The New York Times has a breathy overview of Vudu, a new set-top box that lets users download and view on their TV any of 5,000 movies. The selling point for the device is its speed, which, according to reports, uses P2P technology to allow almost immediate viewing.

“This is something that is going to alter the landscape,‚Äù boasts Tony Miranz, Vudu‚Äôs founder. ‚ÄúWe are rewriting economics.‚Äù

Here’s what the NYT has to say about the new device:

If Vudu succeeds, it may mean goodbye to laborious computer downloads, sticky-floored movie theaters and cable companies’ much narrower video-on-demand offerings. It may even mean a fond farewell to the DVD itself — the profit engine of the film industry for the last decade. “Other forms of movie distribution are going to look silly and uncompetitive by comparison,” Mr. Miranz asserts.

While the NYT may be excited about the Vudu, it looks to us it could be dead on arrival. Here’s why….

5 Reasons The Vudu Is DOA

• The company has enough startup capital to emply 41 people, yet it doesn’t have the net & marketing smarts to secure the Vudu domain name, which belongs to Seattle, WA media guru Pete Helvey. If you’re looking for Vudu - Pete says “Howdy!”
• It’s competing directly with Apple and Microsoft with an offering that doesn’t do a fraction of the things that the Apple TV or the XBox 360 do.
• It’s not cost-effective. You’d have to save a lot of money on DVD purchases to justify the $300 cost of a Vudu. For most people, buying DVDs is cheaper and offers more content than digital movie downloads.
• It’s all about on-demand digital movies, which haven’t found a market yet, and ignores one of the fastest-growing areas of content on the Web, video podcasts and Internet video. Microsoft’s Zune portable media player has demonstrated what happens when you introduce a digital media device that isn’t designed to work with Internet media - the all-important first movers stick with more capable devices.
• It’s a closed, single-platform system. People want to watch movies on their TVs, but they also want to watch them on their laptops and portable media players. Apple’s iTunes system already lets you play movies on iPods, your computer and on your television, so any system that wants to compete needs to have equal capabilities.

There’s a tremendous amount of opportunity in the world of digital video. The video capabilities of the XBox 360 and Apple TV are far from ideal, and there’s plenty of room for innovation in this area.

Unless the Vudu can deliver innovation that leapfrogs the current capabilities of Microsoft and Apple’s offerings, though, it’s a device that’s dead on arrival.