Walmart Targets 'Middle America' With Streaming Content

October 12, 2018

By Carlo Versano

Walmart, the world's largest retailer, is making a big play to get into content.

The company this week announced a partnership with movie studio Metro Goldwyn to create video for its nascent Vudu platform. The deal will also give Walmart access to MGM's vast IP catalog. It coincides with another announcement from the retailer of a joint venture with Eko, an interactive video company, to create content for Vudu and its website.

But does this mean Walmart ($WMT) wants to go toe-to-toe with Netflix? Not necessarily, said Business Insider's Kate Taylor.

"It's not clear if they want to compete in the same way" with companies like Netflix ($NFLX), Hulu, and Amazon ($AMZN), which all pour billions into original content.

Instead, Walmart's strategy appears twofold.

One: create an "ecosystem" for customers that builds loyalty (similar to Amazon Prime) and "gets people to shop at Walmart more," Taylor said.

The company would probably be fine with losing money on content if that material boosts sales at stores, she added.

Secondly, Walmart wants to produce material that appeals to families and customers who might not be interested in many of the edgy, high-brow shows being developed on the major streaming platforms.

"I don't think Walmart's going to go for that," Taylor said. "It's definitely [for] a different market."

The first programming to come from the MGM ($MGM) partnership has already been announced ー a digital series reboot of the 1983 Michael Keaton comedy film "Mr. Mom."

That's an indication to Taylor that the strategy is to target families and rural viewers ー not the critics or the "coasts."

Vudu is ad-supported. It's unclear if Walmart plans to add a subscriber component to it, but Taylor said it's more likely the MGM content will be free with ads. Walmart suggested the MGM deal was part of a plan to prop up the struggling Vudu platform ー which only averaged 2 hours of watching time per household in January, far less than Netflix, at 25 hours, and Hulu with 30. But analysts don't expect the retail giant will wade too far into content production.

Walmart bought Vudu in 2010 for a reported $100 million.

For full interview click here.