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Bloomberg has a story about Walmart’s ownership of the Vudu video-on-demand service, which should be a potent weapon in its battle against the Amazon ecosystem - except that it has owned it for eight years, and users spend an average of just 1.9 hours a month on the platform, compared to 25 hours a month on Netflix.

“With a library of 5,000 films from all the big studios available at the
press of a button,” Bloomberg writes, “Vudu promised to ‘revolutionize’ the home-movie experience when it debuted in 2007. It hasn’t worked out that way.”

The story notes that the Vudu acquisition was designed to give “Walmart digital cred, but the primary rationale for the 2010 deal was to provide insurance against declining in-store sales of DVDs. Walmart bet that video buffs would continue to buy and rent loads of movies -- they’d just move their titles to a digital shelf, or library, that Vudu would create and maintain for them.”

But the problem is that for “Walmart to seriously compete, it would have to devote resources -- both creative and financial -- toward providing original Walmart-branded content as Netflix, Amazon and Hulu have all done.”
KC's View:
There is a difference between using a video-on-demand service as “insurance” and being aggressive about using it as a differential advantage. The latter requires tangible and intangible investments, which Walmart appears not to have made. As part of my work, I tend to watch a fair number of movies online, and Vudu is worse than an afterthought - it is a never-thought.

As much as Walmart/Jet wants to find ways to compete more effectively and comprehensively with Amazon, it always has been hard for me to imagine the Bentonville Behemoth getting into the original/proprietary content business to the degree that Amazon has. Can you imagine Walmart bidding for NFL streaming rights?

This illustrates a key difference between Amazon and Walmart. Walmart is a retailer. Amazon is building an ecosystem. There is an argument, I suppose, for either approach, but they are fundamentally different ways of looking at the business.