Vudu Acquisition: Key Details, Impact, and What Comes Next

Fandango's acquisition of Vudu from Walmart marks a significant move in the digital streaming industry. This strategic purchase allows Fandango to expand its digital footprint and better compete with major players like Amazon and iTunes. By integrating Vudu's extensive library, Fandango aims to enhance its offerings and solidify its position in the market.

What Is Vudu?

Founded in 2004, Vudu offers a digital video streaming service that provides users with access to a vast library of movies and TV shows. Its core products include on-demand rentals and purchases, as well as a free, ad-supported streaming option. Vudu differentiates itself with high-definition video quality and early access to new releases, making it a competitive player in the digital entertainment market.

Who Acquired Vudu?

Fandango is a prominent digital network in the movie industry, offering a range of services including movie ticketing, showtimes, and streaming options. Key products include movie tickets, showtime information, and home viewing services through Fandango at Home. The platform also features promotional offers, a FanStore for movie merchandise, and editorial content like movie news and interviews. Fandango's significant market position is bolstered by affiliations with major brands and NBCUniversal, enhancing its influence in the entertainment sector.

When Was Vudu Acquired?

Fandango acquired Vudu from Walmart on April 20, 2020. This acquisition occurred during a pivotal time in the digital streaming industry, as the COVID-19 pandemic significantly altered movie-watching habits. With theaters closed, there was a marked shift towards digital releases, making the acquisition a strategic move to enhance Fandango's digital offerings and compete more effectively with major players like Amazon and iTunes.

Why Was Vudu Acquired?

• Market Expansion: Fandango's acquisition of Vudu is a strategic move to scale its presence in the transactional video-on-demand space. This allows Fandango to compete more effectively with major players like Amazon and Apple's iTunes. By integrating Vudu's extensive library and user base, Fandango aims to grow its streaming business and reflect its current size as a ticket retailer.
• Technology Integration: Vudu is known for its high streaming quality, including higher bit rates and the proprietary "HDX" format. Integrating Vudu's technology into Fandango's existing digital marketplace, FandangoNOW, enhances the overall streaming service quality. This technological consolidation helps Fandango reach a larger audience and provides a seamless user experience.
• Competitive Advantage: The acquisition of Vudu provides Fandango with a built-in audience and a dedicated network of home video enthusiasts. This move strengthens Fandango's position against competitors like Amazon and Apple in the digital movie rental and purchase market. Additionally, having both Vudu and FandangoNOW under NBCUniversal's digital network allows Fandango to leverage its position without directly competing with NBCUniversal's Peacock streaming service.

Acquisition Terms

• Acquisition Price: The acquisition price for Vudu by Fandango was not publicly disclosed.
• Payment Method: The payment method used for the acquisition was not specified.
• Key Conditions or Agreements:
  • Vudu and FandangoNOW will remain separate entities within NBCUniversal’s digital network, focusing on rentals and purchases of newly released films.
  • Neither Vudu nor FandangoNOW will compete against NBCUniversal’s Peacock streaming service; instead, they are designed to complement it.
  • Walmart will maintain its relationships with Vudu, including account integration and promotion of the service via Walmart's website.
  • Vudu will continue to operate as a separate brand, coexisting with FandangoNOW for the near term.
  • There will be no immediate changes to either service, and the priority is to ensure that Vudu customers and partners receive the highest level of service during the transition period.

Impact on Vudu

The acquisition of Vudu by Fandango has led to several operational and managerial changes. Vudu will continue to operate as a separate brand within NBCUniversal’s digital network, coexisting with FandangoNOW. This strategic move aims to integrate Vudu's high-quality streaming technology and extensive library into Fandango's digital marketplace. The rebranding of Vudu to "Fandango at Home" in 2024 aligns all Fandango products under a single brand, enhancing its market presence. Despite these changes, the core mission remains the same: to provide users with seamless access to a vast array of movies and TV shows.

In terms of product offerings, the acquisition has not disrupted existing services. Vudu's ad-supported streaming service and its extensive library of over 200,000 titles continue to be available. Customers have been reassured that their accounts and content libraries will remain unchanged, with the added benefit of linking their Fandango and Fandango at Home logins. While specific employee reactions are not detailed, the focus on maintaining high service levels suggests a smooth transition. Customer reactions have been generally positive, appreciating the enhanced streaming options and early access to new releases.

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