Wal-Mart Back in the Online Movie Business

After two previously scuttled Internet ventures, big-box chain reportedly acquires venture-capital-funded movie site Vudu

Last Updated: February 22, 2010 @ 6:56 PM

Wal-Mart is ready to take another shot at the online movie-delivery business, agreeing Monday to purchase venture-capital-funded streaming service Vudu for an undisclosed sum, the companies jointlynannounced Monday.

Having raised over $21 million in capital from investors including Greylock Partners, Benchmark Capital and Artis Capital, among other institutional firms, Santa Clara, Calif.-based Vudu has amassed a library of thousands of film and TV shows from the major studios.

According to published reports, the company was looking for a sale price of more than $50 million.

Wal-Mart, the world’s leading DVD retailer, has already sought several times to get into the online movie-delivery game, one way or another.

In 2003, the company launched an online DVD rental service designed to compete directly with Netflix, but scuttled the venture two years later. Likewise, a fledgling movie download service intended to compete with Apple’s iTunes was abandoned in 2007.­

For its part, Vudu has garnered raves among tech enthusiasts as an elegant service merely in need of a solid distribution model, streaming movies day and date with their DVD release in full 1080p high-def resolution.

Initially, Vudu’s business plan involved the sale of dedicated set-top boxes, but the company has migrated to a solution involving embedded components in consumer electronics devices including Internet-enabled TVs and Blu-ray players.

Of course, in make those distribution deals with major consumer electronics brands, having Wal-Mart as a partner will provide leverage.

"The real winner here is the customer," said Eduardo Castro-Wright, vice chairman for Walmart. "Combining VUDU’s unique digital technology and service with Walmart’s retail expertise and scale will provide customers with unprecedented access to home entertainment options as they migrate to a digital environment."