Blog Post

Vudu Layoffs a Sign of Doom?

The Internet set-top box herd may be thinning, as Vudu laid off roughly 15 percent of its staff on Friday, including co-founder and (former) VP of marketing Patrick Cosson. According to CE Pro, the online movie delivery service laid off 16 to 18 of its 100-person staff.

A remaining employee dutifully toed the company line to CE Pro, saying the layoffs were “just a normal process” for a startup that grew quickly, and the web site lists 19 positions being hired at the company. But we’ve heard this almost exact same song and dance before (Akimbo, anyone?).

Aside from the layoffs, Vudu’s recent actions don’t instill much confidence in the company. Adding pornography, a 99 cent bargain bin and slashing $100 off the product price don’t exactly scream stability and a successful existing business model. Not to mention that Vudu faces competition from the likes of Apple TV, Amazon and Netflix.

But as Dave Zatz points out, demises in the consumer electronics space are slow, so don’t junk that Vudu box yet (especially when the service will be adding 1,000 HD titles soon). But the writing may be on the wall for the company. As we’ve pointed out, Silicon Valley should get out of the hardware game.

21 Responses to “Vudu Layoffs a Sign of Doom?”

  1. I don’t think this will work. Google Video and Youtube are in the process of having some holywood-videos streamed for free on their websites and free for download so there’s really no big a deal reason to buy this box and not wait for the release to happen.

  2. I just bought a VUDU box from Ebay and set it up today. I found that I needed an activation code in order t link it up with my newly created account with them. Well I learned that they do not have 24/7 Support and have to wait till next Monday to get support. Dealing with technology that people are not fimiliar with a company should have adequate tech support. If I had bought this system brand new from BestBuy I would have boxed it up and sent itback and got my money back. This is poor technicl support and should have on their website a place where an activation code can be created for used resold boxes. Better yet have steps in their technical support forum on how to reset the system to factory. Shame on you VUDU!

  3. From what I understand, Vudu is really starting to do well in the high-end (CEDIA) A/V market. Adult content is a very big reason but the quality and selection is fantastic. Not sure how well it’s going to play in the consumer arena… I personally think the pending XBOX 360/ Netflix integration will be the killer app for this space as long as they can fix their quality issues (has anyone ever used that Roku box?? I feel like I’m back in 1998 watching RealPlayer movies).

  4. Joe Video

    Kikar, not all of us are named ‘Perm’ … if you actually understood blogs, you would know what a PERMalink is, lol. Otherwise I have two comments:
    1) your owning of 9 video sources makes you an extreme outlier, not a 2 sigma consumer. So it’s great that you like Vudu, but you buy one of everything.
    2) the video quality is not just (way) short of BR, but not even close to DirecTV HD, at least what I saw from Vudu’s tradeshow demo, which presumably should be as good as it gets. Not even as good as SD. Maybe they improved it in the last six months, but I wouldn’t spend the money to find out.

  5. Perm. obviously you have never used Vudu. I own an Apple TV, Vudu, Roku/netflix, Xbox360, PS3, DishHD, HD DVD and TivoHD. I can say that Vudu is my first cjhoice for movie rentals. The ease of use with the simple remote and the UI are second to none. The video quality, while not as good as Blu-ray, is the best that is offered on the market. For a person who just wants to watch movies and does not want to access viral videos from the net, this is the best choice on the market today. And it keeps getting better. So don’t knock it until you have tried it.
    Stop reading blogs to get your opinion and give it a try yourself. That is how I got all of the gadgets that I have, I like to think for myself. They have a 30 day money back guarantee but I am willing to bet that you won’t be using the MBG.

  6. Joe Video

    here’s the thing: there is no more room left under the TV. Once you have Comcast or DirecTV box, esp the DVR box, that’s just the start of your content options – You probably also have a DVD player already, and possibly an XBOX. VUDU is trying to elbow it’s way in, but with nothing compelling to show for it. The video quality is meh.. they are re-encoding HD to 4Mbps… hardly HD quality, even with H.263 or VC1. The movie selection let’s say is great, but so what… Netflix and Blockbuster offer 95% of the people what they want…. one or two movies a week in the queue to watch when they have time.

    VUDU might appeal to a few thousand people who watch one or movies a night and will pay for selection at the expense of video quality. But the audience size for this box is teensy. Hence the move to add AVN, which incidentally might really kick start some volume. But then again, becoming a porn peddler was probably not something the blue chip investors wanted for their portfolio companies, but hey, a buck is a buck!

  7. Chris,

    Thanks for taking an interest in our company. It’s not just a company line but layoffs are something that unfortunately do happen from time to time as business strategies dictate.

    As you noted, we’re still recruiting for numerous positions and I wouldn’t be expecting our demise any time soon. We still have the best (selection and video quality) library out there and are continuing to develop the product and service.

    Patrick Ellis
    Sr Product Manager, VUDU

  8. Obama08

    Who’s going to spend hundreds of dollars on a proprietary box that only lets you get some of the internet on your TV? Get a $20 cable for your laptop(Zipityzap shows you how) and then you can watch anything you want on your TV – live streams, streaming movies (Netflix, Cinema Now), etc. Web-based services provide competition and freedom of choice. Proprietary boxes don’t. You don’t need one and I predict that all of them will disappear. Perhaps this is the first crack in the dam . . .