Turns out the rumor mill was right again. Mega-retailer Wal-Mart has reached a deal to buy online movie service Vudu, a move that gives Wal-Mart a way to get back into the VOD market, something it has tried--and failed--twice to enter. Vudu spokesman David Speiser said the companies had reached a definitive agreement on a deal that will close in the next few weeks. He declined to be specific about terms of the deal. Wal-Mart said Vudu would operate as its wholly-owned subsidiary. The Wall Street Journal reported that one source put the value of the deal at more than $100 million, and said Cisco also had shown interest in the company. In January, reports said Vudu had been shopping itself for some $50 million, a price the market seemed reluctant to go along with. After the sale, Vudu will continue to develop entertainment and information delivery apps.
"The real winner here is the customer," said Eduardo Castro-Wright, vice chairman for Wal-Mart. "Combining Vudu's unique digital technology and service with Wal-Mart retail expertise and scale will provide customers with unprecedented access to home entertainment options as they migrate to a digital environment." Vudu can deliver video to consumers without cable or a computer. Customers who have broadband Internet access and an Internet-ready TV or Blu-ray player can rent or buy movies through Vudu.
While one of Vudu's major selling points apparently is its compression technology, it also has licensing agreements with almost every major movie studio and dozens of independent and international distributors to offer approximately 16,000 movies, including the largest 1080p library of video on-demand movies available anywhere. It also recently has closed deals with several major CE manufacturers to have its app embedded on their TV sets.
"Vudu's services and Apps platform will give Wal-Mart a powerful new vehicle to offer customers the content they want in a way that expands the frontier of quality, value and convenience," said Edward Lichty, Vudu executive vice president.
Vudu, which has raised more than $21 million from investors since launching three years ago, has been unable to turn a profit.
For more:
- see this Times story
- see this release
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