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NBCU's Fandango deals for Vudu

NBCUniversal's Fandango unit has inked a deal to acquire Vudu, a seller and renter of digital movies and TV shows that Walmart acquired back in 2010 for more than $100 million.

Financial terms were not disclosed. Official word of the deal comes about a month after The Wall Street Journal reported that NBCU and Walmart were in advanced talks.

Vudu's free, ad-supported streaming service features more than 10,000 titles.
Vudu's free, ad-supported streaming service features more than 10,000 titles.

For now, Vudu customers can stream and download per usual. "While there will be many more exciting things to share in the months ahead, nothing about the Vudu experience is changing – your movie & TV library is safe, and you will continue to have access to all your Vudu apps across your favorite devices," Vudu explained in this blog post.

Meanwhile, an FAQ about the purchase stresses that Vudu is not shutting down and that Vudu users can continue to redeem digital copies via the service and that all promotional codes and offers remain valid. Additionally, InstaWatch auto-redemptions at Walmart stores will continue to be supported (InstaWatch is a service that sends customers a digital cop of qualifying DVDs or Blu-ray discs purchased at Walmart stores or via Walmart.com.).

It's not clear if or when Fandango, which runs a similar digital content service called FandangoNow, might retire the Vudu brand. "There will be no immediate changes to either service," the FAQ continues.

NBCU is expected to use the Vudu deal to significantly expand Fandango's digital content distribution service. The WSJ reported earlier that Vudu's digital rental business is about seven times the size of Fandango's. Fandango, a company that also sells movie tickets, entered the electronic sell-through market in 2016 through the acquisition of M-GO, a former joint venture of Technicolor and DreamWorks Animation.

In addition to digital rentals and sales, Vudu also operates a free, ad-supported streaming service featuring thousands of movies and TV shows. Per Vudu's latest tally, the service offers more than 10,000 titles for free and 150,000 titles for rent or purchase. Ties to NBCU could give that service access to a broader array of premium content.

Comcast, NBCU's parent company, recently expanded its move into free streaming by acquiring Xumo.

It's not immediately clear how Vudu's business might fit with Peacock, a streaming service from NBCU that is currently slated to launch nationally on July 15 and offer a set of subscription- and ad-based service tiers. At the very least, it could open up another promotional channel for NBCU's new OTT offering.

The digitally-focused deal also happens to come together during a COVID-19 pandemic that has caused some movie studios, including NBCU's Universal, to experiment with early in-home releases of new movies at a premium price while theaters are closed.

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— Jeff Baumgartner, Senior Editor, Light Reading

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