WalMart Agrees to Buy Movie Service Vudu

According to the New York Times, Walmart has agreed to buy movie service Vudu.  Vudu is a 3 year old start up founded by industry veterans from companies like TiVo, WebTV, and OpenTV, to name a few.  It had deals with major studios bringing the ability to purchase or rent over 5,000 titles through either a stand alone box, or recently embedded into a variety of consumer devices like TVs and DVD players.

While details of the transaction are not known, one can be safe to assume that Wal-Mart is doing it to protect/diversify their DVD sales business.  One site that I came across suggested that Walmart made up nearly 40% of the total $17B DVD market back in 2006 (which I believe was before iTunes sold movies).

Will they be successful?  Time will tell.  With services like Netflix, Blockbuster, and Boxee having a head start, Walmart may have a difficult time differentiating itself in an increasingly crowded market.  I’d bet they will adopt one of their time tested strategies to try to compete: low, low prices.