Walmart Buys VOD Firm Vudu, May Not Change Industry Landscape

The New York Times reports that Walmart (WMT) has bought video on demand hardware and software company Vudu. The firm’s service is built into set-top boxes and Blu-ray devices. The paper reports that Vudu recently “announced deals to puts its service into the devices of Samsung, Sanyo, Sharp and Toshiba and said it was expanding its older relationships with LG Electronics, Vizio and Mitsubishi.”

The transaction puts Walmart at the heart of a business that is dominated by cable set-top boxes, telecom fiber-to-the-home services, and satellite TV. Recently, high-tech leaders including Apple (AAPL) and Amazon (AMZN) have also entered the field. NetFlix (NFLX) has launched its own video streaming services.

The online and cable-delivered premium video industry is probably already too crowded for Walmart to become a leader in the business. The world’s largest retailer is obviously operating under the assumption that its market share in the DVD business will give it access to consumers who want to us its branded product for online movies, video hardware products and HDTV. If wishes were horse all the beggars would ride.

Douglas A. McIntyre