Six Questions with Vudu GM Edward Lichty19 Mar, 2011 By: Erik Gruenwedel
In the annals of electronic distribution of Hollywood movies over the Internet into the home, seven-year-old Vudu is a trailblazer. Long before Netflix made streaming a household word, Vudu offered consumers high-definition new-release video-on-demand movies through a proprietary set-top box. Realizing the market needed easier access to digital content instead of another box under the TV, Vudu began licensing its technology as an app to consumer electronics TV manufacturers such as Mitsubishi, Samsung, Sanyo, Sharp, Toshiba and Vizio, in addition to LG Blu-ray Disc players, among myriad other CE devices.
That got the attention of Walmart as it eyed entry into the CE market following the demise of Circuit City. To offer a digital content stream for such devices, Walmart acquired Vudu, and more than 16,000 titles, establishing itself as more than just a packaged-media retailer.
Home Media Magazine caught up with Vudu GM Edward Lichty to find out how operating as a wholly-owned subsidiary of the world’s largest retailer impacts operations, and if it is enough to separate Vudu from the crowded field selling transactional VOD.
HM: With the largest retailer of packaged media in the world as your owner, does that help Vudu facilitate content deals with the studios?
Lichty: We’ve had very positive relationships with the studios from the beginning. They have been fans of the service and supportive of our efforts to bring the best in digital movies to the marketplace. Approaching studios as ‘Walmart’ rather than ‘the startup’ tends to help keep conversations moving, and it doesn’t hurt our negotiating position.
HM: With the transactional video-on-demand market adding new players on a regular basis, how does Vudu separate itself from the pack?
Lichty: Vudu provides a best-in-class user experience, with an unmatched new-release collection, the most movies available streaming in HD and the highest level of streaming quality in the market — 1080p with Dolby Digital Plus 5.1 Surround Sound. We also offer great values, including a 99-cent movie every day and thousands of titles available for $2 for two nights. We’re proud to share that the Vudu movie service is now available on more than 300 different CE devices, which is greater than any other pay-per-view service and second only to Netflix within the VOD category. Devices include connected HDTVs, Blu-ray players plus the Sony PlayStation 3, Boxee Box, and growing. Our goal is to make the service available on as many devices as possible so that customers can access Vudu’s best-in-class streaming from on whatever device they want, wherever they are.
HM: Will Vudu bow subscription streaming similar to Netflix and Amazon?
Lichty: We continue to look at every option possible to provide value for our users.
HM: Does Walmart bundle digital access via Vudu with packaged media?
Lichty: Clearly, leveraging Walmart’s leadership in the sale of physical media is a great opportunity for us. We’ve worked with our studio partners to deliver digital copies on Vudu included with their purchase of physical DVDs or Blu-rays. We’ve also offered Vudu Movie Credits with purchases. For example, when you purchase the physical copy of Toy Story 3 in stores, you also receive the digital copy on Vudu. Also, when you purchase the physical copy of The Twilight Saga: Eclipse at Walmart, you received a $5 dollar credit on Vudu. You will see similar offers in the future, as we believe they provide great customer value and are a great way to introduce movie-lovers to our service.
HM: Can digital copy shore up physical sellthrough?
Lichty: We’re happy to offer our customers both the best selection and values in physical DVD and Blu-rays and the best quality, selection and value in digital video-on-demand, through Vudu. By offering digital copies at no additional charge when they purchase physical media, we help introduce customers to digital media in a risk-free way. We see this as beneficial on both the physical and digital side, but most importantly, it’s a great value to our customers. Offering great value always helps sellthrough.
HM: Is an app paramount to establishing a stronger presence in consumer electronics?
Lichty: As more and more customers bring connected devices into their living rooms, they expect to access all the entertainment options from the comfort of their couches. Increasingly, they also want access to those options outside the living room as well. Vudu has a strong presence in consumer electronics as an embedded service, through partnerships with all the major CE manufacturers and presence on more than 300 SKUs. We intend to continue to expand that presence, which includes expansion to mobile devices.