Wal-Mart (WMT)
Wal-Mart just announced that it will acquire the Santa Clara based company, VUDU. Now, most people have never heard of VUDU, nonetheless know what the company actually does. However, media provider juggernauts such as Apple (AAPL: Charts, News, Offers), Amazon (AMZN: Charts, News, Offers), and Netflix (NFLX: Charts, News, Offers) are well aware of VUDU’s services, and are probably not too thrilled about Wal-Mart’s announcement. VUDU is a digital media service that allows users to buy and rent movies via the internet. The VUDU purchase has made it official- Wal-Mart is in the business of online media. The questions is: why is Wal-Mart so eager to enter such a competitive market?
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Stock Analysis
The online media business is just simply to lucrative to pass up. Wal-Mart realizes that the future of home entertainment is digital. It has already seen the impact of the online trend with its dwindling in-store DVD and CD sales. If Wal-Mart wants to stay a relevant player in the media entertainment industry, it needs to provide some sort of digital media offering. Besides, Wal-Mart has the scope, money, and buyer influence to break into such a competitive market. Although there are risks, it was a fairly easy decision for Wal-Mart to make. Wal-Mart understands that it is just too big of an opportunity to miss. Wal-Mart has acquired the necessary technology to compete in the online media market, but what makes it any different than the other services?
It is too early to speculate on the details of Wal-Mart’s final VUDU offering, but it does have a big advantage from an operations standpoint. Wal-Mart is a leading retailer in TV sets, DVD players, and other entertainment devices. As a result, it is in a position to push VUDU software bundled products to consumers. Its retail influence and distribution power have the ability to increase VUDU popularity and market share at very rapid pace. The magnitude of Wal-Mart’s consumer reach has the potential to propel it to the top of the digital media industry.
Overall, it appears that Wal-Mart is heading in the right direction. Wal-Mart does not want to miss out on the online media trend, and is preparing to make a strong push into that market. The VUDU acquisition seems to be the missing piece that Wal-Mart has been looking for. Now, the retail super store needs to finalize its strategy for bringing the VUDU software to market. Wal-Mart will probably rely heavily on its distribution power to build VUDU market share. However, it will not be an easy task. Wal-Mart is facing some stiff competition from Apple and Netflix, but it is hoping to “fast-forward” past the opposition.
More news about Wal-Mart:
- Wal-Mart to Expand; Other Retailers Wary — Wal-Mart sees opportunity in Canada, and is looking to expand rapidly. How does Canada feels about this?
- It’s Getting Harder to Hate Wal-Mart– This blogger thinks that Wal-Mart may be winning favor in the court of public opinion with its new organic vegetables offering.
Other stocks in the news:
- Toyota’s President to Offer “Full Responsibility” — Toyota’s (TM: Charts, News, Offers) president looks to calm the media with his appearance before the House committee today.
- Apple Names “Outsider” to Serve as Co-Lead Director– Apple (AAPL: Charts, News, Offers) is very excited about its newsiest board member. Find out why.
- Italy Convicts Google Execs over Uploaded Video — The Italian government finds Google (GOOG: Charts, News, Offers) at fault for a controversial video submission even after it was removed hours later. What exactly happened?
