Wal-Mart Yanks Vudu's Porn Channel

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Retail colossus Wal-Mart Stores, immediately after buying
over-the-top video startup Vudu, is shutting down the service's "After
Dark" adult section that offers sexually explicit VOD content.

Wal-Mart announced Monday that it was buying venture-backed Vudu, in a
deal reportedly worth slightly more than $100 million. Analysts said Wal-Mart will
use Vudu as a bridge into digital distribution of entertainment content
to TVs and other consumer electronics devices, as sales of physical DVDs
continue to decline.

Vudu's After Dark serviceHowever, Vudu's
porn-on-demand channel -- offered in partnership with AVN Media Network
-- will not become part of the $405 billion retailer's empire.

After the Wal-Mart deal was announced, Vudu began notifying After
Dark partners that the service will be discontinued and has requested
that content providers voluntarily terminate their agreements, according
to an e-mail to partners obtained by TechCrunch.

"As you may have recently heard, VUDU was acquired by Wal-Mart. In
conjunction with this acquisition we will be discontinuing the 'After
Dark' adult service over the coming days," the notice says. "Upon
completion of the shutdown process, we will settle all accounts with you
and ensure that you are paid the full amount you are owed under our
existing agreement."

The notice did not provide any explanation about why the adult
service was being shut down. Bentonville, Ark.-based Wal-Mart, however,
has a history of refusing to carry adult-oriented content. For example,
the retailer has a policy to not stock music CDs with explicit lyrics in
its U.S. stores.

Content providers for Vudu's After Dark section included Vivid,
Hustler and Wicked Pictures.

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