If Wal-Mart buys Vudu, will the adult content go away?

Wal-Mart is in the process of acquiring streaming video service Vudu, The New York Times reports today. An unnamed source said the two companies have begun telling Hollywood studios about the deal. No details have yet been disclosed to the public.

Vudu has had its own streaming HD video products available for a little more than two and a half years, and has gradually moved away from a hardware-centric service to something more akin to Netflix, where its platform is the core of the business.

This year, Vudu's HD on-demand movie service has been embedded in TVs and connected media players from major consumer electronics makers such as Mitsubishi, LG, Samsung, Sanyo, Sharp, Toshiba, and Vizio.

Among its competitors Netflix, Blockbuster, and Amazon, Vudu has the dubious distinction of being the only major digital streaming service to offer adult entertainment through its partnership with the AVN network.

This may cause issues since Wal-Mart is well-known for carrying "clean" versions of much of its disc-based music and movies, and this has extended to the download market.

The store's policy says: "Occasionally, Wal-Mart may refuse to stock music merchandise that may not seem appropriate. However, Wal-Mart may carry some recordings that some customers might find offensive, indecent, or objectionable. Parents are always encouraged to review the merchandise their children purchase from Wal-Mart to ensure it meets their own standards."

We've sent inquiries to both companies and will hopefully learn a little bit more today.

UPDATE- Wal-Mart has officially announced the acquisition, saying it expects it to be completed in the next few weeks. The financial terms, however, were not released.

Edward Lichty, VUDU's executive vice president said, "We are excited about the opportunity to take our company's vision to the next level. VUDU's services and Apps platform will give Wal-mart a powerful new vehicle to offer customers the content they want in a way that expands the frontier of quality, value and convenience."

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