The Atlanta Journal-Constitution
As Netflix, Amazon soar, Walmart’s Vudu struggles
Walmart has a vast arsenal at its disposal in its battle with Amazon.com: stores, trucks, warehouses, even a blockchain-enabled supply chain of fruits and vegetables.
But there’s one weapon it’s barely deployed: Vudu, the video-on-demand service it bought eight years ago. Back then, Netflix was available only in the U.S. and Canada, Amazon was still a year away from offering free videos for its Prime members and Apple had just released its first iPad. With a library of 5,000 films from all the big studios available at the press of a button, Vudu promised to “revolutionize” the home-movie experience when it debuted in 2007.
It hasn’t worked out that way. As its competitors flourished, Vudu languished. Even though it’s pre-loaded in or can be downloaded to hundreds of millions of smart TVs, Blu-ray devices and video-game consoles — thanks to Walmart’s enormous clout with electronics makers such as Sony and Samsung — users spend just 1.9 hours a month on the platform, according to data tracker comScore. This compares with the 25 hours a month subscribers spend on Netflix.
“People are renting and buying less because they are binge-watching more,” said Colin Dixon, founder of industry analyst firm nScreenMedia. “That’s not good for Vudu, which is far, far behind the leaders.”
Vudu gave Walmart digital cred, but the primary rationale for the 2010 deal was to provide insurance against declining in-store
sales of DVDs. Walmart bet that video buffs would continue to buy and rent loads of movies — they’d just move their titles to a digital shelf, or library, that Vudu would create and maintain for them.
While Walmart sits on the streaming sidelines, the competition is moving on. Netflix’s subscription-based approach — featuring cutting-edge, exclusive content such as “House of Cards” and “Stranger Things” — has been on a global-growth tear. Amazon’s spending billions on its own programming to catch up while offering hit shows from HBO and Showtime. And Disney is planning its own streaming service, which will debut in 2019.
All told, there are more than 200 over-the-top video services, so called because they bypass cable providers and stream content directly to a TV, laptop, phone
or game console.
Vudu hasn’t been completely idle. It holds Twitter-based “viewing parties” where users can interact with other fans online and win prizes, like the one it held for “Jumanji: Welcome to the Jungle” earlier this month. And Walmart will convert your old discs into digital copies, for a fee, and house them in your Vudu library.
Walmart would do best by becoming an exclusive destination for light, family-friendly fare alongside a partner like the Hallmark Channel or Discovery Co.’s Scripps Network, according to Forrester Research analyst James McQuivey. That’s because, he said, most original content is of the R-rated variety for adult viewers.
“There is a gap in the original content-market, and Walmart is most definitely the company that could fill it,” McQuivey said.