Some of you may remember back in 2005 when retail giant Walmart stopped its struggling effort in online DVD rentals with the excuse that they wanted to concentrate on DVD sales. Rival and category creator NetFlix absorbed its operations and both went on their merry ways.
Fast forward five years and now comes news that Wal-Mart has purchased Vudu , an online high definition streaming service with over 16,000 movies in its library. Published reports say that the deal will close in the next several weeks.
This purchase comes at a time when video rental stores are going the way of the dinosaur and reflects the changing behavior of customers who want the convenience of on-demand movies via their TVs or set-top boxes. The deal is also a huge threat to NetFlix, who also offers a streaming service to their customers but their library is mostly older selections with only a small percentage offered in HD. With Walmart’s retail savvy and reach, the concept of streaming movies will get much more exposure to mainstream consumers and Vudu will surely become a household name.
Perhaps the only stumbling block is that 40% of homes are still without broadband, according to the Department of Commerce.