Walmart Inc. (WMT), the world’s largest retailer, is reportedly getting into the video streaming space as new on-demand subscription-based platforms gain traction against traditional forms of distributing entertainment.
According to a report in The Wall Street Journal, which cited people familiar with the matter, the retail chain is still in the early stages of developing a plan for the service targeted consumers in “Middle America.” While the Bentonville, Arkansas-based company has not given the green light for the streaming project, a decision could be reached as early as late summer or early fall, as reported by the WSJ. (See also: Stay Away from ‘Dead Money’ Walmart, Says Analyst.)
Walmart’s dive into the on-demand streaming space would place it in an increasingly crowded and competitive market where it faces off against global leader Netflix Inc. (NFLX) and tech titans such as Amazon.com Inc. (AMZN) and Alphabet Inc.’s (GOOGL) YouTube, as well as Hulu and AT&T Inc.’s (T) HBO.
A Crowded Pool of Streamers
The retail giant is working with veteran television industry executive Mark Greenberg on the potential offering. Greenberg, who has held titles at Showtime and HBO, most recently served as CEO of pay-television channel Epix, and has been working with Walmart for several months. The direct-to-consumer streaming service is expected to be priced lower than current packages by popular platforms like Netflix and Amazon in an effort to target consumers outside of big cities, according to sources cited by the WSJ.
Walmart’s acquisition of online movie-streaming service Vudu in 2010 failed to boost its position in the space to a leadership level. Vudu, which allows users to buy or rent films, is available on TVs and streaming hardware like Roku boxes. Among U.S. households that streamed video on a TV at home in April, just 13% used Vudu, compared to 73% that used Netflix, 50% which used YouTube, 36% for Hulu and 28% for Amazon Prime Video, according to data from comScore Inc.
It is not yet clear the type of content that Walmart will offer on its platform. The retailer could choose to license existing content or produce original programming. Streaming services have poured billions into in-house productions in the recent years, with Netflix projected to spend up to $13 billion in 2018 alone. (See also: Netflix to Spend $13B on Original Content in 2018.)
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