Walmart Picks Up Vudu, Kills Adult Section

This week, Walmart expanded its empire to include the streaming video arena. Vudu is a set top box providing a service in the same vein as Netflix in offering streaming video. The differences lie in the pricing structure. Rather than paying monthly for a set number of discs and unlimited streaming on Netflix, Vudu is a free service that offers rentals between $1 and $6 a piece or purchases between $5 and $25. The acquisition didn't seem to affect much on Vudu's end until Walmart announced earlier today that the Adult section of the Vudu market would be shut down. They sent out this letter to their Adult area partners:

Dear VUDU After Dark Partner,

As you may have recently heard, VUDU was acquired by Wal-Mart. In conjunction with this acquisition we will be discontinuing the “After Dark” adult service over the coming days. Upon completion of the shutdown process, we will settle all accounts with you and ensure that you are paid the full amount you are owed under our existing agreement.

Attached to this agreement, please find a voluntary termination notice to our existing distribution agreement. As there has been no breach of contract by either party, there are no grounds to terminate the agreement under its existing terms. However, given the discontinuation of After Dark, we believe it makes sense for both sides to voluntary terminate the agreement. The alternative is to allow the agreement to expire under the existing terms, but we believe this is cleaner for all parties.

We ask that you complete, sign and return this termination notice at your earliest convenience. Please let me know if you have any questions.

Later in the day, Walmart did make an announcement that users who had purchased content would receive a full refund. Not a good week to be a porn fan.