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Wal-Mart acquires online movie service Vudu (updated)

Wal-Mart wants to work some voodoo on the online movie distribution business. The retail giant has acquired struggling digital video store Vudu, according to a person familiar with the situation. Vudu launched with much fanfare in 2006 but was unable to interest consumers in buying its pricey set-top box necessary to watch movies.

Representatives for Vudu and Wal-Mart could not be reached for comment.

Executives at several movie studios have been contacted by Wal-Mart for briefings this afternoon.

When Vudu launched in the fall of 2006, it sold a $400 box that consumers could use to rent or buy digital movies and watch them at home on TV. Like other Internet-connected set-top boxes, such as the Apple TV and MovieBeam, Vudu was unable to find many buyers willing to spend several hundred dollars on hardware on top of the money it cost to rent or purchase a movie via the Web. They became particularly unappealing in the last couple of years as more video-game consoles and cable boxes provided video on demand.

In December of 2008, Vudu began allowing consumer electronics manufacturers to integrate its software into their own devices to enable movie downloads. Throughout 2009, it announced deals with numerous television and Blu-ray player makers that agreed to offer Vudu on their devices, such as LG, Mitsubishi, Sanyo, Sharp and Toshiba. That's a very crowded market, however, with companies including Amazon.com, Netflix, Microsoft, Sony and cable and satellite operators all offering movie downloads, rentals or subscriptions by way of the Internet.

At the same time, the company was running short on cash from its original venture-capital investors and was shopping itself to potential buyers last year, said two people familiar with the situation. As recently as last month's Consumer Electronics Show, Vudu was entertaining private meetings with potential buyers, including Wal-Mart, said one of the people.

The deal marks Wal-Mart's second attempt to get into the digital video business. In 2007, it partnered with Hewlett-Packard to launch a Web store that sold downloads of movies and television shows. It shut down the store after just 10 months. It was one of many unsuccessful film-download businesses to launch at the time. All were plagued by usage and pricing restrictions imposed by movie studios wary of undercutting the multibillion-dollar DVD business.

[Update, 4:43 p.m.: According to two people familiar with the matter, Vudu chief executive and chairman Alain Rossmann is stepping down as part of the deal, but will continue to serve as a consultant. Executive vice president of strategy and content Edward Lichty will manage the Vudu unit for Wal-Mart.

The retailer plans to maintain the Vudu brand and will continue to embed its software on devices sold by other retailers while also promoting it in Wal-Mart stores.]

[Update, 9:18 p.m.: For more, see the story in tomorrow's Times.]

-- Dawn C. Chmielewski and Ben Fritz

Comments () | Archives (7)

Adore VUDU hate WalMart. What do I do now?!

With Walmart interested in Vudu, you can say goodbye to uncensored movies. Just like they did in the music business, they will try & impose their holier than thou standards on the rest of us. I hope their bid fails so we can watch the movies the way the director intended them to be watched, not the way the religious wacko's @ Walmart think hey should be watched. For you people that shop @ Walmart, quit complaining about your jobs being lost. It was Walmart that forced the jobs overseas in the first place.

Another device to suck bandwidth that may be regulated/charged for pay as you go in the near future.
Wal-mart past actions indicate that the service could disappear at anytime.
Hollyweird already is complaining about Redbox.
I will take a wait and see on this one.

The problem is more with the movie studios more than the retailers. Even when they have no investment to distribute a movie, they want a ridiculous price for them. The studios always try to blame things like torrents and Red Box machines for undercutting their sales when, in reality, it's their greed.

It a shame that VUDU and ventures like it have failed. But, the studios are to blame for it. Walmart tends to have more influence with the them because they control a large part of the DVD market. Hopefully, Walmart can give the tree a good shake and wake up those overpaid executives. No downloaded movie should cost more than ten dollars to own.

Adore VUDU but hate WalMart? You sure pick winners. Now WalMart can take VUDU everywhere. Think big picture, pipsqueak.

Does this mean that all the time you are watching a movie there will be kids screeching in the background?????

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The most famous Tudor dropship watch“MN” Submariner is the dropship watch snowflake blue dial 1970’s ref. 94010, but lots of different references have been used by the French Navy dropship watch.

Here’s a list of the Submariner models used by the Marine Nationale :

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