Wal-Mart hit the adult video industry hard today with their purchase of Vudu Inc. Vudu builds a set-top box for watching movies over the Internet, and also licenses their technology to a variety of other providers (Samsung, Toshiba, LG and Sharp, to name a few) for inclusion in Blu-ray players and other Internet-enabled devices.
One of the advantages Vudu has over their competitors in the video download market (competitors like Netflix, Amazon and Apple) is that they struck a deal with the Adult Video Network (AVN), who offer adult content from providers like Vivid, Hustler and Wicked Pictures. Wal-Mart is obviously not going to be interested in tarnishing their conservative, family-friendly image by getting into bed (so to speak) with pornographers.
Of course the Vudu purchase does give Wal-Mart an immediate entry point into a market place that is going to rapidly eat into DVD and Blu-ray sales at their retail stores, and it gives Vudu access to the retail giant's unprecedented marketing power and customer targeting, so the acquisition makes sense on both sides.
The only question, of course, is where will all the porn go? Does this purchase open the door for another set-top box to come into the market? Maybe TiVo can strike up a deal?