Walmart Buys VUDU: The Next Big Player In Digital Distribution?

VUDU has been around for years. They were actually one of the first movie-streaming companies to emerge in the last decade, but they never seemed to gather a huge amount of support. Netflix already had a ton of buzz surrounding them, so when they decided to add a streaming option to complement the by-mail service, many flocked to it. Amazon's Video on Demand has also found a small group of supporters, but regardless of the different boxes and technology deployments, VUDU never seemed to get the respect it was due.

At least it never got the public respect it was due. Behind closed doors, VUDU has been receiving a great deal of respect and attention, and from the world's largest retailer: Walmart. It's a strange story, that's for sure. Walmart is known for cut-rate prices and for "putting it to the Little Guy," but it's hardly known for digital services. Walmart has tried to get into the digital distribution market before, but it closed up an MP3 delivery model as iTunes took off. One can only assume that this acquisition will allow Walmart to really make a serious move in the content streaming business, but again, only time will tell if this will end up being more successful than the failed MP3 attempt.

Walmart is not saying openly how much they paid for VUDU, but some reports are suggesting as much as $100 million in cash will be changing hands. That's a lot to pay for a company that hasn't received very much mainstream attention, but the underlying technology is underrated. VUDU can deliver true 1080p material over a mid-range Internet connection, while even Netflix tops out at 720p. There's certainly a competitive advantage here, and Walmart obviously has a thought in mind to take advantage of it. People buy DVDs like crazy for Walmart, but will they really jump to rent those same movies via the Internet from the same company? It's sort of difficult to wrap your head around Walmart as a digital company, but who knows, maybe this is just the beginning of an all new take on retail.