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Vudu Signs Studios For Speedy On-Demand Movie Service

The startup's service operates with the company's own appliance, which sits between a broadband connection and the home television.

Vudu, a California startup that plans to offer immediate viewing of thousands of movies over the Web, said Monday that it has closed deals with seven major motion picture studios, and 15 independent film distributors.

The company, which is currently operating in beta, said it now has signed distribution contracts with The Walt Disney Studios, Lionsgate, New Line Cinema, Paramount Pictures, Twentieth Century Fox, Universal Studios, and Warner Bros. Entertainment. Of the major Hollywood studios, the one missing is Sony Pictures Entertainment.

Vudu declined a request for an interview, but a New York Times story on Sunday said the service operates without the use of a PC, leveraging instead the company's own appliance, which sits between a broadband connection and the home television.

Movies are already available over the Web through other companies, such as Movielink and CinemaNow, but what's unique about Vudu is the ability to show a movie immediately after its chosen. Other services require lengthy download times.

Vudu would accomplish the quick download through a peer-to-peer network it plans to build among its own devices. Rather than deliver a movie from a faraway server, the company would grab portions of the movie from appliances in nearby homes, the company told the Times. In addition, when a popular new movie is released, the company would store the beginning of the film in all its customers' Vudu appliances, in case it's chosen.

Pricing for the appliance and service have not been released, and the company has not said when it plans to make the service generally available. The company's investors include Greylock Partners and Benchmark Capital.

While overcoming the hurdle of delivering movies quickly over the Web is an important innovation, it won't be enough to overcome other hurdles Vudu faces, Joe Laszlo, analyst for JupiterResearch, said. Consumers have several options today for watching movies on their TVs, including renting from their cable company, going to the video store, getting films by mail through companies like Netflix, and downloading to a TV-attached PC.

Vudu would mean buying another appliance to add to an already gadget-filled entertainment center, and then paying extra for every movie. "It's a real challenge for any new company to get consumers' attention and to convince them that their way is better than the three or four ways they already have for getting a movie," Laszlo said.

While Vudu seems to have attracted Hollywood, it will need to sign on major consumer electronics retailers, such as Best Buy, Laszlo said. Vudu, however, could become an acquisition target for larger companies that could use its technology to compete with cable companies, such as satellite TV services.

Despite the hurdles, Vudu founder Tony Miranz is confident there is a demand for his service. "We've created the product everyone wants, the product many have tried to build, and, until now, the product no one has succeeded in delivering," he said in a statement. Vudu plans to launch the service with more than 5,000 titles.

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