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Walmart Buys Vudu to Improve Position in E-Book, Movie Business

Walmart Buys Vudu to Improve Position in E-Book, Movie Business

Jason Mick

Walmart may be the largest retail chain in the U.S. and one of the biggest companies in the world, but the wildly successful ultra-ubiquitous retailer has shown signs of weakness in sales of physical media like DVDs and CDs. Competitors like Amazon.com and Apple have stolen away plenty of business with their digital downloads Walmart offers downloads of its own. In 2009 it held less than 8 percent of the digital market, though. On the other hand, it was the second largest total retailer of music (physical and digital) at 14 percent, behind only Apple (25 percent).

Now Walmart has acquired a startup called Vudu that offers movies and TV shows for sale or rental over the internet. The service is currently compatible with numerous internet-connected devices including many Blu-ray disc players and some LG televisions. 

The acquisition terms were not made public.

Walmart is also thought to be cooking up an e-book deal with knfb Reading Technology, a joint venture of the National Federation for the Blind and Kurzweil Technologies, run by futurist Ray Kurzweil. Knfb provides services which allow large retailers to set up e-book stores within weeks. Mr. Kurzweil would only comment, “We have agreements with large retail chains.”

In the e-book arena Apple recently tossed its hat into the ring with heavyweights Amazon.com and Sony. Barnes and Nobles also recently made the jump, announcing its Nook e-book reader and purchasing e-bookstore Fictionwise.

Walmart had previously paired with Hewlett Packard to try to sell digital TV and movie downloads back in 2007, but quietly pulled the plug on the service at the end of 2007.

The company faces tough competition this time around. Netflix and Redbox are scooping up customers in the video download business and Blockbuster is clinging to a significant marketshare. And other players such as Sonic Solutions, which owns the CinemaNow service, are also making a splash on the market.

These competitors may lack the unparalleled hunger of Walmart, though, and that may allow the retailer to gain ground in these markets.  Describes Ed Weller, an analyst at ThinkPanmure, “They want to sell everything. They’ll leave no stone unturned.”

_© 2009, DailyTech