Wal-Mart (NYSE:WMT) plans to roll out Vudu, an online movie streaming service that it bought in 2010, in a big way internationally. Since its launch, Vudu has generated encouraging customer interest, and it could become a trump card for Wal-Mart if it’s able to launch it strategically in foreign markets. According to a recent report from IHS Screen Digest Media Research, Vudu ranks third in the online movie market behind iTunes and Microsoft’s Zune Video Marketplace with 66% and 16% share, respectively.  Wal-Mart competes with big retailers like Target (NYSE:TGT), Costco (NASDAQ:COST) and Best Buy (NYSE:BBY). Online retailers like Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY) are also serving as stiff competition to Wal-Mart.
Wal-Mart has integrated Vudu movies into its Walmart.com website. According to reports, the retail giant plans to introduce Vudu first in Mexico and later in the rest of Latin America. We believe Wal-Mart could strategically leverage its customer base and global presence while introducing Vudu in new territories.
The company recently initiated a Disc-to-Digital program, which allows customers to get digital copies of DVDs they already own, in order to lure more customers. The market for digital movie streaming has become very competitive with Netflix (NASDAQ:NFLX) being a major player in the U.S. market. However, we are optimistic about Wal-Mart’s expansion plans for Vudu and believe it has the potential to emerge as an important revenue stream for the world’s biggest retailer.