Wal-Mart Stores Inc will buy the Vudu movie service in a deal that puts the world's largest retailer in competition for online delivery of films with the likes of Netflix Inc, the New York Times reported on Monday.

The Santa Clara, California-based startup has thousands of movies from all the Hollywood studios, which it delivers to consumers via the Internet, according to its website. Its investors include Greylock Partners, Benchmark Capital, Artis Capital and other institutional firms.

A Vudu spokesman declined to comment immediately, but said the company was working on a response to the report.

The New York Times reported that Wal-Mart, one of the world's leading DVD sellers, and Vudu began informing Hollywood studios and television manufacturers of their deal on Monday.

Representatives from Wal-Mart could not be reached for comment.

Netflix offers Web streaming through its Watch Instantly service, boasting about 12,000 titles. But most of the films are older Hollywood titles, because major studios have been reluctant to make new releases available for digital streaming.

(Reporting by Alex Dobuzinskis: Editing by Richard Chang)

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