Wal-Mart Stores Inc. (>> Wal-Mart Stores, Inc.) has added titles from DreamWorks Animation SKG Inc. (DWA) to its video-streaming service, as the retail behemoth look to compete in the market for digital content.
Last month, the company said that it was teaming up with several major Hollywood studios to provide a service allowing customers to bring discs from participating studios into more than 3,500 stores and upload them to its VUDU service. Wal-Mart acquired VUDU, a Silicon Valley startup, in 2010.
A conversion will cost $2 for Blu-ray or DVDs, while DVDs can be upgraded to high-definition for $5.
Wal-Mart's foray into digital distribution comes as brick-and-mortar retailers look for ways to adapt to growing demand for streaming video, which allows consumers to watch movies and TV series on any Internet-enabled device, including smartphones and media tablets. The company, which is the country's largest seller of DVDs, has seen disc sales ebb in recent years as customers increasingly get their movies elsewhere.
Dreamworks, maker of movies like Shrek and Kung Fu Panda, joins major distributors owned by Viacom Corp. (VIAB), Sony Corp. (SNE, 6758.TO), News Corp. (NWSA, NWS), Comcast Corp. (CMCSA) and Time Warner Inc. (TWX) partering with Wal-Mart on the service. News Corp. also owns Dow Jones & Co., the publisher of this newswire.
Rival Best Buy Co. Inc. (BBY) adopted a similar strategy when it partnered with another streaming service, Sonic Solutions' Roxio CinemaNow.
Wal-Mart also supports UltraViolet, a standard promoted by the movie industry that lets consumers upload purchased content onto a cloud-based digital library. That standard has failed to gain much traction among movie owners.
VUDU began as a company that offered streaming services through a separate set-top box, but the brand gained more popularity when it was embedded in other manufacturers' devices, mostly televisions and movie disc players, allowing their owners to access movies from their living rooms.
Wal-Mart has been working to expand its digital download service, which is currently limited to music and badly trails such industry leaders as Apple Inc.'s (AAPL) iTunes, despite often charging lower prices.
The retailer tried once before in 2007 to offer paid movie downloads through a service called Wal-Mart Video Downloads before Hewlett-Packard Co. (HPQ), which was providing the technology, discontinued it.
Shares closed at $59.77 on Friday and were inactive in premarket trading. The stock is up 7.8% in the last six months.
-By Kristin Jones; Dow Jones Newswires; 212-416-2208; [email protected]