Wal-Mart one of the largest brick-and-mortar retailers is making a major move into the business of selling movies over the Internet.
Wal-Mart announced this Monday its recent agreement to buy Vudu Movie Service, Silicon Valley startup that built high-definition televisions and Blu-ray players.
The price has not been discovered but it seems that the retail giant will pay over $100 million to get into the online movie service. There were other companies such as Best Buy, Amazon.com and Comcast that also expressed its interest to acquire that company.
But how does this acquisition is aligned to Wal-Mart strategy? Does Wal-Mart has started a slowly movement to online business retail?
Well Wal-Mart is the world’s largest retailers of DVDs in the US. However, there is a tendency of customers to prefer an easiest way to rent or acquire movies. Also, we can see a tendency of customers shifting from physical DVDs to watching movies over the internet. In this scenario, Amazon.com and Netflix are starting to gain considerable market share. Apple is another major competitor, selling movies and TV shows alongside music in its iTunes store.
In the other hand, Wal-Mart hasn’t developed a distribution channel or an efficient way to distribute movies to people’s home. The acquisition of Vudu Moving Service will allow Wal-Mart to sell products (televisions and Blu-ray players) with the internet connections. Wal-Mart then could sell its online movies and shows, bypassing their traditional cable or satellite service.
This might be Wal-Mart’s first step to the on-line business, However it is probably that they start using this channel to sell a variety of other products through people’s televisions.
http://www.nytimes.com/2010/02/23/technology/23video.html?ref=technology
No comments:
Post a Comment