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Wal-Mart Showing Progress in Digital Distribution

Wal-Mart Showing Progress in Digital Distribution

Almost a year ago today, Wal-Mart acquired digital video on-demand service Vudu. In that short amount of time, the retail corporation has rolled the Vudu service (which allows consumers a hi-def way to rent or buy movies) onto hardware devices and away from its first incarnation, which was a standalone set-top box. This acquisition was a clever move, because Vudu was in need of some scale and Wal-Mart was in need of a quality digital store. Based on data from IHS Screen Digest, Wal-Mart may be on its way to successfully penetrating an online transactional-VOD landscape dominated by Apple’s iTunes:

IHS analyst Arash Amel forecasts that iTunes will see someone else gaining speed in the rearview mirror this year. “The most fearsome rival for iTunes in the future could be a giant company that was only a small player in 2010: Wal-Mart,” he writes, citing the emergence of Vudu in the last quarter of the year.

“The future of the online movie business may come down to competitive battle between Apple and Wal-Mart,” Amel said. “Although Wal-Mart is not on the charts yet, the company soon will become a major player if its current momentum continues.”

Amel is absolutely correct that Vudu is a real comer, but to reduce this to a two-service race this early in the game may be premature.

What paidContent means, is that Microsoft’s XBox and Sony’s Playstation are major forces in the t-VOD landscape because they have millions of subscribers (mostly gamers) with access to their movie stores. This growth is a good thing for the film and TV business, but we also have to determine how a growing t-VOD industry can live peacefully alongside a growing subscription-VOD industry (Netflix, Hulu Plus). The best outcome: they all co-exist, just like HBO can co-exist with Cable VOD, and Showtime can co-exist with TNT.

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