Blog Post

Will Opening Up Keep Vudu From Closing Down?

Download movie service provider Vudu announced today that it’s expanding its set-top box to deliver web video directly to TVs, as well as opening up to allow outside developers create applications for the device.


The new Vudu Rich Internet Applications (RIA) platform will broaden the company’s set-top box capabilities, enabling it to deliver web video from YouTube and network sites like those of NBC (s ge) and ABC (s dis); display photos from Flickr and Picasa; as well as some casual games. Vudu owners can check out a sampling of new functionality today at the new Vudu Labs section of the Vudu home page.

Sounds a lot like Boxee, the open-source media center that enables much of the same functionality (plus Netflix streaming), and can run on Macs, PCs and even the Apple TV (s aapl). Heck, the Boxee community might just port itself over to the Vudu box as well.

Opening up its box is a smart move, but will it be the gambit that pushes Vudu, which has never really caught on with consumers, into the mainstream?

You gotta give the company an “A” for effort. Over the course of this year it’s tried just about everything to get people to buy: price cuts on the box, porn, a 99-cent bargain rental bin, adding 1,000 HD titles, a new HDX high-def format, and a high-end XL2 box for home theaters.

In the meantime, however, the company laid off 15 percent of its staff at the end of August, followed by the departure of CEO Mark Jung in November. And Vudu won’t release stats, which always makes us suspicious.

Vudu’s bigger problem is that it’s always been expensive, unknown, and only did one thing. It costs $299 for the standard box, which, up until today, would only play Vudu movies. An Apple TV on the other hand, costs $229, and let you access your music, photos and YouTube video. Granted, the Vudu box has way more storage, but which brand are you going to trust to be around for awhile?

Vudu still has an uphill climb, especially in this econo-pocalypse we’re all suffering through right now, but leveraging the developer-sphere to create new uses for itself will make it more appealing.

13 Responses to “Will Opening Up Keep Vudu From Closing Down?”

  1. I don’t work for Vudu, but I am a Custom Installer/Systems Integrator that has been in the business for over 17 years. I am a Vudu dealer, but have less than a few thousand dollars committed to them so this isn’t a big part of my business.

    I have never taken on any of the other upstarts that seemed neat but also seemed destined for failure like Frox, Unity, DiVix, Voom, Sun Rocket etc. even though they all wined and dined me to support them.

    I attended Vudu’s training with a very pessimistic attitude and mainly went to learn about it so I could discourage my customers from purchasing.

    Why did I choose to “expose” myself by getting involved with Vudu? Mainly because they are doing things differently, have studio support and are the content leader, plus, they seem to be very responsive to change and innovation.

    Your article is both interesting and disappointing as it leaves out quite a few details. Here is my take on some of them:

    First, the business of Vudu laying off 15% of its workforce. This was a dirty rumor being spread around at CEDIA by scared competitors and I heard it often. According to Vudu, YES, they DID let go 17 (I think that number is correct) employees that were in jobs that were no longer needed at that stage of the game and hired more than that to replace them, mostly with sales and marketing types. BTW, Vudu still has some openings.

    I can’t tell you if Vudu will be around next year or the next…..I hope so, but, even if they aren’t most people will be out anywhere from $99 – $1,299, depending on the model purchased and where purchased. That isn’t going to break the bank, and, any purchased content will still be available for viewing.

    Second, you mention the Apple TV as it compares to Vudu. Although they will be viewed as competitors by many, there isn’t much competition when you compare the two. You seem to think that Vudu’s only advantage is more storage where it does have a huge advantage – 160mb on the Apple TV vs. 250mb OR 1tb on the Vudu.

    What about the content? Apple TV offers only a small number of HD Movies, despite their blatant lie posted on their website of having more HD than anyone else. Vudu publicly posts that they have over 1,300 HD Titles and it appears that way (I haven’t counted them, but have done some quick filters to see what they have). These are ALL movies as they don’t yet offer the TV shows in HD.

    Apple offers only a few hundred movies in HD, and, in fact, most of their 3,000 titles appear to be TV shows and not movies. I say “appear” because it is not easy to weed through their titles and they are quiet about things.

    We do know that they did not meet their goals by listening to Steve Jobs occasional slip ups at Mac World. They targeted Vudu in January and said that they would have 1,000 movies (all resolutions) by the end of February. They were at 600 and blamed it on the studios. They also removed the count from their on-screen GUI with a new software release. Since then they have been tight lipped with news slipping out in October that they were still far behind their internal goals.

    [b]Next, look at the technology: [/b]

    Vudu is a much more robust system with a far better GUI (IMHO). The Apple TV GUI is slow and clunky by comparison (yes, we have sold and installed these for clients too).

    Vudu has made constant improvements and enhancements (like the recent Vudu Labs announcement).

    Vudu’s search and “drill down” features are the best available….want to see all of the movies that have a certain actor/actress, director, word in the title, etc. it is fast and easy AND you can get there from multiple ways.

    Vudu offers weekly employee picks, and an assortment of collections (like holiday movies, featured actors/actresses, 85 movies honoring Warner Brothers 85th anniversary, etc.). These features help get people out of the rut of only watching the blockbusters, expanding their enjoyment of their equipment investment (good for my business!).

    Vudu has the strongest and easiest to use Parental Control that I have seen. In addition, so children aren’t cheated from being able to view Bugs Bunny or other such titles w/o either having their parents select it for them or easing the parental control settings, they have added a NR Family rating to the traditional MPAA ratings. This is a flaw in Parental Control in most, if not all, other systems.

    Vudu offers instant 1080p HD Movies compared to Apple’s 720p that is often delayed due to their client/server arrangement. As more people use their service, they either have to do major hardware upgrades OR the service gets worse and worse. Vudu’s peer to peer networking avoids this.

    So, more storage, more content (HD and standard), higher resolution, better GUI, better Parental Control, better expandability and a company that can respond quickly to changes and enhancements. More than just a storage advantage!

    Even with the Vudu Lab beta, the Apple TV still has the advantage of pulling pictures from your Mac or PC and offers an array of special effects….so, buy an Apple TV or iPod for that function and leave the movies to Vudu.

  2. james pierce

    I agreed with Neil. Vudu has a flawed business model with p2p streaming which is pretty dead right now. Look at joost. After Netflix/Blockbuster/Mytvpal launches HD streaming, the writing is on the wall for VUDU. The $299 price point and exit of the ceo pretty well drive the final nail into the sinking ship. No crappy youtube support will save this titanic from sinking. Hopefully VC will finally learn from this one.

  3. A business model for an emerging company that depends upon yet-another-unique-stb will fail. They always do. Always. There has to be some compelling benefit other than replicating what a user can do today, which is watch video on TV. Tivo was an exception when they introduced the DVR capability, and as that has migrated into cable/sat STBs the value prop is diminished. Game consoles have earned their place for amazing gaming. The only chance for new video services viewed on the PC or TV, in my opinion, are to and through existing devices in the home. We discuss these and other topics at