 2010 // 1:06 p.m.

Tags: #1080i #1080p #720p #acquisition #h264 #hd #hdtv #porn #pron #video-on-demand #video-streaming #vod #vudu #wal-mart

American retail behemoth Wal-Mart - owner of the Asda range of supermarkets here in the UK - is branching out into streaming web video with the purchase of video on demand service Vudu.

According to a New York Times article, the retail giant is looking to offer high-definition content to HDTV owners via the Internet connections - although, at first, the service will be limited to the US.

The deal is thought to be worth around $100 million (£64.5 million) to the start-up company which launched three years ago offering on-demand film content to paying customers, and comes after rival retail chains Best Buy and the web-based Amazon.com showed interest in acquiring Vudu. Considering that the company has yet to show a profit, that's pretty good going.

The acquisition of Vudu is the second time Wal-Mart has attempted to enter the video download market, having launched a service back in 2007 in partnership with Hewlett-Packard - which sadly failed, and was terminated when HP closed its media streaming technology division. Wal-Mart has a rather more successful music download service which has been going since 2004, but despite its continued existence remains a bit-player in the face of Amazon MP3 and iTunes.

After its failure to convince consumers to buy their set-top box, Vudu moved into the technology licensing market and currently partners with LG Electronics, Mitsubishi, Samsung, Sanyo, Sharp, and Toshiba to build the Vudu streaming technology into their HDTVs. With Wal-Mart being one of the biggest retailers of HDTV sets in the US, the partnership makes sense - and prevents the technology from becoming proprietary to a single manufacturer.

While the Vudu service will continue as normal for now, Wal-Mart has already announced one major change it will be making once the deal is signed: the not-inconsiderable selection of porn available on Vudu will be deleted "immediately" so as not to harm Wal-Mart's family-friendly image.

Are you pleased to see Vudu get the back it'll need in order to become a household name, or has Wal-Mart made a mistake and backed the wrong horse in this race? Share your thoughts over in the forums.
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