It’s impressive really that a bumbling retail giant like Walmart managed to keep a video streaming business afloat for so long, threatened by ever-increasing and more technically accomplished adversaries. Now the time has come for Walmart to move Vudu on, the platform it bought nine years ago for $100 million, making way for a new wave of lumbering US companies in the OTT video market.
History has a habit of repeating itself. Apple, AT&T, Disney and NBCUniversal – all peddling disruptive new OTT video offerings – need to know that just because you were so successful in one field, you are not guaranteed riches in another. Sure, 3 out of 4 have enviable TV experience and the connections and cash to match (Apple being the exception with an empty TV resumé), so their fortunes are arguably more prosperous than Vudu – yet Walmart kept it going against the odds for almost a decade.
At the time, Vudu was visibly in some financial difficulty and had not long slashed 20% of its 100-person workforce.
One of Vudu’s differentiators was providing streams of Hollywood movies on the day of DVD release, with a few exceptions naturally, gaining notoriety for having a larger library of full HD (1080p) titles than any rival SVoD offering.
It targeted customers looking to get a first glimpse of movies at home before making their way to more popular OTT platforms like Netflix. Walmart was a dominant seller of DVDs so buying Vudu signaled the company preparing for a clear and obvious trend towards online video, a few years behind another retail mammoth, Amazon, which first got into online video way back in 2006 by offering downloadable titles via Amazon Unbox.
To increase its reach, Vudu then launched Movies on Us – a free, ad-supported service offering access to thousands of older movie titles – in late 2016. Vudu also worked with video technology specialist CastLabs to bring its video collection to Chromecast devices, protected using the CastLabs cloud-based DRM. It was also available on Roku.
But Vudu had bigger ideas. Walmart decided to tackle the streaming hardware sector itself with the launch of the Vudu Spark HDMI device in 2015 – a walled-garden for streaming Vudu and Vudu only. This is a seriously stripped down, low-end device with barebones functionality.
The Information was first to catch wind of Walmart’s intention to ship Vudu. A representative from Walmart commented, “Over the last nine years, we’ve built Vudu into an incredibly strong and growing business with an installed base of more than 100 million devices across America. We’re constantly having and are open to conversations with new and existing partners to explore opportunities for continued growth; however, we never share details of those discussions.”
In the end, and echoing what Faultline said many years ago, Walmart could not keep pace with the streaming industry’s swelling content spend and ultimately the company had much bigger fish to fry. Vudu was destined to be fumbled.
However, this is currently all hearsay and going by Walmart’s statement, the company may be pursuing media partnerships over a straight up sale.