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Vudu, Meet YouTube - Broadcasting & Cable

Vudu, Meet YouTube

Internet movie service branches into Web video
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Vudu, the Internet movie service that uses a proprietary set-top box to deliver pay-per-view, on-demand movies and TV shows to living-room TV sets, is now expanding its repertoire to include the vast wealth of free video available on the Web.

The company has developed new software, called the Vudu RIA (Rich Internet Application) platform, which allows Vudu users to browse and watch free Web video from popular sites like YouTube using the existing Vudu interface and remote control.

Vudu says it can use its set-top to show any free Web video compressed with standard H.264 advanced encoding that doesn’t require a software client or proprietary player (such as Hulu). It has created a new "On Demand TV" area with more than 120 channels of free on-demand shows from both major networks and on-line specialty sites.

Programs include daily highlights from shows such as NBC’s "Today", MSNBC’s "The Rachel Maddow Show", CNN’s "Anderson Cooper 360", and "MTV News", as well as full programs, some in HD, from Nova, National Geographic, PBS and others. The videos are streamed directly from the providers’ Websites and are not stored on the Vudu box, unlike Vudu’s pay-per-view movies. But they are run through Vudu’s video processing algorithms to improve their quality when displayed on a big-screen set.

Vudu launched with a selection of TV shows from Fox, Warner Bros. and Sony that it sells on a pay-per-view basis for $2 per episode, and it currently offers some 2,000 episodes. But since much of Vudu’s user base already has a DVR or is technically savvy enough to access the primetime content available for free online, it has decided to focus on expanding its movie offerings and providing more HD titles.

Providing free Web video to the TV, however, adds another feature to the Vudu box, which currently sells for $299 at Best Buy, and makes the service stickier for existing users. While the quality of some of the Web video may be lacking on a big-screen set, the convenience of Vudu RIA should be appreciated by Vudu customers, says Vudu EVP of Strategy and Content Edward Lichty.

“Web video is increasingly becoming a big part of people’s lives,” says Lichty. “A lot of that is consumed on the PC, but it’s not necessarily the best place to do it, but where it is currently available. We want to bring them into an environment that we think is a great place to consume content.”

Vudu also plans to open up Vudu RIA to outside developers to create third-party applications for the Vudu service, by releasing a software developer kit in early 2009. The company is already showing some initial applications under Vudu RIA on its home page in an area called Vudu Labs. In addition to the On Demand TV offering and access to the entire YouTube library, these applications include casual games and implementations of the Flickr and Picasa photo-sharing sites.

While the applications under Vudu RIA are only available through the Vudu set-top today, Vudu is pitching the software platform as having capabilities beyond its proprietary box for bringing Internet content to the TV. The company says that Vudu RIA is aimed at “today's low power set-top boxes and Internet appliances” and can deliver a fast user experience on any device with a 300 MHz embedded processor with 128MB of RAM.

Industry insiders have suggested that the end-game for Vudu is not selling a $299 box at retail, but instead striking deals for its software to be incorporated into cable set-tops and TV sets, as digital video-recorder pioneer TiVo is now doing with Comcast and Cox. The introduction of Vudu RIA would seem to confirm that assumption.

Lichty says that Vudu has no such deals to announce at this time, but that the idea of porting Vudu software to other devices is not far-fetched. He notes that there are an increasing number of video devices, such as game consoles and Blu-ray players, which are connected to the Internet.

“I don’t think we have made any secret of it that we think the value of Vudu is fundamentally in the service and software,” he says. “Certainly, we would be open to that software running in other environments besides our set-top.”

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