BENTONVILLE, Ark.—Retailer Wal-Mart, which announced Monday its intent to purchase online movie provider VUDU in a deal whose details remain secret, has indicated that it will discontinue adult programming on the service. Currently, VUDU offers adult movies on the AVN “After Dark” channel.
*Update* The Wall Street Journal has since reported that unnamed sources have pegged the deal at"slightly more than" $100 million.
An announcement posted late Monday to Wal-Mart’s website announced its intention to buy VUDU.
“VUDU is a revolutionary service, built into a growing number of broadband-ready TVs and Blu-ray players, that delivers instant access to thousands of movies and TV shows directly through the television,” the retailer said. “Customers with broadband Internet access and an Internet-ready TV or Blu-ray player can rent or purchase movies, typically in high-definition, without needing a connected computer or cable/satellite service.”
As of Monday morning, unnamed sources had already leaked the news that Hollywood studios were in the process of being informed about the change in ownership, but the question remained whether Wal-Mart was going to keep the adult channel. Some thought it might; most thought it would not. The mystery was soon cleared up.
A VUDU spokesperson confirmed to AVN that Wal-Mart would no longer offer adult programming on the service and that customers who had bought adult movies, as opposed to renting them, would have those purchases automatically refunded. No calls to VUDU (or Wal-Mart) are necessary, the spokesperson said.
“We’ve enjoyed working with VUDU over the past two years in the development of an online service that offers the highest-quality entertainment available to fans of adult content,” said AVN CEO Darren Roberts. "We're currently looking at other platforms that are suitable to carry out this vision."
Wednesday, VUDU began emailing adult studios with the news that it is discontinuing adult programming.
"As you may have recently heard, VUDU was acquired by Wal-Mart," the email reads. "In conjunction with this acquisition we will be discontinuing the 'After Dark' adult service over the coming days. Upon completion of the shutdown process, we will settle all accounts with you and ensure that you are paid the full amount you are owed under our existing agreement." The company is also requesting that studios sign a voluntary termination notice.
According to The New York Times, the VUDU deal positions Wal-Mart in a market it needs if it wants to stay competitive in the delivery of mainstream digital content.
“Wal-Mart, based in Bentonville, Ark., is one of the world’s largest retailers of DVDs,” reported the Times. “But it has so far lacked a way to deliver movies digitally to people’s homes—a glaring weakness as consumers shift from renting and buying physical discs to streaming movies over the Internet.”
Wal-Mart has indicated that the deal is expected to be finalized within the next few weeks.
