Entertainment Industry

Category: Vudu

Disney movies missing as Wal-Mart's Vudu comes to iPad

Wal-Mart Stores' digital movie service Vudu is coming to the iPad, minus one of Hollywood's biggest studios.

Walt Disney Studios movies will not be available to Vudu users on the iPad, even though movies from the other five major Hollywood studios -- 20th Century Fox, Paramount Pictures, Sony Pictures, Universal Pictures and Warner Bros. -- are. Disney movies are available on all other devices on users can access Vudu, including computers, Internet connected televisions and Blu-ray players.

Instead of creating a downloadable application, Vudu has designed a version of its website specially designed to work on the iPad that launched on Wednesday. That gives it full control over the experience without being vetted by iPad manufacturer Apple Inc. Perhaps more importantly, it also lets Vudu keep all the revenue when users rent or buy movies. For transactions done within applications on its devices, Apple takes a 30% cut.

Apple is led by Steve Jobs, who is also the largest individual shareholder of Walt Disney Co.

A Disney spokesperson declined to comment on the reasons why the studio's films are not available via Vudu on the iPad.

Vudu is the first major transactional video-on-demand service to launch on the iPad and compete directly with Apple's own iTunes Store. The selection of more than 20,000 movies and television episodes is similar to iTunes -- except for the Disney content.

Vudu General Manager Edward Lichty said he hopes that availability on the iPad will help increase his company's user base because accounts are connected across devices. People who purchase a movie on an Internet-connected TV can watch it later on an iPad, or vice-versa.

There are restrictions that put Vudu at a disadvantage compared with iTunes, however. Users can't download movies, meaning they can't watch when their iPad isn't connected to the Internet. In addition, its movies are only available in standard definition on the iPad, while iTunes lets people download them in high definition.

Although Vudu won't be an iPad app, it is giving users the ability to put an icon on the device that with one click goes directly to the Vudu website.

"It's not an app, but people will have a hard time telling the difference," Lichty said.

Vudu has taken a number of recent steps to expand its library and availability, including launching on the Wal-Mart.com website. Lichty said that the service's user base has tripled since the beginning of the year.


Wal-Mart adds streaming video to its website

Wal-Mart to acquire movie download provider Vudu

-- Ben Fritz

Photo: A mock-up of Vudu on the iPad. Credit: Vudu

Wal-Mart adds streaming video to its website

Photo: A screen shot of the film "True Grit" is shown as one of the titles available on Wal-Mart's new video-streaming service. Credit: Associated Press / Wal-Mart Stores Inc. Wal-Mart Stores Inc. has added streaming movies to its website as the world's largest retailer attempts to grab a bigger share of the online movie market from rival service Netflix Inc.

The decision to offer movie sales and rentals through Walmart.com comes just two weeks after Netflix raised prices for the majority of its customers. The price hike provoked howls of protest from consumers and disappointing subscriber growth projections, leading to a significant drop in Netflix's stock price.

Wal-Mart, long the nation's leading seller of DVDs, signaled its intent to double down on digital movie distribution in February 2010, when it spent a reported $100 million to acquire Vudu, a Silicon Valley start-up that was gradually being added to home entertainment devices.

Since the acquisition, Vudu has been able to leverage the giant retailer's clout with manufacturers to incorporate is service into more than 300 consumer electronics products, including Internet-connected television sets, Blu-ray disc players and the Sony PlayStation 3 game console.

This spring, Vudu began offering movie rentals and purchases via the Web, through Vudu.com, positioning the service to better compete with the likes of Amazon.com, Apple Inc.'s iTunes or Blockbuster.

Offering 20,000 movie titles for rental and purchase through Wal-Mart's website, which attracts about 40 million monthly visitors, is a further step in that direction. It better positions the retailer to take on established online players, as well as traditional competitors such as Best Buy, which last may bought digital video service CinemaNow.

On Wal-Mart's website, the movies will be available the same day the DVDs go on sale in stores. Rental prices range from 99 cents to $5.99. Digital purchases are priced from $4.99 to $24.99.

Walmart.com general manager Steve Nave said the retailer is following its customers as they increasingly embrace digital movie rentals and purchases.

"We know customers are starting to shift their behavior, in terms of how they consume their media," Nave said, adding, "As as customers make that change, we don't want to lose that customer as they shift to digital."

Wal-Mart has been a laggard in the digital space, vying for third place with Sony's PlayStation Store and Amazon's Video-on-Demand. Its Vudu service currently accounts for fewer than 10% of all transactions -- and even less revenue, because of its 99 cent promotions, according to researcher IHS Screen Digest.

"iTunes is the market leader in this field, accounting for approximately 65% of all movies and TV shows bought or rented over the Internet," said Arash Amel, IHS's digital media research director.

Amel doubts that incorporating the Vudu service on Wal-Mart's site will move the needle, in terms of market share. Consumers have shown through the failures of other services that they don't want to watch movies on computers.

"The real strategic significance here is this is the fist step in the retailer trying to once more figure out how online video can add any meaningful value to the e-commerce components of its core business of physical goods," Amel said.


Wal-Mart to acquire movie download provider Vudu 

-- Dawn C. Chmielewski

Photo: A screen shot of the film "True Grit" is shown as one of the titles available on Wal-Mart's new video-streaming service. Credit: Associated Press / Wal-Mart Stores Inc.

Vudu online movie rental service adding more TV shows

Vudu screen grab
Wal-Mart's online video service Vudu, which has built its rental business streaming newly released movies in high definition, has just added a number of popular TV shows to its lineup, including episodes of the CW's popular "Gossip Girl" series. 

"When we were a startup, we had to kind of pick our bets -- and we focused on high-definition movies," said Vudu General Manager Edward Lichty. "One of the things that we have an opportunity to do now is expand our library broadly."

Vudu will offer episodes from past seasons of such top-rated shows as Fox's "Glee" and "Bones" and ABC's "Modern Family," as well as prior seasons' cable offerings including Showtime's "Weeds" and "Nurse Jackie." Prices per episode start at $1.99.

Lichty said he hoped to secure more current programs. "Gossip Girl" episodes will be available a day after their initial broadcast.

The decision to expand Vudu's television rental offerings comes as competition intensifies among online video services.

Hulu, an online service owned by media conglomerates News Corp., NBCUniversal and the Walt Disney Co., has attracted about 27.5 million monthly users by offering free, next-day viewing of current season's TV shows.

The dominant player, Netflix, now rivals the nation's largest cable operator in number of subscribers with 23 million subscribers. Its growth has been propelled by the popularity of its online streaming service, which makes a large selection of movies and TV shows available for a monthly fee.

Amazon.com in February launched a Netflix-like service called Prime Instant Videos with about 2,300 movies and TV shows.

Wal-Mart, the nation's leading seller of DVDs, acquired Vudu last year to give it a digital presence and help the retailer extend its reach into the growing number of Internet-connected devices and TV sets. Although the retail giant declines to break out sales figures for Vudu, Lichty said the business had grown 700% since the acquisiton.

Vudu's on-demand rental service is now available on 19 million devices. Two weeks ago, Vudu launched a Web version of its offering at Vudu.com that can be accessed by anyone with an Internet connection.


Hulu is popular, but that wasn't the goal

Netflix's days without competition may be numbered

-- Dawn C. Chmielewski


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