Wal-Mart buys internet TV biz

Worldwide retail giant Wal-Mart is buying its way into the rapidly expanding sphere of on-demand, internet-based television.

The Bentonville, Arkansas-based destroyer of America's small-town shopping districts has forged a "definitive agreement" to acquire Vudu, the Silicon Valley provider of IPTV hardware and services.

In this case, "hardware" doesn't mean a standalone settop box. Vudu tried that, but gave up earlier this year. What it does provide is the IPTV innards for television sets and Blu-ray boxes from the likes of LG, Mitsubishi, Samsung, Vizio, and others.

In addition, Vudu has agreements with various movie studios - as do competitors Netflix, Amazon, and Apple - to provide their content to Vudu-enabled devices. And now, with the clout of Wal-Mart behind it, expect the relationships with those studios to become much cozier.

Wal-Mart's leverage with TV and Blu-ray manufacturers will undoubtedly mean the migration of Vudu technology into more boxes from more home entertainment device suppliers. The lure of a Vudu-enabled TV or Blu-ray player is that it doesn't require yet another piece of hardware - a complication that competitor Boxee requires with the upcoming D-Link Boxee Box.

Independent IPTV has had a long gestation - witness the bumpy ride of Steve Jobs's "hobby product" pioneer, the Apple TV. But IPTV is now gaining traction, becoming a serious competitor to carrier-based video-on-demand services such as Comcast's Fancast and AT&T's U-verse.

However, as we pointed out last month, internet-connected Blu-Ray players and HDTVs are currently a US-based phenomenon, so don't pop over to your local Wal-Mart-owned ASDA outlet looking for a Vudu-enabled device just yet.

But Wal-Mart's goals have always been international. It may have started out as a humble discount outlet in the American heartland, but it now claims 8,400 "retail units" with 53 brands in 15 countries. And with fiscal-year 2010 revenues of over $400bn, it has plenty of resources to pump Vudu into an IPTV powerhouse. ®

Bootnote

Pedantry alert: Is the Bentonville, Arkansas mega-retailer Wal-Mart or Walmart? The company explains: "Wal-Mart Stores, Inc. is the legal name of the corporation. The name "Walmart," expressed as one word and without punctuation, is a trademark of the company and is used analogously to describe the company and its stores. Use the legal name when it is necessary to identify the legal entity, such as when reporting financial results, SEC filings, litigation or governance matters."

The Reg hopes this explanation will mollify overly fastidious commentards.