updated 11:00 am EST, Tue January 12, 2010
VUDU in talks with a key buyer
Walmart could be on the cusp of buying VUDU, a leak this morning hints. Insiders claim VUDU is in "meaningful" talks to be purchased by a larger company, which many within the field believe will be Walmart. The young movie service provider is reported by MediaMemo as having courted possible buyouts from electronics makers and retailers but to have met little success until now.
VUDU originally tried competing in hardware with the VUDU Box and still offers it today but has shifted most of its attention to licensing deals with major electronics manufacturers, including most recently VIZIO for its TVs. Its key advantage has been its early move to HD and the development of HDX, a compression format that provides 1080p and surround sound without consuming more bandwidth than most typical broadband connections.
Networked media hubs as a whole have yet to catch on, as even larger companies like Apple and Netgear haven't encountered runaway sales of the devices. Content providers like Amazon and Netflix have often preferred to land deals with established companies like LG and TiVo rather than partner with newcomers to home theater equipment.
For Walmart, a possible purchase could signal a return to its abortive video download efforts. It launched a Video Downloads service in 2007 but closed it the same year after poor performance compared to iTunes and others persuaded it to exit the market.
Neither of the involved companies has acknowledged the talks.