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Vudu Debunks Rumors of Demise

The developer of IP-based video on demand just laid off 15-20% of its work force and is changing some product strategies, but Vudu says it is 'doing very well'


Wait, wait, we’re still alive and kicking!!

Rumors of Vudu's demise are greatly exaggerated … if you believe Vudu.

The start-up developer of IP-based video on demand is "doing very well in CEDIA [custom electronics channel] and retail," says Tony Miranz, a Vudu co-founder in charge of sales and business development.

Rumors began swirling yesterday at after several Vudu employees -- including Patrick Cosson, a co-founder and former VP of marketing – were dismissed. At the same time, dealers said they were caught in voice-mail hell and told that Vudu would only provide tech support via email.

Couple that with the fact that several reps have done poorly with the line, and it's no wonder that the rumor mill was churning.

I went over the rumors one by one with Mark Donnigan, national dealer channel manager for Vudu. Most of the allegations are completely wrong, he asserts.

Furthermore, Vudu has plans to launch exciting new services at CEDIA 2008, including more HD titles, HD over component video, and a lifetime warranty on downloaded content.

Rumor 1: Rampant Layoffs

It is true that Vudu recently laid off several staffers, including Cosson and Jez Hildred, formerly AV channel marketing manager.

But layoffs were nowhere the numbers suggested by rumor mongers, who estimated that up to 32 people were sacked. Donnigan and other reliable sources say that 16 to 18 of Vudu's 100ish employees were let go.

Donnigan says that the layoffs were "just a normal process" for a startup that has expanded so quickly. "We just have to figure out how to get back on track in terms of spending."

The official word from Vudu is this:

It is the normal course of business for fast growing startups to align resources to meet market opportunities. We are focusing on expanding distribution in retail as well as specialty AV partners and on broadening our product offering. We are aggressively hiring to support our market and product line expansion. We will continue to be aggressive in aligning resources to drive growth and to meet our business objectives."

Indeed, the company lists 19 open positions on its Web site – mostly technical positions, but four are listed in sales and marketing.

Rumor 2: Discontinued Phone Support for Dealers

Dealers and reps have reported that Vudu discontinued telephone-based support for dealers, and that all support would be provided solely through email.

"Not true at all," says Donnigan. "I can absolutely confirm that."

Although there seems to have been layoffs in the customer support area, Donnigan insists that dealers have not been relegated to email-only support.

He points to the ongoing efforts of Casey Benjamin, a senior tech support guy formerly from Kaleidescape. "He is highly regarded by dealers," says Donnigan.

Donnigan concedes, however, that "for other segments of our business we will probably transition to email only, like for consumers."

In fact, Donnigan says, the dealers that complained about phone support might simply have been caught up in Vudu's transitioning its consumer-oriented support. During the switch, he explains, dealers might have called and got the wrong message.

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Article Topics

News · Product News · Media Servers · Media Server · All topics

About the Author

Julie Jacobson, Co-Founder, EH Publishing / Editor-at-large, CE Pro
Julie Jacobson, recipient of the 2014 CEA TechHome Leadership Award, is co-founder of EH Publishing, producer of CE Pro, Electronic House, Commercial Integrator, Security Sales and other leading technology publications. She currently spends most of her time writing for CE Pro in the areas of home automation, security, networked A/V and the business of home systems integration. Julie majored in Economics at the University of Michigan, spent a year abroad at Cambridge University, earned an MBA from the University of Texas at Austin, and has never taken a journalism class in her life. She's a washed-up Ultimate Frisbee player currently residing in Carlsbad, Calif. Follow her on Twitter @juliejacobson. [More by Julie Jacobson]

17 Comments (displayed in order by date/time)

Posted by Crawford  on  08/23  at  11:39 AM

I don’t understand the appeal of download services like Vudu or Xbox Live.  Vudu movies (last I checked) are $3-$5 each and are subject to license restrictions.  Live downloads run about the same.

We have ‘Redbox’ here where all their movies are $1.  That, combined with a Netflix 3-at-a-time account and you are out the door for far less than what any download service would cost you.  And you don’t have to worry about network outages, network traffic delays, or streaming/license errors. 

I am going to talk to Vudu at Expo and try and understand their appeal because I sure as heck don’t see it.

Posted by Blake Snowdon  on  08/24  at  01:43 AM

An important clarification: Casey Benjamin, named by Mark Donnigan in his attempt to reassure dealers, was one of the employees laid off Wednesday August 19th by VUDU.

Posted by Julie Jacobson  on  08/24  at  05:39 AM

Blake, I sure hope you’re wrong because that would mean that two top vudu execs flat-out lied to me (and the world). I have to give them the benefit of the doubt.

Where did you hear this about Casey?


Posted by Julie Jacobson  on  08/24  at  06:01 AM

Casey’s linkedin profile refers to Vudu in the past tense.

