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Oct212016

Podcast #762: Vudu Movies on Us

You’d be hard pressed to find someone who doesn’t think Netflix totally changed the game in home entertainment. First, with the unlimited DVD rentals for a small monthly fee. They essentially ended the video store business. Then, with the shift into unlimited streaming movies, anywhere, anytime, again for a small monthly fee. It has changed the way most of us watch movies, and in some cases, television series. They’ve been so succesful, others, like Amazon, have tried to copy their model. But you can’t be king forever. Someone will eventually come along with a different game changer and dethrone you.

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Vudu Movies on Us

You’d be hard pressed to find someone who doesn’t think Netflix totally changed the game in home entertainment. First, with the unlimited DVD rentals for a small monthly fee.  They essentially ended the video store business. Then, with the shift into unlimited streaming movies, anywhere, anytime, again for a small monthly fee. It has changed the way most of us watch movies, and in some cases, television series. They’ve been so succesful, others, like Amazon, have tried to copy their model. But you can’t be king forever. Someone will eventually come along with a different game changer and dethrone you.

Vudu, the on demand movie rental service from Walmart, has never really been competition for Netflix. The two services are quite different. Vudu offers newly released movies for a per movie fee, very much like a streaming version of the old school rental stores. They compete with Apple, Google, Amazon and the like for your new(ish) release rental dollars. Netflix on the other hand, offers older catalog titles and doesn’t charge per movie. The movies aren’t as fresh, but you can watch as many as you want for a fixed monthly fee.

On Tuesday, Vudu rolled out a brand new service they’re calling Vudu Movies on Us. They’re going right at Netflix, but they’ve dropped the monthly fee. They have thousands of movies and TV shows available for streaming for free. No charge. The only catch? You have to watch some commercials. They are paid for by the Ads you have to watch. This leaves us with two choices for streaming catalog titles, do you want to pay a fixed monthly fee to avoid watching ads, or pay nothing at all and have to sit through a few commercials?

Of course Vudu wants you to sign up so that when you want to rent a newly released title, you’ll select Vudu as your service of choice instead of any of the other options out there. They don’t really need to make any money on the new Movies on Us service if it brings in a deluge of new accounts. They just need to find a way to convert those free accounts into rental customers. If they can do that, the new service is a huge success. For many people who pay monthly for a Netflix account, but perhaps don’t use it all that much, Vudu Movies on Us could be a great option.

Historically there has been a pretty decent gap in the video quality you get from the various streaming services, with Vudu and specifically their HDX format, being hands down the best experience available. That is changing with some services starting to offer 4K streaming, and the gap for HD or so-called 1080p, has gotten much smaller. But, it is pretty awesome that Vudu will allow you to stream movies in the HDX format for free.  They aren’t crippling the quality if you choose to watch for free. The experience is exactly the same.  For most titles, you can rent them for $3.99 if you don’t want to watch the commercials. If you watch the ads, you get the same video you get if you pay for it.

And the titles aren’t all random, artsy, independent flicks you’ve never heard of before. They are the same catalog titles you’d find on Netflix or Amazon Prime. Titles for whatever you’re into, like the western remake of True Grit with Jeff Bridges and Matt Damon, comedies like School of Rock with Jack Black or The Love Guru with Mike Myers, action movies like Out of Time with Denzel Washington, or romantic stuff like Sliding Doors with Gwyneth Paltrow. We didn’t have the opportunity to watch any of the titles all the way through to the end, but for those we did watch, we sat through three, 30 second ads then watched the movie like normal. It’s possible they insert more ads in the middle of the movie, but we didn’t see any.

Doing the math, you’ve got a minute and a half of advertisements to save $3.99 per title.  Of course most people would opt for Netflix for those titles, so they’d get them included in their $9.99 or $11.99 monthly fee. But if you watch less than three movies per month on Netflix, it’s actually cheaper to just rent them on Vudu. And now, it’s totally free. You can have up to 8 devices associated with your Vudu account, and computers, like laptops or desktops, don’t count against that 8. From what we can tell, there’s no limit on how many of them can be streaming simultaneously like you have with Netflix.

 

The Competition

Looking at the competitive landscape, Vudu Movies on Us gets the Walmart streaming service in a head to head with Netflix and makes them more competitive against Amazon. All things considered, the Amazon service is probably still the best deal. You get the unlimited catalog streaming as part of your Prime subscription that also gets you the great deals on shipping and other Amazon perks. Of course, if you don’t do lot of shopping at Amazon, the need for Prime shipping goes away, so the streaming fee would be measured against the Netflix monthly fee. And you’d compare that with the free, ad supported offering from Vudu.

Like Vudu, Amazon has both newly released titles for rental and the catalog content included in your subscription. Netflix doesn’t have the new release titles, so if you stick with Netflix, you still have to supplement with another service if you want to watch something that isn’t available in their catalog. Both Netflix and Amazon have original content; something Vudu doesn’t have right now. Vudu does occasionally get exclusive titles, but not typically the blockbusters everyone is clamoring to rent. With Amazon and Netflix, similar to how DirecTV can hook you with NFL Sunday Ticket, if you’re really into the exclusive content Amazon or Netflix produce, you’ll have to stick with one or both of those services. That’s a hook Vudu doesn’t have right now.

Of course, the real competition would be a fixed monthly subscription that included newly released titles. If Netflix wanted to change the game again and stay king, they should be looking into that. Or, perhaps Vudu making the newly released titles available for streaming for free if you watch ads. That would send their subscriber numbers through the roof.  If you could get any new title as soon as it became available for streaming for free, by just agreeing to sit through a couple minutes of ads, who wouldn’t go for that? We should probably let Vudu enjoy this moment of disruption before we push them to the next one, but ad supported new release titles would be the killer app.

Well, the real killer app is day and date with the movie theater, but we’re still waiting for that.

 

 

Download Episode #762

Reader Comments (2)

I'd probabaly be willing to endure commercails before the movie (go make popcorn or use the restroom), but if there are any in the middle of the movie that would be a dealbreaker.

The streaming movie selection on Netflix is pretty bad -- luckily there are some good TV shows (both original and rerun)

October 21, 2016 | Unregistered CommenterBrian McCarty

I would be all for you guys adding commercials to the podcast. I would just make sure you be picky with the ones you choose.

October 23, 2016 | Unregistered CommenterKen Meyers

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