updated 2/24/2010 12:55:11 PM ET 2010-02-24T17:55:11

Wal-Mart Stores Inc. said Monday it will buy broadband entertainment provider Vudu, a deal that gives the world's biggest retailer the ability to sell movies directly through TVs and Blu-ray players over the Internet.

With the acquisition, Wal-Mart returns to the video-on-demand business, which it tried in the past but failed. Its most recent attempt, offering movie downloads, ended in 2007 after less than a year.

Wal-Mart did not disclose the terms of the newest deal.

Vudu Inc.'s technology can deliver video to consumers who have broadband Internet access and own an Internet-ready TV or Blu-ray player.

Since August, Vudu has offered its service on LG and Mitsubishi-made devices.

In January, Vudu announced it had expanded its partnership deals to Sanyo, Sharp, Toshiba and Vizio. And it said it planned to launch an application platform that would include apps from Facebook, Flickr, Twitter, The New York Times and The Associated Press.

Vudu has licensing agreements with major movie studios and distributors for about 16,000 movies. Its movies cost $3.99 to rent or $19.99 to purchase.

Eduardo Castro-Wright, vice chairman of Wal-Mart, said in a statement that the acquisition will "provide customers with unprecedented access to home entertainment options as they migrate to a digital environment."

The company did not respond to further inquiries from The Associated Press Monday.

Wal-Mart already sells devices that have Vudu capability.

Vudu, based in Santa Clara, Calif., was founded in 2004 and funded by venture capital firms Greylock Partners and Benchmark Capital.

It started out selling set-top boxes for as much as $295 but began phasing them out six months ago in favor of working directly with makers of TVs and other devices.

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