Walmart has had discussions with executives at Paramount, Disney and Comcast as it considers adding streaming services to its retail membership offer, according to a new report by the The New York Times.
The Times cited people with knowledge of conversations, saying the media company executives talked with Walmart in recent weeks, though it’s unclear if any of the streaming companies want to reach a deal with the retail giant. The report also suggests that Walmart itself is weighing options as it considers the best entertainment to potentially bundle with its Walmart+ membership.
Of the companies cited by the NYT, Paramount offers its flagship Paramount+ service as well as direct-to-consumer Showtime, Disney has Disney+, Hulu and ESPN+, and Comcast’s NBCUniversal owns Peacock.
Part of the aim appears to be extending Walmart’s relationship with customers beyond its physical stores, per the report, and to compete against Amazon which already offers a full video platform included with Prime membership. The Walmart+ membership already includes a free six-month subscription to Spotify premium, along with free shipping and discounts on gas. Walmart+ costs $12.95 per month while Amazon Prime is priced at $14.99 per month.
Adding streaming services to attract more subscription customers isn’t an entirely new move, as major wireless carriers already do so. For example, T-Mobile has long offered “Netflix on Us,” while Verizon has bundled a free Disney+ subscription with certain wireless plans, and AT&T included HBO Max on select plans (an agreement that was recently re-extended with Warner Bros. Discovery the company disclosed during Q2 earnings). T-Mobile just added a free year of TelevisaUnivision’s premium Spanish-language streaming service ViX+, while Verizon expanded a Disney+ offer to unlimited prepaid customers.
Per the New York Times, Walmart sees a similar logic to the strategy where it creates a stronger customer relationship and incentivizes sign-ups, while the streaming companies are poised to gain additional subscribers subsidized by the partner.
Roger Enter, principal analyst and founder of Recon Analytics, suggested that if implemented, adding a streaming service to the mix might not do all that much for Walmart in terms of enticing users and competing with Amazon. He told Fierce that based on the firm’s research, “people put a reasonably accurate value on bundled service.”
“If a Walmart membership is anything remotely similar to telecom then the existence of a bundled streaming service will not make a significant difference,” Entner said.
Vikrant Mathur, co-founder of AVOD publisher Future Today, said in emailed comments that in principle the idea of adding streaming services as a value-add for Walmart and competition against Amazon makes a lot of sense for both sides.
However, “for the offering to be really compelling to the consumer, Walmart+ will probably need to bundle and offer multiple content services, wherein lies the challenge,” Mathur commented. “Given the $12.95 price point, and the network’s notoriety for not discounting their packages to (v)MVPDs, how many such services will Walmart be able to squeeze in without having to raise the price?”
Consumer data could help targeting on ad-supported content
Whether anything will come to fruition remains to be seen, but David Zapletal, chief operating officer of Digital Remedy, believes it’s a smart move, particularly by Walmart adding partners and enriching user data with their own proprietary data.
"It makes sense for Walmart to be looking to expand its offering into the content space as it looks to continue to compete with Amazon Prime which offers both similar benefits to shoppers as well as access to a vast content library,” Zapletal said in emailed comments. “For advertisers, a partnership like this would potentially provide another opportunity to connect shopper data directly to media exposure within a single ecosystem.”
Walmart this year has already made efforts to tie content viewing to purchases. This summer it teamed with Roku to pilot shoppable ads, where users can make purchases from their TV screen with pre-populated financial data from Roku Pay, and checkout on the Walmart page with a simple click of the TV remote.
“Much like Amazon, Walmart sits on a wealth of purchase and consumer data that could effectively be fed into targeting, measurement, and optimization strategies across a connected, ad-supported content ecosystem,” Zapletal continued. “By offering consumers this service in return Walmart could leverage identity and behavioral data for effective targeting across ad-supported content.”
Walmart has made attempts in the content space before, acquiring video startup Vudu in 2010 for a reported $100 million. A decade later in 2020 NBCUniversal’s competing service Fandango bought Vudu from Walmart.