Wal-Mart is getting into the online movie business by acquiring download provider Vudu. Before now the mighty brick-and-mortar discount retailer hasn't had much luck with its attempts to crack the digital code--the studios dive-bombed Wal-Mart's last effort, a web store. And Vudu abandoned set-top boxes in favor of adding software that has been added to slightly more costly DVD players to enable them to stream movies off the internet. MovieBeam marked another botched attempt to get web movies into the home via expensive boxes.
Several bidders were willing to fork over $100 million for Vudu (as opposed to Netflix). So with Wal-Mart behind the distributor, this could be a game-changer, assuming everyone knows what they are doing. Here's Variety and the LAT:
The move is a bet by the retail giant, the largest seller of DVDs in the country, that consumers eventually are going to rely upon online services to watch movies rather than buy them from Wal-Mart or rent from Blockbuster. DVD sales have declined in recent years, forcing retailers and studios to look at digital distribution to make up the gap.
UPDATE: PC World's Jeff Bertolucci explains why Wal-Mart and Vudu want to enter world of video streaming.