Interviews with Digital Media Thought Leaders

Vudu Takes Internet Video to the TV

Podcast Audio | Posted by Phil Leigh on December 29, 2008

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Edward Lichty, Executive Vice President, Vudu

If you would like to learn about an appliance that permits users to access limited Internet Video content, including movie rentals, for viewing on the TV, this interview is for you.

Our guest today is Edward Lichty who is the Executive Vice President of Vudu. His company manufactures a $300 appliance enabling consumers to get limited Internet Video on their TVs. Although there are limitations on the content available, set-up is said to be relatively simple. While Vudu normally uses WiFi to access the Internet, dongles are provided that claim to offer “plug-and-play” simplicity. One attaches to the Vudu unit and the other to the router normally used in a home network. If the user does not already have a router, she will have to buy one in addition to the Vudu appliance. Compared to other appliances, Vudu is an attractive unit because it uses P2P technology, network optimization, and pre-caching of content in order to enable users to begin the viewing experience promptly. There is no requirement to wait for a long download.

Presently, the catalog of available content is heavily weighted toward movies which may be rented or purchased. Recently-released motion pictures are normally available for purchase at the time they are also released for DVD distribution. The waiting period for rentals is longer because the studios want to maximize revenues by first offering them for sale and later offering them as rentals.

Currently, Vudu has about 11,000 movies in its catalog. Rentals for standard definition are $4 while HD movies can be rented for $6. Purchased movies are $20.

In December the company announced two noteworthy initiatives. First, it now provides access to free Internet Video at YouTube. Second, the company launched a platform permitting developers to offer services via Vudu. It is much like the Apps Store at Apple for the iPhone. One, hypothetical, example of an app that could be attractive on Vudu would be access to the Internet Movie Database at www.imdb.com. Access to IMDB would permit Vudu users to investigate movies they might want to watch before making a selection.

The fundamental advantage of Vudu and other similar appliances is that they are (supposedly) “plug-and-play”. The disadvantage is that they provide only limited access to Internet Video. In our analysis, the “Walled Garden” of content provided by such appliance makers will ultimately be considered as a “Walled Prison” that consumers will eventually want to escape.

One way to escape the “Walled Prison” is to attach a laptop computer to an HD television and use the computer as a media controller. Most modern laptops have built-in WiFi and many have HDMI jacks that can plug directly into flat panel TVs. It is estimated that over one-third of U.S. households presently have at least one flat panel TV.