Looking to bridge the business of DVD movie ownership to digital movies, Walmart is starting up a disc-to-digital cloud service in a deal with the five major movie studios.
Using its digital video platform Vudu, where consumers can currently buy or rent movies and TV shows, Wal-Mart has struck a deal with the five major movie studios' home entertainment divisions: Sony Pictures, 20th Century Fox, Warner Bros., Universal and Paramount.
The essence of the service will allow consumers to bring their movies on DVDs into Wal-Mart stores and have them converted into a digital cloud service accessed by Vudu. In addition, standard-definition movies can be upgraded to HD films.
Prices for a standard-definition or Blu-ray conversion of a disc into one's personal cloud service will be $2 for a single DVD, Converting one SD disc to access in a HD cloud service is $5, and converting one HD DVD movie into cloud HD service of that movie is $2.
"This will give consumers confidence in buying physical DVDs," says John Aden, executive vice president of general merchandising for Walmart U.S, speaking at a press conference in Hollywood on Tuesday. "They can future proof their purchases."
By some estimates, Walmart sells more movies to consumers than any other company in the world.
Walmart would not elaborate about marketing support, but Ron Sanders, president of Warner Bros. Home Entertainment, says the advertising support would be akin to a "blockbuster movie launch." Estimates are that movie studios can spend $50 million to $100 million when it comes to marketing support of an individual big summer movie.
Movie executives believe this alliance will help their suffering home entertainment business and stem the slide of DVD sales and rentals. It should also push one of their bigger efforts, Ultraviolet, where consumers can buy a DVD and have access to a digital version of that movie through other digital platforms -- which some analysts consider cumbersome.
"This is big step for Ultraviolet," says Dennis McGuire, president of Paramount Worldwide Home Entertainment. "This makes it ready for a mass audience. It [has not been] a simple message to the consumers. With Walmart, this will help; this will be simple."
The service will begin April 16 in some 3,500 U.S. Walmart stores.