Senior Customer Care Rep.VUDU inc.
(Consumer Electronics industry)
April 2008 — August 2008 (5 months)
Provided technical support to our CEDIA channel partners; focusing on AV, networking and home automation control systems.

I’ll follow up on Monday, but if anyone else knows anything, please chime in.

Posted by Casey Benjamin  on  08/24  at  12:36 PM

Sorry for the confusion Blake and everyone. Through a simple misunderstanding, I did enjoy a 1 day vacation but I am still with VUDU providing dealer support. I was in the office on Friday and will be there going forward. As you can imagine, it’s been a hectic week, we all appreciate your patience and support. If anyone needs assistance I can be reached at 1-408-492-1010 ext 2054 or email .(JavaScript must be enabled to view this email address)

Posted by Julie Jacobson  on  08/24  at  12:41 PM

Casey, thanks for the comment. Hope you enjoyed your day off.

Posted by Julie Jacobson  on  08/24  at  12:53 PM

Indeed, Casey has updated his Linkedin profile post-Vudu-vacation:

Senior Customer Care Rep. VUDU inc.
(Consumer Electronics industry)
April 2008 — Present (5 months)
Providing technical support to our CEDIA channel partners; focusing on AV, networking and home automation control systems.

Posted by Drew  on  08/24  at  08:23 PM

VUDU is doomed, this has no long term place.  Why buy a specialized box when you can get most of this on a PC with netflix.  More layoffs to come when they bolt the door.

Posted by Blake Snowdon  on  08/24  at  11:31 PM

Julie, sadly, you were lied to. The executive staff clearly decided to hire Casey back after Mark Donnigan led you astray to appease the CEDIA channel. As a former Vudu employee as of last Wednesday (the day of the 25% RIF), and one who is currently holding in hand a copy of the RIF list (those employees laid off that day), I can assure you that Casey was indeed “eliminated,” the unfortunate phrasing on the RIF sheet. He even held a gathering at his home for those of us stunned and recuperating from their lay offs two nights later.

Posted by Julie Jacobson  on  08/25  at  07:00 AM

Blake, sorry about your own situation.

Yes, it certainly appears that Casey was in fact dismissed, er, given a surprise one-day vacation.

You understand, though, that I couldn’t flat-out accuse Mark and Tony of lying with the little information I had at the time.

Neither of these Vudu officials said Casey HADN’T been dismissed, but it would have been a whole lot prettier if they’d simply said, “we underestimated the value of our custom support team, decided to bring Casey back….”

Here’s what Tony said on Friday:

“I have reinforced our CEDIA customer support with Casey Benjamin who is an Olympic class CEDIA specialist previously with Kaleidescape”

Casey says it was only a “misunderstanding.” Apparently Vudu misunderstood the fallout from dealers?

(Drew…I do disagree with you, and think there is absolutely a market for specialized IPTV boxes)

Posted by Blake Snowdon  on  08/25  at  11:54 AM

Julie, thanks for the follow up. At the end of the day, Vudu has a great product and many talented, decent people who remain. For those reasons, we all hope the company succeeds.

Posted by VUDUPatrick  on  08/25  at  12:08 PM

A point of clarification, though it looks like things have been pretty much straightened out:  Casey was caught up in the reorganization, but is still with us and in fact has taken on an even more prominent role in supporting the Custom Installation channel.  We at VUDU are still hard at work and are excited about the features and products we’ll be introducing in the coming weeks and months.

And Blake, whoever you are, it was a pleasure working with you.

Patrick Ellis
Sr Product Manager, VUDU

Posted by lowenby  on  08/25  at  03:27 PM

I truly hope VUDU comes out of this alive.  It’s a unique product and a completely viable concept.  I only wish that they could have adopted a business model from the get go that is more like Kaleidescape and been more in line with custom dealers instead of big box retailers.  Well, it’s never too late, I suppose.
What’s that old saying about being a Big fish in a small pond is better than a small fish in the sea? CI is the small pond, VUDU!
Louise Owenby
Louise Y. Owenby Tech Systems Design
CEDIA Certified Systems Designer

Posted by Julie Jacobson  on  08/25  at  03:31 PM

Louise, it would be impossible for Vudu to adopt a primarily custom-centric business model. In order to do business with the studios, you need to garner a HUGE customer base, which can only be provided through mass markets.

The custom channel is a mere beneficiary of Vudu’s mass-market aspirations.

Companies like Kaleidescape are selling boxes, not content, so they can afford to do a pure high-end channel play.

Posted by VUDUPatrick  on  08/25  at  04:53 PM


To expand on what Julie said:  While we will be targeting both the mass-market retail and custom channel, we do intend to continue to develop products and features appropriate to the needs of each channel.

Patrick Ellis
Sr Product Manager, VUDU

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