Feb 26 Podcast #414: Wal-mart is buying Vudu
Rumors surfaced earlier this week, but it has been confirmed by official press release that Wal-mart is planning to acquire Vudu, a pioneer in the instant movie service market. Wal-mart has tried to get into the online video game once before. Does this mean the death of what otherwise was a great technology, or is it a huge step in the right direction?
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Today's Show:
News:
- Mitsubishi’s new Upscalling technology turns your HD video into 4K2K wonders
- Vizio Reclaims Top LCD Spot
- CEA: Sports Watching Going Online, Mobile
- Are Plasma TVs Still Alive?
- Cablevision To Roll Out RS-DVR In April
Other:
- Help support Listener Ken and Team In Training running for the Leukemia and Lymphoma society
- Movie rental licensing and right of first sale
- Tips on Using a UPS Battery Backup in a Home Theater
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- INSTEON Home Theater Lighting Control Kit
- The RedEye Remote Control System
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- Calibrated Measurement Microphone from Cross-Spectrum
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Wal-mart is buying Vudu
Rumors surfaced earlier this week, but it has been confirmed by official press release that Wal-mart is planning to acquire Vudu, a pioneer in the instant movie service market. Wal-mart has tried to get into the online video game once before. Does this mean the death of what otherwise was a great technology, or is it a huge step in the right direction?
The Good
Main stream
If Wal-mart is one thing, it's main stream. You can't throw a rock without hitting one. That means Vudu is now instantly main stream as well. Hopefully Wal-mart will change the name of the service. Let's face it, 'Vudu' doesn't really make most people think of instant access to new release movies.
When the Vudu service gets Wal-mart-ized, you can bet it will be simple, straightforward and super easy to use. It will have to hit the setup and use requirements of other electronics sold at Wal-mart. Not that Vudu was all that challenging, but Wal-mart knows their shoppers. If it's easy to use and easy to understand, they'll sell a ton of boxes making downloaded/streamed movies commonplace in thousands of homes.
Wal-mart also has a little bit of pull with electronics manufacturers. They could begin to demand that Vudu technology appear in the Wal-mart versions of TVs and Blu-ray players, extending the availability of the service even more. It isn't too far fetched to believe that in the near future every Blu-ray player from Wal-mart would include Vudu technology. If it's built into the Wal-mart models, it might make economic sense to just build it into the rest of them you can buy from Amazon, Best Buy or Costco as well.
Pricing
Wal-mart has long been known as the store that sells cheap stuff for really cheap. Lately they've made a move to carry higher quality merchandise but maintain the low pricing. Wal-mart is big enough that they can dictate a lot of terms. You can bet they'll want to beat the competition like Apple and Amazon on price. And they'll probably be able to.
Wal-mart sells enough DVDs that they have quite a bit of pull in Hollywood. We wouldn't be surprised if they got some special terms from the studios, be it pricing or availability. Imagine Wal-mart threatening to stop selling, or delay selling, a studio's DVDs. We're pretty sure the studios would be able to "work something out."
The Bad and the Ugly
Been there, done that
Wal-mart has tried this before and it failed miserably. They tried to get into the streamed movie rental business a few years back by partnering with HP and that failed to ever get off the ground. Maybe the concept was still too new at the time, but we're really big fans of Vudu HDX, so we'd hate to see it driven into extinction. Hopefully this time around it works out for Wal-mart.
Competition
For the most part, Wal-mart isn't a big fan of competition. Like most big companies, they don't mind driving others out of business if it helps the bottom line. In this particular market, competition is both a good and a bad thing. Because all the competitors have different content contracts, you can't always find everything you want at one particular service. One service with everything would be great.
But, and it is a big but, competition is also what pushes these companies to provide a better service. It's how we got HDX quality from Vudu, 5.1 audio from Netflix and 1080p video from Microsoft. Without competition there's really no incentive to innovate or push the limits on quality and viewing experience. Of course, HDX is really good, so maybe Wal-mart won't need too much innovation. At least not in the short term.
The Dream
All-you-can-eat Vudu
What we'd really like to see is Wal-mart going head to head with Netflix, not Apple or Amazon. Get away from the per-movie rental fees and move to a subscription based, all-you-can-eat model. If they can find a way to pull that off, we'd be huge, huge fans. Sure maybe it means the movies aren't available for streaming at the same time, or you can only watch one or two every few days, depending on your subscription rate.
