Vudu in Deep Doo-Doo

Online movie service Vudu is slashing $100 off the price of its set-top box, just a week after Steve Jobs showed off the revamped Apple TV. And while the company will undoubtedly shout a Python-esque “We’re not dead yet!” dramatic price cuts of the company’s core product don’t bode well for its future.

Vudu had always faced an uphill battle. First, the service requires you to buy yet another set-top box, and that box will set you back $295 — $60 more than the $229 Apple TV. Second, would you prefer to buy your hardware from an unknown startup or from a company that you know will be around next year?

Finally, high-profile competitors like Apple, Netflix and Amazon are all vying for your direct movie download dollar. With their deep pockets and brand recognition, Vudu had better start working some serious voodoo if it wants to stick around.