It's no small irony that file sharing, which Hollywood has feared would eviscerate its business, is behind the impressive performance of Vudu, a new service that legitimately sells commercial flicks across the Internet. Vudu does the best job yet of streaming DVD-quality movies to the TV without a stutter.
But the Vudu box costs a steep $400; plus, its 5,000 movies cost $1 to $20 to buy or rent. The selection also is spotty as studios wrestle with licensing issues and irate retailers who sell DVDs.
Some big retailers, including Netflix, Blockbuster, and even Wal-Mart, meanwhile, are experimenting with their own downloading services. "Vudu's service is in many respects a little better than others," says Kurt Scherf, a market analyst with Parks Associates. But it's risky, he adds, spending hundreds of dollars just to enter a fast-changing bazaar.