For a long time, the holy grail of the home movie industry has been true video on demand; the ability to pick what you want to watch, when you want to watch it and have it instantly without having to move from the body cradling comfort of your old worn out couch. Many have tried to give consumers this kind of control over their programming choices, many have come up with partial solutions, many have come close but none have fully succeeded in making the dream possible, yet. A solution providing deep depth of available content and instantaneous delivery to the TV (not the PC) hasn’t been done. Vudu, a well funded startup, announced in April to much fanfare that they’d figured out how to do it. Today, they reveal their efforts. Today, Vudu officially launches.
Vudu is built around a $399 set-top box with a 250GB hard drive and your high speed Internet connection. The first few seconds (or minutes) of every movie in their library is preloaded onto each box. When you press one of the buttons on the stylish remote, the system calls out to Vudu’s servers, your neighbors or any customer with your desired title recorded, and begins to download the missing data. You watch the buffered content as it continues to download and record the rest or store it on the drive to watch later. Essentially, it’s like a big streaming peer to peer network.
You can rent or buy the movies you choose at prices ranging from 99c to $3.99 for rentals and $4.99 to $19.99 to buy. All titles will initially be sold as standard definition video but down the road, once licensing deals are struck, the box is capable of supporting HD (It’s even potentially capable of “upconverting” the programming signals).
All of the major Hollywood studios from Lionsgate to Paramount, Universal, Sony, from Paramount to 20th Century Fox have signed deals. Approximately 5,000 titles will be available to start.
Will Vudu catch on and be a hit? That’s hard to handicap. The novelty of what Vudu is offering is more evolutionary than revolutionary. They’ve pushed things forward, unquestionably. But it is the nature of the evolution to spotlight not only just how close the market had already gotten to a comprehensive V.O.D offering but how crowded its become as the "almosts," "not quites" and "slightly differents" litter the landscape. Lining up against Vudu are a litany of adversaries.
In one camp there’s Microsoft’s Xbox Live environment (which is rental only and still somewhat limited in title volume outside of its gaming focus). Then there’s Amazon and TiVo’s straight to TV “UnBox” service. Blockbuster and Netflix are in the mix with expanding on-demand rental offerings (and their mail order businesses which, while not on-demand, compete for the same audience and leisure spending). There are IPTV companies (Joost, Veoh etc) and other Internet video services which compete for users leisure time. There are DVRs which let consumer’s record shows to watch later, and reducing the urgency of an on-demand solution. Then, lastly, there are the cable and satellite providers like Comcast and DirecTV which offer a constant stream of pay-per-view programs. These may not be the truest form of on-demand, the list of titles may be limited, and the broadcast times may be fixed, still there’s plenty there to satisfy the craving for an instant Hollywood movie-magic escape.
So, however advanced and impressive Vudu’s offering, there’s a lot of competition to contend with. Additionally, the company will also have to address concerns about bandwidth hogging (primarily for houses with multiple residents sharing the same Internet connection. Kids watching a movie in one room, parent trying to work online in the other…trouble?). And then there is the biggest on the list of hurdles: price. $399 is a pricey down payment on a piece of hardware for a movie service that requires added payments for content, especially for those who already own a set top DVR, a DVD player and are paying a monthly fee for satellite or cable TV service.
Will there be enough demand for this kind of on-demand? Will customers scoff at the price and see this as just another piece of hardware or will Vudu’s voodoo be magical enough to stoke gadget lust and define Vudu’s player as a “must have” product? It’s a crap shoot. It’s hard to put a finger on the pulse of consumer interest for this.
In April, Vudu’s founder Tony Miranz told the New York Times that the player was "going to alter the landscape." Steve Jobs was similarly optimistic revealing Apple TV but that hasn’t been the category-defining product Apple hoped it would be. Relative to its hype, it’s arguably been a failure. Will Vudu fare better or follow suit?
I’m not sure what the answer to those questions is. Benchmark Capital and Greylock, two highly regarded venture funds have provided the company with sound financial backing. They’ve hired a staff of experts with vast industry experience at companies like TiVo. Now, it’ll be up to the customer’s to reach a verdict. It will be interesting to see; and the show begins today. The site is live and products will ship by October 1.