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Walmart is about to make a semi-major move into digital home: the company confirmed after the market closed Monday that it is buying online/…

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Walmart is about to make a semi-major move into digital home: the company confirmed after the market closed Monday that it is buying online/embedded movie service Vudu. The retailer describes Vudu as a “leading provider of digital technologies and services that enable the delivery of entertainment content directly to broadband high-definition TVs and Blu-ray players” and calls it “revolutionary.” The deal, expected to close in a few weeks, marks Walmart’s latest effort to make online video pay, this time without a connected computer.

No financial terms are being disclosed but reports put it around $100 million, which is a bit shocking as I explain below in Vudu’s history; Walmart says the price is “not material” to its earnings. Vudu will become a wholly owned subsidiary.

Eduardo Castro-Wright, vice chairman for Walmart, explained the move in the announcement: “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.” Wal-Mart Stores, Inc. (NYSE: WMT) gains access to titles from nearly every major studio and to some 16,000 titles, including, the companies claim, the largest available 1080p VOD library.

The NYT reported earlier Monday that a deal was imminent, citing unidentified sources. The news of the talks was first reported by Mediamemo last month.

Vudu launched three years ago as a separate video delivering set-top box (and I dubbed its launch “Idiots In The Box, Part Deux“, back then), but quickly realized, much like others in the space, that a separate box was going to be a no-go. Since then it has moved to become a software/firmware layer embedded within existing boxes like connected DVD players, and TV players like *LG*, Sanyo, Toshiba and Sharp. Earlier at CES last month, Vudu launched an apps store to add to its streaming service, in effect becoming more like the newer competitor Boxee. Is Boxee next?

Based in Santa Clara, CA and funded by Benchmark Capital and Greylock Capital, Vudu has skirted with a sale for a long time, even under previous CEO Mark Jung, who left in late 2008.

Staci adds: The top exec for Vudu quoted in the joint press release is Edward Lichty, EVP of strategy and content. I’ve confirmed that he is supposed to make the move but no official word yet on the fates of Chairman and CEO Alain Rossmann or Tony Miranz, co-founder and EVP of sales & biz dev. The LAT’s Company Town quotes sources who say Rossmann “is stepping down as part of the deal, but will continue to serve as a consultant” but a Vudu spokesman wouldn’t answer questions about top management.

The last entry on the company’s blog is Feb. 10, bragging about a “rave” review by the NYT‘s David Pogue. Vudu also managed two brief logo appearances from Vizio during the TV manufacturer’s Super Bowl ad.

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  1. Arthur Vandelay Jr. Tuesday, February 23, 2010

    Hmm – did not see this one coming. Look like they raised $36 MM according to Crunchbase. Not a bad salvage for Benchmark / Greylock and co I guess.

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