Wal-Mart buys in to online movie business

Vudu logo

Wal-Mart, the world’s largest retailer is said to have acquired a struggling online movie store called Vudu. This online store was created in 2006 but struggled right from the start because in order to rent or purchase a movie through them you had to buy a box that sits by your TV for $400. Many companies made this mistake, Apple is the big name that comes to mind. However, they eventually changed their business strategy and agreed to let companies like Toshiba, Samsung and others put Vudu’s software inside their TV sets and Blu-ray players.

This however, was too little, too late as other companies were already doing the same thing. Add to that, the cable companies starting to offer movies on demand and the result is a very small piece of the pie. Enter Wal-Mart. The retail giant can do things that almost no company can do. That is, have a conference call with movie studio executives to discuss this acquisition and perhaps persuade them to make this website a bigger part of their DVD strategy for movies. Also, Wal-Mart has the ability to promote their new website in all their stores which will surely have boatloads of their customers paying attention to it.

It is unclear how exactly Wal-Mart plans to use Vudu but, it is quite clear that just by purchasing the company it will not be enough to make it a success as it is still more convenient to rent movies through the cable provider in most cases. They will have to be more creative or at least offer lower prices, which is obviously what Wal-Mart is famous for. It would also be a smart idea to utilize the advantage of having a huge footprint in terms of physical stores for more than just promotions. Perhaps, they can try a pilot in a few stores in which they clear out all the DVD’s sold in the store and then have kiosks that you can quickly set up an account and then order what you want to rent or buy right there or at home later and those purchases will automatically download to your system, if you have a TV or DVD player equipped with the software.

Another area they can flex their big muscles is to only carry televisions and DVD players that have this software installed. They may have enough power to make the electronics manufacturers make it standard in all their products which would be very big for Vudu. Right now it appears that many options are available and it will be cool to see what Wal-Mart decides to do and how then plan to implement it.