But in either case, we'd have to think long and hard about the possibility of switching over. We think there are a lot of people out there who would do the same thing. And at the very least it would open the door for Netflix to do something similar. And like we said before, sometimes a little competition is a very good thing.
Reader Comments (9)
Hi Ara,
I cant wait to hear your review on the new Local Dimming LCD you get. I've got a Samsung UN55B8500 and absolutley love it. I have a plasma too and the LCD does yield a different type of picture but the black levels are fantastic.
Enjoy,
Scott
Hi guys great show as always I really like the article on the UPS Battery backup I was looking for something like that, also I was just wondering if in the future maybe you guys can make a show about how to keep all those expensive electronics clean and dust free specially those receivers with those cooling grills on top ...I know I'm not the only one having this problem.
Thanks
George!
I am excited about Walmart's purchase of Vudu. The Vudu HDX product has no peers right now and the only downside is the $5.99 download cost. But I pay almost $20 a month to NetFlix and some new Blu-ray titles in my queue play on HBO before I get them. There is no excuse for service that poor. If I can't get the Blu-ray version then Vudu is an acceptable alternative for me. I can see myself dumping Netflix and not looking back if Walmart improves the pricing. Maybe this will get Steve Jobs to wake up and Apple will get serious about the market niche he pioneered and then all but gave up on.
regarding cablevision, I am in NJ and Have cablevision. they are a company that does not look forward. there is no way I will trade my DVR for there new service. there on demand is horrible. you can not fast forward like you want it is slow and the response time is about 1-2 seconds so stopping the FF or REWIND is like walking up to the TV and doing it manually.
Friends of mine got sold a LCD HD monitor to use as a TV (mistake 1). It had an integrated DVD player (mistake 2). There were no real audio out connections. So while we could take the TV sound off of the cable box and throw it into the AV receiver. There was no way to get the DVD sound out and so they were stuck listening to DVD's thru the (less than adequate) TV speakers. They were trying to save a buck and ... you get what you pay for.
Great show as always guys. I second a 'how to keep it clean' episode, although right now i just use a DIY alcohol/water mixture. Spray it onto a cloth, then wipe. I'd be interested in hearing other solutions.
Walmart as a Video retailer???
Walmart sells a lot of DVDs but how many are current. I see bins of 10 year old movies. For current movies they don't have a better price than anyone else. There music business never took off. It was supposed to compete with Itunes. The songs were cheaper but their billing was a mess. Walmart is too diverse a company to really spend the money and devote the resources to really get this going. It is too far from their business model. Apple is up to something with that big data center in North Carolina. If Walmart creates another division to handle entertainment then maybe. Steve is probably glad they bought out his competition now he does not have too.
It seems to me that the studios are missing the boat on the streaming. If they don't get a cut of DVD rentals, why aren't they lowering the price for movie streaming? If they get a cut of iTunes movie rentals, why not make it more enticing? Imagine if Inglourious Basterds was $1.99 to rent on iTunes (or any other pay streaming service), would you go run out to RedBox or BlockBuster to get it? It seems the studios would make more money by people renting the movie over the sale of the DVD to RedBox.
One thing I would like to point out is that Ara & Braden talk about both Netflix and Vudu as "streaming". However, I think that the way they connect and transfer data through the internet is different. Netflix has a true streaming service. The quality of the video depends on the speed of your connection and there is no local storage on the playback device (box). Vudu on the other hand, is simply downloading the content over the internet - it is not streamed in real time. My understanding is that the video quality on a Vudu box is not dependent on your connections speed. Your connection speed should only determine how soon you can start watching your selection without interruption. Vudu HDX would not work for most people if it was based on true streaming. I feel that this is an important distinction that I don't recall the HT Guys making.
The new LG flat screens come with Vudu imbedded. I don't believe they have any memory or hard drive. The content to these units is streamed. Now wether or not you get the HDX quality is another question, High quality HDX is the Holy Grail of download/streaming at this time. Every other product pales by comparison right now. But if Apple upgrades the iTunes video and audio quality that will change quickly.