July 17, 2018
The Walt Disney Co. may not be alone in its quest to launch a subscription streaming service to compete with Netflix, Amazon and Hulu.
Walmart reportedly is considering a proprietary over-the-top (OTT) video service featuring both subscription and ad-supported business models.
Walmart, which currently owns and operates Vudu.com, a transactional VOD and digital sales platform, could add the SVOD service – priced at $8 per month – according to The Information, which cited sources familiar with the situation.
A Walmart representative was not immediately available for comment.
Netflix last October raised its monthly fee to $10.99 for new subscribers from $9.99. And in January, Amazon spiked its monthly subscription charge for Prime by nearly 20%, to $12.99 from $10.99.
Hulu charges $7.99 for a monthly plan with commercials or $11.99 a month commercial-free.
Bentonville, Ark.-based Walmart is no stranger to home entertainment, having long dominated packaged media sales.
In 2012, with studio support, Walmart launched a disc-to-digital service at stores that enabled consumers to convert their DVD and Blu-ray Disc movies into digital files for fee. The retailer expanded the service a year later through Vudu enabling users to convert a DVD ($2) or Blu-ray ($5) to a digital file from their home.
Taking on Netflix, Prime Video and Hulu, which collectively spend tens of billions of dollars a year licensing third-party and original content, would require a major financial commitment from Walmart.
While the retailer has the requisite fiscal deep pocket to fund a SVOD service, does it have the will?
Redbox and Verizon in 2014 shuttered Redbox Instant, a hybrid disc/SVOD service that attempted to take on Netflix featuring 5,000 titles. It lasted just 18 months.
“The service had not been as successful as either partner hoped it would be,” a Verizon spokesperson said in 2014. “We apologize for any inconvenience this may cause our customers.”
Michael Pachter, media analyst with Wedbush Securities, estimated Redbox Instant generated about 900,000 subscribers before calling it quits.
In August 2017, Vudu arrived on Apple TV. The new app allows users to watch the movies and TV shows saved to their Vudu libraries, but like its iOS counterpart, the Apple TV version of Vudu doesn’t allow them to rent or buy videos through the app directly. Instead, they have to make a purchase through the browser or another device first.
Walmart as of Jan. 31, 2018, had 11,718 stores and clubs in 28 countries, operating under 59 different names. Of those stores, 4,761 are in the United States, accounting for more than 62% of total sales.
Walmart in May said U.S. comp-store sales were up 2.1% from the prior year, while total revenue for the quarter rose 4.4% to $122.7 billion.