Vudu Steals Hearts, Keeps Options Open

Vudu was the audience favorite at a panel I moderated last night for the MIT/Stanford Venture Lab. CEO Mark Jung shared some of his ideas for the set-top box company — which he said isn’t really a set-top box company. According to Jung, Vudu is willing to experiment with everything, save just two core things: the user interface and the ability to transmit high-quality video on the turn of a dime. He’s also unwavering in his belief that the future of content consumption will remain in the living room, on a big-screen TV.

Vudu is not the bastion of paid video some would assume; the company plans to experiment with ad-supported content as well, according to Jung. Not because its paid model isn’t starting to work: The service is notching an average of five transactions per month per user, he said. One particular customer spent $800 in a month on Vudu content! The company is also trying to eliminate the $295 it currently charges for its box by cutting deals to place them in hotels and elsewhere. And Jung said Vudu is also exploring deals to put its software into other companies’ hardware.

Vudu will also open its platform, allowing outside developers and filmmakers on board. Careful not to alienate the Hollywood moguls he’s trying to corral, however, Jung allowed that “in some cases the role of a studio is becoming undefined.”

But Vudu’s platform won’t be that open — the company will always manually moderate the content it transmits. Jung (who was formerly COO of News Corp.’s Fox Interactive Media) justified the decision by telling a very funny story about when he worked with MySpace and asked every research outfit he could find to reliably differentiate between a peach and a certain anatomical part. His conclusion: Science just isn’t good enough.

Jung’s far-flinging promises of flexibility might smack of desperation, but it’s a hard market Vudu’s trying to get a foothold in. Despite audience enthusiasm, none of the VCs on the panel was sure Vudu was a good investment.

Jung, along with other panelists, said he sees only marginal opportunities for live and interactive video. Across the board, panelists said they thought on-demand was the inevitable future.

Apologies for the imprecise notes — I was caught up moderating the panel. But it was pretty interesting to see the impact Jung’s demo had on the audience, many of whom, when I subsequently asked if they would buy a Vudu device, raised their hands. Too bad Jung didn’t have the credit-card processor available right then and there.


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