Vudu is a three-year-old Silicon Valley startup that has never turned a profit, but in its press release, Wal-Mart says:

VUDU is a revolutionary service, built into a growing number of broadband-ready TVs and Blu-ray players, that delivers instant access to thousands of movies and TV shows directly through the television. Customers with broadband Internet access and an Internet-ready TV or Blu-ray player can rent or purchase movies, typically in high-definition, without needing a connected computer or cable/satellite service.

The only manufacturers who don’t make a Vudu enabled set/player are Sony and Panasonic. The NYTimes explains:

Wal-Mart’s move is likely to give a lift to sales of Internet-ready televisions and disc players, which generally cost a few hundred dollars more than devices without such connections. These products allow people to watch movies and shows over the Internet, bypassing their traditional cable or satellite service.

The deal could also allow Wal-Mart to one day sell a variety of other merchandise through people’s televisions via the Vudu service.

Other companies including Best Buy, Amazon.com, Comcast and Echostar may have wanted it. Wal-Mart got it. That doesn’t automatically make it a success:

[Wal-Mart] introduced a music download store in 2004, but the effort has badly lagged iTunes and even Amazon’s MP3 store. In 2007, Wal-Mart experimentally unveiled a movie and TV show download service with the help of Hewlett Packard. But customers never embraced it, and Wal-Mart shuttered the site the following year after H.P. closed the division that was providing the technology.

Peter Kafka at All Things Digital reported Wal-Mart was in talks with Vudu a couple weeks back. Endgadget has news of recent Vudu service updates.