How Walmart was first to Video on Demand but is being dominated by Amazon and Netflix

Greg S

TS Evangelist

Back in 2007 when Netflix was only offering DVDs by mail and Prime Video did not afford free content to members, Walmart held a unique position in the beginnings of streaming. Walmart's Vudu service had plans to change the movie-watching experience at home with a library of around 5,000 films.

Why and how did Netflix and Amazon back Vudu into a small corner of the market? Despite the fact that Walmart has influence to ensure that Vudu is supported on game consoles, smart TVs, Blu-ray players and nearly any device you can think of, consumers were not acting in accordance with Walmart's business strategy.

Vudu has focused on allowing movies to be rented or purchased instead of a monthly subscription cost for unlimited access. As it turned out, DVD sales in stores continued to decline and consumers were not all that interested in buying movies in digital form, either.

The rise of binge-watching is ultimately responsible for the majority of Vudu's struggles. Netflix users watch around 25 hours a month of content compared to just 1.9 hours on Vudu. Prime Video users now watch approximately 13.75 hours monthly.

Netflix and Amazon put the final nail in the coffin for Vudu with the introduction of original series. Major release movies on Vudu cost more than a month's subscription fee to either Netflix or Amazon Prime but only offer around two hours of entertainment. Quality content with seasons that can take several days to binge-watch provide a much better value than paying for a movie every time the TV is turned on.

Although Vudu is not exactly the household name that Netflix and Amazon are, it is not a dead service. In 2016, Vudu began offering select movies with ads in them for free. This resulted in a 56 percent growth in viewership. Over the past year, the number of hours of content watched has nearly quadrupled.

The market for streaming is expected to reach $84 billion by 2022, tremendous growth from the $35 billion market cap in 2017. Average households are now using between three and four streaming services. Netflix, Amazon Video, Hulu and YouTube hold the top positions with no signs of wavering from their dominant rankings.

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TS Evangelist
Vudu, Crackle, Tubi, and Pluto are the best free streaming platforms in my opinion. Like what hulu was in the beginning, normal tv, no subscription, watch ads to support it. Vudu has a good movies selection, crackle has a nice mix of tv and movies (mostly sony stuff since sony owns crackle) and pluto is more like a internet tv provider (like sling tv). I think Vudu will survive if they keep doing the movies on us program, but it they can branch out like crackle did and do there own shows, and then use walmarts advertising power to let people know about it, they should stick around for awhile.


TS Guru
I used Vudu in 2007 (freshman year of college). At that time Netflix was not yet in the streaming business. Even when they started streaming it was strictly limited (2 hours for basic plans and ramping up as necessary).

Vudu was an interesting platform that gave something nobody else did. A huge problem for me was the software -- which was terrible -- and also the relatively slow broadband speeds. Iirc, I had to download the entire movie prior to watching. There was no streaming (I remember being pretty happy with Netflix allowing me to stream an entire 480p movie!).

Vudu never made a hard push to gain a fanbase or take risky licensing agreements. They stayed small (and likely profitable) while other places took big risks. Risks that paid off.


TS Guru
It's also really important to keep in mind there were plenty of people who thought Netflix would fall on it's face when it started creating original content. Many people thought it would result in B-rated TV shows with no added value and essentially bloat Netflix for no good reason.

In reality, their original content, some amazing, some bad, has made them unique and one of the biggest forces in the industry. Other places (like Amazon and Hulu) have tried to copy their formula with limited success.


TS Rookie
You realize that Walmart didn't even purchase Vudu until 2010, right? So, it's not really relevant to discuss 2007 with respect to Walmart's digital video streaming options.