Wal-Mart takes video to the iPad

11 August 2011

BENTONVILLE: Wal-Mart, the retail giant, is launching its fledgling online video service, Vudu, on Apple's iPad, in a sign of the company's changing priorities and evolving consumer habits.

Vudu was already compatible with over 300 devices, from web-connected TV sets to Blu-Ray players and the PlayStation3, Sony's games console, but the iPad is seen as a key growth market for video.

Edward Lichty, Vudu's general manager, told the Financial Times: "We want Vudu to be available anywhere and everywhere people want to consume media."

Users visiting Vudu's website from the iPad can now purchase or rent 20,000 films and TV shows, with Wal-Mart opting against using an app as Apple takes a set proportion of all sales made via this route.

"It's not an app. It's an all-browser experience. But you access it in a similar way," said Lichty. "The economic advantage of not having to pay Apple 30% was a factor [in choosing this model]."

Lichty revealed licensing deals had been agreed with almost "all major" Hollywood studios, as well as several independent movie groups and TV production houses.

Wal-Mart did not release exact figures about Vudu's audience and revenue levels but stated both totals had trebled in 2011, as competition with rivals like Netflix, Apple's iTunes, Microsoft's Zune and Amazon Instant Video intensifies.

Alongside linking Vudu more closely with Walmart.com, Wal-Mart also plans to promote the video site's availability on the iPad in its stores and through various other touchpoints.

One motivation for attempting to increase growth in this area is declining sales of DVDs, a category where Wal-Mart held a 40% share in the US last year, according to estimates from IHS Screen Digest, the research firm.

"Wal-Mart's choice is between staying in a shrinking packaged DVD market or getting into a growing digital one, so it makes sense to go digital," Tom Adams, principal US analyst at IHS Screen Digest, said.

"The iPad will be more attractive with a groovy service like Vudu."

However, the difficulties of succeeding in this space were shown by the fact Wal-Mart is to close its online music store - launched in 2003, the same year as iTunes - at the end of August.

Data sourced from Financial Times, Reuters, CNET; additional content by Warc staff