Vudu, the latest entry into the video download market, launched Wednesday with over 5,000 movies available for immediate watching.
There's been some buzz over the months about the startup, but I'll cut to the chase and not go over what about every other video download company offers.
The differentiation for Vudu is instant gratification. That's the key to their strategy.
How that specific part of it works is all the movies has a few seconds stored on the Vudu box provided. Once you start watching, you get the rest from the servers of the company or your neighbor's box.
The company is counting on people willing to pay more for this instant gratification - which will cost you $399 for the box - before you get to start looking for movies.
Once you buy the box, you can rent movies for $0.99 to $3.99. If you want to buy a movie, they'll be for between $4.99 and $19.99. If you buy the movie it will remain on the box to watch whenever you want. At this time there's no way to transfer the movie to a portable device.
The box itself has a 250-gigabyte hard drive, which will hold about 100 hours of regular movies on them. Storage can be increased by connecting a USB hard drive. The broadband connection must be a minimum of 2 Mbps.
Vudu has a number of agreements in place with major studios and independents, including New Line Cinema (TWX), Twentieth Century Fox (NWS-A), Walt Disney Co. (DIS), Paramount Pictures (VIA-B) and Lionsgate (LGF).
Along with the usual classics, the company adds it will have all the movies released on DVD or electronically available to watch.
Co-founder Tony Miranz hints that the idea of targeting those who seek instant gratification will be more of a niche market, as he's not targeting the mainstream TV households in the U.S.
As far as a business strategy goes in this market, it's probably a good one. In an earlier post today on this blog, I talked about the future of movie download companies and how it's not going to grow near as fast as previously expected, and how the roll out of services like these will take some time to get a lot of market penetration.
If the company has the financing and long-term outlook needed to succeed in this market, it's possible they may do ok. This is definitely a play for early adopters, and the market has a lot of competitors in it.
It'll be worth watching to see if instant gratification is valued at $399.00. If it works, they could position themselves nicely in this market over the next several years.
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