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Walmart Buys Vudu: Will Online Video Streaming Go Mass Market?

Netflix might be the current leader among online movie and video streaming services—after years of having a company name that didn’t match a rent-by-mail business model—although it’s got some competition from the likes of Amazon Video-on-Demand, Sony, and Blockbuster. Now, a whole different kind of player has entered the video streaming market: mega retailer Walmart has announced it is acquiring online movie streaming service Vudu.

Financial terms of the acquisition were not disclosed, although reports and industry insiders place the value of the deal in the neighborhood of $100 million.

“The real winner here is the customer,” said Walmart vice-chairman Eduardo Castro-Wright, in a statement. “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.”

Industry watchers see the Vudu acquisition as part of a larger retail strategy that focuses on what Walmart does best: sell big boxes. Walmart is the world’s largest retailer, and has had tremendous success selling large-screen HDTVs to consumers who are eager to get on the digital TV and high-definition bandwagon without overly straining their bank accounts. As broadband to the home becomes more common and Internet connectivity gets cheaper to build into televisions, Walmart sees an opportunity to close the circle with those buyers: rather than being content with just selling them the television, Walmart can also sell them an Internet-based movie service. Walmart would also likely integrate the service with other video consumer electronics devices like DVRs and disc players.

Walmart does have a lackluster track record with delivering digital media. The company has launched its online online music store and (in conjunction with Hewlett Packard) even its own online movie service, but neither caught on with customers.

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