Wal-Mart Buying VUDU

The New York Times is reporting that Wal-Mart has agreed to acquire IPTV software maker VUDU for an undisclosed amount. So far neither company is commenting, but this would be a very big deal in the consumer electronics world, giving the world’s largest retailer a direct line into consumers homes.

VUDU recently announced it was abandoning the set-top-box business to focus on software, opening its SDK up to developers and building partnerships with existing TV manufacturers to directly embed the VUDU interface into CEs. This move should put Wal-Mart into more direct competition with Amazon and Netflix for downloads and will provide additional bargaining power for the company when negotiating with hardware manufacturers. In short, VUDU is now a legit powerhouse in the Over The Top marketplace.

UPDATE: Peter Kafka puts the price tag at over $100 million according to a “person familiar with the deal.”

UPDATE 2: The official Wal-Mart press release is here. Not much news – key points:

The company is not disclosing financial terms of the agreement as the acquisition is not material to its first quarter earnings for fiscal year 2011.

And the obligatory generic executive quote:

“The real winner here is the customer,” said Eduardo Castro-Wright, vice chairman for Walmart. “Combining VUDU’s unique digital technology and service with Walmart’s retail expertise and scale will provide customers with unprecedented access to home entertainment options as they migrate to a digital environment.”