I’m sorry, I couldn’t resist the headline. The real news, however, is that Walmart appears poised to change the market for DVD rentals. Clearly when it has more profit than it knows what do about, ruling the world seems like a reasonable business strategy.
Sources tell me Web video start-up Vudu is in “meaningful” acquisition discussions, and industry executives believe Wal-Mart is the likely buyer.
Vudu executives declined to comment. I’ve lobbed a call into the Wal-Mart press center but haven’t heard back.
It’s a deal that makes some sense on paper: Vudu is one of many services that give consumers a chance to rent or buy movies over the Web, but it hasn’t gotten much traction. “It’s a beautiful product and a really great service, in need of distribution,” says a person familiar with the company.
And Wal-Mart has tried video delivery twice before but backed away each time. Acquiring a tech team at the right price could help it make a third effort.
After trying for two years to compete with Netflix’s DVD-by-mail business, Wal-Mart gave up in 2005 and agreed to send its customers directly to Netflix. In 2007, with the backing of all the big studios and tech help from Hewlett-Packard, the retailer tried to launch a download service, a la Apple’s iTunes. But it abandoned that effort in less than a year.
Oh, and by the way, a few months ago, Uncle Bob, in a Walmart Wednesday comment, asked why we weren’t writing about Walmart’s tentacles probing the mobile phone market. The story this morning is that Walmart and Sprint may team to dominate the 4g market by using Walmart stores as cell locations.
Why not indeed.