Paying retail

Connected Devices Yesterday I flagged some stories speculating about Best Buy-branded tablet device and concluded that the electronics retailer was indeed preparing to introduce its own tablet as part of a broader media streaming and wireless strategy. Today brought another story that again underscores the growing scope of retailers’ — particularly electronics retailers — to bootstrap themselves into major media content distributors by leveraging device connectivity.

The Wall Street Journal reports that Sam’s Club, the warehouse club chain owned by Wal-Mart Stores is installing free Wi-Fi in all its outlets, the better to promote sales of connected TVs this holiday season. Per Sam’s Club CEO Brian Cornell, “This will allow a member to walk up to a Samsung LCD Internet-enabled TV and see how to find his Facebook page or stream video from Vudu.”

Video streaming platform Vudu, of course, was acquired by Wal-Mart back in February, for a reported $100 million, shortly after Vudu announced deals with seven of the nine largest electronics brands in the U.S. to embed its software in their connected TVs and Blu-ray players.

Connected devices have to potential to provide electronics retailers something they haven’t had before: a post-sale revenue stream. Best Buy and Wal-Mart are using their leverage with hardware makers to get them to embed proprietary streaming software in their devices so the retailers can continue to serve content to customers after they buy a network-capable device. In the process, they’re looking to knit together a kind of virtual distribution channel with potentially millions of clients.

Entertainment is an important category for these retailers, both for driving traffic and for customer retention. Their current anchor in the category — DVD/Blu-ray — is fading fast and losing shelf space and both Best Buy and Wal-Mart are increasingly serious about replacing it with digital delivery on their own terms.

Each as considerable leverage with hardware makers and content owners, as well as access to a huge number of consumers. They need to be taken seriously as players in the distribution game.

Further reading:

The Ultimate Guide to TV Everywhere ($$)

TV Apps: Evolution From Novelty to Mainstream ($$)

Google TV: Overview and Strategic Analysis ($$)

Media to Outpace U.S. Economy Through 2014