Online Home Video Delivery – Who Will Win? Part 6 – Vudu

By David Walker | February 5th, 2008

No matter what technologies come along, our fascination with television shows and movies is virtually endless. Whether it’s the acting, stories or visual eye candy that grabs us, there’s no denying that we’re as fascinated with video as we’ve ever been. As we enter 2008, the ability to get to that video is becomingly increasingly easier. Several key players are entering the online video delivery marketplace and though choice is growing, it’s going to be important that consumers pick the provider that suits them best and that has the best long-term potential to get them the content they crave. Over the next few days, we’ll be taking a look at the major players, what their capabilities are and ultimately, who we think has the best shot of winning in this space. Today, we take a look at Vudu.

What They Have
Vudu’s entire existence is defined by online home video delivery. They were one of the first companies to pursue this market and produce a device capable of bringing online video straight to the living room. Having recently dropped the price of their box to $295 has put the Vudu in better competitive position, although it is still a more expensive option. The Vudu box is capable of doing 1080p24 HD video and the service has recently started offering HD rentals. The service lets you either purchase or rent television shows and movies, depending on the studio.

Advantages
For starters, Vudu actually has a device released and working – unlike the delayed update to the AppleTV. The box is also more capable, featuring a 250GB hard drive and 1080p support. The box also has USB ports for expanding storage, should that be a necessity.

On the content front, Vudu is also setup pretty well. They’ve got the support of all the major studios and they’ve been getting new releases as soon as day-and-date with the DVD release, although some releases take a few days. They also have deals with smaller, independent studios and with a library of almost 5,000 movies, they have one of the more impressive libraries available right now. A quick glance at the movies they have available reveals that they’re not just a minor player in this game.

Disadvantages
Vudu, unfortunately, is now in a head-to-head battle with Apple and the soon to be released AppleTV update. Even though the AppleTV is much weaker in specs than the Vudu, the $295 price tag stings, especially when compared to the $229 price of the entry level AppleTV. It’s not a huge difference, but the psychological difference between those two prices is significant.

Also, even though the Vudu box features some pretty decent specs, all it currently handles is online video. It doesn’t do music or pictures or video from sites like YouTube. Whether these are important or not will be fleshed out in the coming months, but considering their prime competition does all these things – and does them well – you’d have to consider this a tactical disadvantage.

Finally, whereas companies like Microsoft, Apple and even TiVo have established brands to build off of, Vudu is a relatively new company that people just don’t know much about. Customers are hesitant to invest in technology that might not be supported in 5 years or even 5 months. Even though they’re the ones cutting their teeth in this space, their lack of brand-awareness is definitely working against them.

Outlook
Vudu, of all the companies covered so far, probably has the best option currently available for getting online video to the home. They have the most studio support, pretty decent hardware and a simple enough interface for most users to use. On paper, Vudu looks like a sure-fire winner. Unfortunately, superior position and technology don’t always mean victory. With Apple looming around the corner and Microsoft making a steady push into this space, Vudu is the proverbial David. Unlike the Bible story, though, there appears to be more than just one Goliath to face – and that may end up being too much for this new company. However, until Apple actually releases the AppleTV update, Vudu is one of the main owners of this space. Should Apple stumble – and their 2 to 3 week delay of the AppleTV update lends that credence – Vudu may yet find a way to stave off the Goliath. And as we all know, David eventually went on to become the King.

Previous Articles:
Part 1: Apple
Part 2: Microsoft
Part 3: Sony
Part 4: Netflix
Part 5: TiVo