Wal-Mart Buys Vudu To Deliver Movies Via Broadband
Deal Reportedly Worth Slightly More Than $100 Million
By Todd Spangler -- Multichannel News, 2/23/2010 9:10:18 AM
Wal-Mart Stores is jumping back into digital-movie delivery with the acquisition of Vudu, a Silicon Valley startup that offers some 16,000 videos for rent or download-to-own through Internet-connected set-tops.
The move puts the world's largest retailer back into the fast-evolving market for delivering paid entertainment content over broadband Internet pipes, territory that is being staked out by players ranging from Netflix and Apple to major cable operators like Comcast and programmers like HBO.
Financial terms of the Vudu deal were not disclosed. Wal-Mart -- which had $405 billion in sales last year -- noted the acquisition is not material to earnings for its quarter ending April 30. Wal-Mart paid "slightly more than" $100 million for Vudu, The Wall Street Journal reported, citing an anonymous source.
Vudu's Internet set-top"The real winner here is the customer," Wal-Mart vice chairman Eduardo Castro-Wright said in announcing the deal. "Combining Vudu's unique digital technology and service with Wal-Mart's retail expertise and scale will provide customers with unprecedented access to home entertainment options as they migrate to a digital environment."
Wal-Mart is coming back to digital movies after it abandoned a previous attempt in 2007. The retail giant shut down its movie service, which offered up to 3,000 movie and TV titles for sale online the same day DVDs are released, after less than a year in operation. Wal-Mart had contracted with Hewlett-Packard to develop the service and provide the infrastructure to deliver the content over the Internet.
Vudu has licensing agreements with major movie studios -- including Walt Disney Studios, Lionsgate Entertainment, New Line Cinema, Paramount Pictures, 20th Century Fox, Universal Studios and Warner Bros. Entertainment -- as well as independent and international distributors to offer approximately 16,000 movies, including more than 2,000 HD titles.
Santa Clara, Calif.-based Vudu will become a wholly owned subsidiary of Wal-Mart. The companies said the deal is expected to close within the next few weeks.
Vudu's investors include venture-capital firms Greylock Partners and Benchmark Capital. The privately held company was founded in 2004.
In addition to its own set-top box, the Vudu service is being build into broadband-enabled TVs and Blu-ray Disc players. The company has not disclosed how many set-tops it has sold to date.
Wal-Mart said Vudu will continue developing entertainment and information services such as Vudu Apps, which delivers streaming Internet applications and services to Internet-connected devices. Partners that offer apps through Vudu include Facebook, Flickr, Twitter, The New York Times and The Associated Press.
