Wal-Mart Taking on Netflix, Blockbuster
NEW YORK (
) --
Wal-Mart
(WMT) - Get Walmart Inc. Report
is stepping up the competition in the movie rental business with the acquisition of
Vudu
.
The retail giant announced on Monday that it is buying Vudu, an online movie service that is built into high-definition television and Blu-ray players, according to the
New York Times
.
The terms of the agreement were not revealed.
While Wal-Mart has been the largest seller of DVDs, with this acquisition it is now encroaching on the domain of
Netflix
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and
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Blockbuster
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.
Netflix has become the golden child of the DVD rental/streaming business, as it continues to steal market share away from traditional movie-rental retailers like Blockbuster.
Last week, Blockbuster said it is attempting to cut its overall number of stores, and the amount it pays in rent for those stores. Standard & Poor's cut its rating on the company to deeply distressed, and said Blockbuster is vulnerable to debt default.
Still, shares of Blockbuster are recovering this week, up 7% to 40 cents in afternoon trading.
Shares of Netflix are falling 2.8% to $64.84 on the news.
There has also been increasing competition from
Coinstar's
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Redbox kiosks.
The purchase of Vudu may also present Wal-Mart with the opportunity to sell other products through televisions in the future.
-- Reported by Jeanine Poggi in New York.
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