Wal-Mart's Vudu Conjures Up iPad Trick - Multichannel

Wal-Mart's Vudu Conjures Up iPad Trick

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Wal-Mart Stores' digital movie service, Vudu, is bowing a website optimized to let users rent or buy about 27,000 titles via Apple's popular iPad tablet -- but has no plans to get into the iTunes App Store.

The company decided against developing an iPad app for a variety of reasons, Vudu general manager Edward Lichty said in an interview.

Apple takes a 30% cut of digital media sold through iTunes apps, so a Web-based streaming service on the iPad has more "favorable economics," Lichty noted. In addition, he said, "we have a great deal of autonomy -- when we want to update it, we update it... It's a website."

In addition, Lichty said, Vudu determined that it was able to create as good a customer experience through an HTML5-based website as with a dedicated iPad app.

Vudu on iPad

"There is no discernible promotional benefit" to being listed in iTunes App Store, Lichty said. "There are 250,000 apps."

Last month, Wal-Mart -- the world's largest retailer -- integrated Vudu into Walmart.com, which now provides links to the streaming-video service alongside DVD search results. Movies are available from Vudu to rent for 99 cents to $5.99 or to buy starting at $4.99.

Since January 2011, Vudu has had threefold growth in sales, according to Lichty. He declined to provide specific numbers.

Vudu has content distribution agreements with major Hollywood studios, including Walt Disney Co., Fox Entertainment Group, Warner Bros. Entertainment, NBC Universal, Paramount Pictures and Sony Pictures Entertainment.

Vudu is currently available on more than 300 consumer electronics devices, including the Sony PlayStation 3 and Internet-connected HDTVs and Blu-ray Disc players from Funai Electronics (Magnavox, Sylvania), LG Electronics, Mitsubishi Digital Electronics, Panasonic, Philips, Samsung, SANYO, Sharp, Sony, Toshiba and Vizio.

Movies purchased or rented on the iPad can also be viewed on Walmart.com/vudu, Vudu.com or on any Vudu-enabled consumer electronics device.

Asked about the Digital Entertainment Content Ecosystem's UltraViolet, Lichty noted that Vudu is a member of DECE but does not currently have announced plans to support UltraViolet. The UltraViolet system is designed to let a consumer buy a movie in one medium (e.g., a DVD) and have the ability to access it on other participating UltraViolet-enabled services.

In March 2010, Wal-Mart paid about $100 million to acquire Vudu, which remains based in Santa Clara, Calif., as a wholly owned subsidiary. Vudu has 55 employees, Lichty said.

Separately, on Tuesday Wal-Mart announced that it is exiting the digital music business and will stop selling digital music online effective Aug. 29.

"We recently notified our music partners that we've made a business decision to no longer offer MP3 digital tracks as of August 29, 2011," the retailer said in a statement. "We'll continue to provide support to our customers who previously purchased digital music through Walmart Music Downloads so they may continue to enjoy and manage their existing WMA [Windows Media Audio] files."

Bentonville, Ark.-based Wal-Mart operates 9,029 retail outlets in 15 countries and has more than 2 million employees worldwide.

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