Walmart has confirmed its plans to launch a DVD/Blu-ray conversion service that will let customers bring their existing discs into Walmart stores and convert them to digital files to be streamed from the cloud. America’s largest home entertainment retailer’s new service will be powered by video-streaming service Vudu.

Walmart VP John Aden was joined by execs from five major movie studios for an event in Los Angeles this morning, and Aden was quick to stress that this wasn’t the end of physical format discs, and that they were not ‘mutually exclusive’. “Now customers can have both,” he added.

Walmart’s conversion to digital will cost $2 per disc for standard definition, and $5 to upgrade to HD, and they will be available in more than 3,500 stores across the US beginning Monday April 16th.

The retailer is partnering with Paramount Home Media Distribution, Sony Pictures Home Entertainment, Twentieth Century Fox Home Entertainment, Universal Studios Home Entertainment and Warner Bros.

“Walmart is helping America get access to their DVD library,” said Aden. “Walmart Entertainment’s new disc-to-digital service will allow our customers to reconnect with the movies they already own on a variety of new devices, while preserving the investments they’ve made in disc purchases over the years. We believe this revolutionary in-store service will unlock new value for already-owned DVDs, and will encourage consumers to continue building physical and digital movie libraries in the future.”

How it works

The process to convert previously-purchased DVD/Blu-ray movies to digital copies works like this:

  • Take your titles to your local Walmart Photo Center where you will be helped to create a free Vudu account, if you don’t already have one.
  • Decide whether you want a standard DVD or Blu-ray movie for $2 or upgrade a standard DVD to an HD digital copy for $5.
  • Walmart will authorize the digital copies and place them in your Vudu account. No upload is necessary, and you get to keep your physical discs.
  • Log onto Vudu.com from more your Internet-connected devices to view movies any time.

Walmart’s new service is underpinned by UltraViolet, the movie industry’s beta initiative which allows consumers to put their purchased movies into a cloud-based digital library and manage them there.

Thus far, Ultraviolet has registered somewhere in the region of 1 million users since it was launched last October, but it has been criticized for being too cumbersome to really succeed across the board. However, now that customers can go in-store and be walked through the sign-up process on Vudu, which was bought by Walmart in 2010, this could make a big difference.

So, Walmart is essentially future-proofing itself here – on the one hand it isn’t trying to kill off physical format media, at least not openly, but it is guiding customers into the digital cloud by offering this new service. It’s difficult to see how this won’t at least hasten the demise of physical format movies if this catches on.