Wal-Mart to Take on Netflix, iTunes

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Pitting itself against iTunes and Netflix, Wal-Mart will be offering digital movie downloads through its newly-acquired Vudu service.

Currently, at least among sources of legal digital movie downloads, Apple’s (Stock Quote: AAPL) iTunes and the “Watch Instantly” Netflix feature dominate the market, but Vudu offers major film rentals for between $1.99 and $5.99, according to The Wall Street Journal, which says these prices are often cheaper than iTunes. The Netflix Watch Instantly feature is available to users paying as little as $8.99 a month for unlimited watching, but its selection may be more limited.

Vudu currently sells set-top boxes for downloading movies for rental or purchase at in 1080p high definition with 5.1 surround sound, according to CNET.

Wal-Mart’s (Stock Quote: WMT) purchase of the streaming video service follows Best Buy’s (Stock Quote: BBY) announcement of a partnership with a similar service, Roxio CinemaNow, and comes as sales of actual DVDs continue their decline.

Wal-Mart made a previous attempt at selling digital movie downloads in 2007, the Journal reports, but the Hewlett-Packard (Stock Quote: HPQ) technology required for the service was discontinued within a year, according to the Journal.

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