Walmart to Purchase VUDU

Parks Associates research indicates U.S. premium video rentals and downloads will grow to $8.4 billion in 2014

(PresseBox) ( Dallas, Texas, )
After abandoning its initial online video plans in late 2007 [http://parksassociates.blogspot.com/2007/12/wal-mart-ends-online-movie-business.html#links], Walmart has returned to this market with the announced acquisition of VUDU [http://walmartstores.com/FactsNews/NewsRoom/9661.aspx] on February 22. With Best Buy working with Roxio CinemaNow, will Walmart leverage the VUDU acquisition to develop its own branded connected CE products?

"Walmart is reentering the OTT (overthetop) market at an opportune time," said Kurt Scherf, Vice President, Principal Analyst, Parks Associates. "Parks Associates' consumer research of online video services indicates that usage from paying users for movie rentals, movie downloads, and TV downloads has doubled between 2008 and 2009."

Parks Associates forecasts that revenues for premium video rentals and downloads in the U.S. will grow from $2.3 billion in 2010 to $8.4 billion in 2014.

Given VUDU's recent efforts to transition from a hardware vendor providing settop boxes to a backend service provider of OTT content for connected CE devices, Parks Associates believes that this acquisition is an opportunity for Walmart to become a "category catalyst" in connected consumer electronics. VUDU currently is working with such CE vendors as LG, Mitsubishi, Samsung, SANYO, Sharp, Toshiba, and VIZIO.

Parks Associates projects that by 2014, more than 40% of transactional revenues for premium online video services will be through connected devices such as connected TVs, Bluray players, game consoles, and networked digital media settop boxes. The presence of Walmart, with its retail muscle now in the online video space, could mean significant growth in the number and availability of Webenabled consumer electronics products.

Parks Associates' current consumer research projects include All Eyes on Video[http://www.parksassociates.com/video/index.htm], Digital Media Evolution II[http://www.parksassociates.com/media/index.htm], and Consumer Decision Process [http://www.parksassociates.com/research/cdp/index.htm].
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