July 27, 2011

Walmart Launches Video Streaming Service

Walmart unveiled its new streaming video service on Tuesday, which will offer customers the ability to purchase or rent movies over its website at Walmart.com.

Walmart, which acquired video-streaming service Vudu.com 18 months ago, said the new service now offers some 20,000 titles that can be viewed on almost any device with Internet access.

Many titles will be available the same day as they come out on DVD, the Bentonville, AR-based company said.

"Walmart today announced the integration of its popular movie streaming service, VUDU, on Walmart.com," said the world's largest retailer in a statement.

"Customers can now shop for thousands of digital VUDU titles, including the hottest new releases, and purchase and/or rent them directly on Walmart.com at www.walmart.com/vudu."

Movies can be rented for $1 to $5.99, or purchased for $4.99 and up.  However, Walmart is not offering subscriptions, making its service more akin to that provided by Apple Inc.'s iTunes, which charges $3.99 to rent newly released titles and $14.99 to purchase a movie.

As customers shop for movies at Walmart.com, they will have the option to select the digital VUDU title and/or the physical title on DVD or Blu-ray Disc. Those who select the digital title can complete their transaction through Walmart.com's checkout, and then easily stream the movie directly from Walmart.com, VUDU.com, or from one of more than 300 VUDU-enabled devices, including select HDTVs, Blu-ray Disc players and the PlayStation®3.

"This integration allows us to introduce more Walmart.com customers to digital entertainment and give them access to thousands of new release and popular movie titles immediately through VUDU's high-quality streaming service," said Edward Lichty, general manager, VUDU.

"By incorporating digital movie content into the Walmart.com entertainment shopping experience, we're enabling customers to easily choose how they want to enjoy their entertainment content "“ whether that be through a physical DVD, digital streaming or both."

The move represents Walmart's second bid for a part of Netflix Inc.'s business, having previously offered a DVD-by-mail service that cost $12.97 per month for two titles and $17.36 per month for three titles.

However, it ceded that program to Netflix in early 2010, allowing customers to continue their subscriptions with Netflix without a rate increase.

The launch of Walmart's new service comes just two weeks after Netflix announced new price increases for the second time in eight months. 

Netflix said it would raise rates and charge separately for streaming and rental DVDs. The increases could mean a price hike of up to 60 percent for some existing customers, beginning Sept. 1. 

New subscribers will be required to pay the new prices immediately.

As of March, Los Gatos, Calif.-based Netflix had 22.8 million U.S. subscribers, some of which have complained loudly on various social media sites over Netflix's latest price increases. 

Company executives say the reaction is not unanticipated.  However,  Netflix's willingness to risk alienating their subscribers is an indication it may require additional revenue to cover rising costs.

Hulu.com, another provider of streaming movies and TV shows, now sells its premium service for $7.99 a month, which offers more back-season shows and movies.  Without a subscription, viewers can see shows and movies at no cost in exchange for watching advertising.

Walmart said its new streaming video service is part of the company's drive to expand its digital offerings.

"At Walmart, one of our key priorities is to provide a continuous channel for our customers, from our stores to our powerful e-commerce and social media platforms," said Steve Nave, Senior Vice President and general manager of Walmart.com.

"With VUDU becoming increasingly popular among our customers, we're providing them more access to enjoy this digital entertainment experience directly online at Walmart.com."