Walmart's Vudu takes #3 spot in digital movies

Vudu climbs in digital movie downloads market share

There are quite a few players in the running for the lead digital movie service, but when it comes to actual digital downloads (purchases, not streaming rentals, a la Netflix), an interesting newcomer has snagged the spot for third place: none other than Walmart’s Vudu.  The news comes from research organization HIS Inc., and the Wall Street Journal was the first to report on it.

Walmart acquired Vudu in February 2010 for a reported $100 million, but until now, the service has been operating independently.  But now, Vudu will be available to a new swath of users with the official Walmart name behind it.  Walmart announced its debut in the digital movie streaming/download space last month when it integrated Vudu.  As far as new releases are concerned, you can rent a streaming movie for 24-48 hours for anywhere from $3.99 to $5.99.  The prices reflect the streaming quality, so for $3.99, you can get standard definition for PCs, Macs, and non-HD TVs; for $4.99, you can get HD quality; and for $5.99, you can get HDX.  The same movies can be purchased as a download for $14.99 to $19.99.

Did the Walmart integration help Vudu’s numbers?  Without a doubt.  IHS looked at digital movie downloading services in the first half of 2011 and compared them with the same services in the first half of 2010.  Vudu’s market share jumped to 5.3% in the first half of 2011, compared with only 1% in the first half of 2010, putting it ahead of competing services from the Sony PlayStation Store and Amazon. 

It still falls short of the prize, but the competition is steep.  Apple’s iTunes dominates the market with 65.8%, while Microsoft’s Zune comes in at a distant second with 16.2% of the market.  So it isn’t exactly a race that’s going to be won by a hair’s breadth.

While a company representative for Vudu would not disclose how many customers the service currently has, she did say that Vudu’s customer base has been growing dramatically—tripling since December.

Image source: WSJ.com