Walmart’s Vudu will let you convert your DVD to HD streaming for $5

Retail giant Walmart announced its exclusive in-store disk-to-digital service powered by Vudu today, which will allow people to play DVD movies they buy on more devices.

This is the first time a retailer is offering a way for people to upgrade their DVDs to a digital format. Basically, when you buy a DVD in the store, you now have the option of converting it to a digital format for a fee. A standard definition version of the film is $2 while a high-definition version is $5 — and that’s on top of the cost of a regular DVD.  The digital copies purchased can be watched on any device that supports Vudu as well as the industry’s standard UltraViolet platform.

“We see digital movies as a compliment to physical DVDs,” said Walmart EVP John Aden at a press event today. “People still want physical DVDs but they also want to be able to watch their movies on the go.” Aden was joined by top executives from five of the largest film studios in the world, including 20th Century Fox, Paramount, Sony Pictures, Universal, and Warner Brothers.

The move is similar to when Apple tried to get people who purchased songs through iTunes to upgrade their music collection to a higher quality — or essentially, pay for the same music twice. That’s pretty much what’s happening here, but it may be a welcome option for some people.

For instance, VentureBeat’s Devindra Hardawar, who is a huge movie buff (and co-host of acclaimed movie podcast SlashFilm Cast), told me that he’d be willing to upgrade some of the DVDs in his personal collection to the high-def digital version for $5. If you factor in that most Blu-ray discs are $15-$20, the $5 conversion fee is a much better deal.

Yet, the downside of buying a digital copy of your DVD on Vudu is that you’re locked into only watching those movies through the Vudu service. This is the same problem many people have with buying movies directly through iTunes.

It wasn’t too long ago when companies were bundling the digital copy of a movie with the DVD for free (or at least factored into the cost of the purchase). However, the movie studios definitely have a reason to stop this practice in favor of its UltraViolet initiative (as well as partnerships with Vudu). Apple recently began recognizing those DVD digital copies as iTunes purchases, which make them eligible for use on Apple’s iCloud streaming service via Apple TV. Reasonably, those digital copies could also be recognized by other streaming video services in the future, but unfortunately that’s probably not the direction movie studios want to go with their digital purchases.

As for Walmart and Vudu, this is a very good development. Until now, there really hasn’t been a compelling reason to use the Vudu service over other options. Now that people can “upgrade” their DVDs to a high-def digital version, Vudu revenues for stand-alone sales and rentals might get a boost.

Will you be converting some of your DVDs to high-def digital copies via Vudu? Let us know in the comments.