Walmart partners with MGM to boost video-on-demand service Vudu
Walmart Inc (N:WMT) said on Monday that it will cooperate with the US film studio MGM to create a video-on-demand service, VUDU, which retailer bought eight years ago.
Wal-Mart has been – always looking to support VUDU’s monthly ratings, which is still much lower than competitors like Netflix (O:NFLX) and Hulu LLC, which is controlled by Disney (N:DIS), Comcast Company (O: CMCSA) and 21st Century Fox (O: FOXA).
The media agency reported Bentonville, Arkansas, and the company hopes to launch a video streaming subscription service for Netflix’s rivals who made the move to make TV shows to attract customers.
According to Reuters, Wal-Mart did not plan to take such action. However, the retailer continues to look for options to enhance its video-on-demand business and offers plans for customers living outside of the big city.
Wal-Mart and MGM will announce the news at the NewFronts conference in Los Angeles on Wednesday. It will include the name of the first production under the partnership and Wal-Mart will obtain a license from MGM.
“In this collaboration, MGM created an exclusive content based on their widely representative IP (intellectual property) library, and the content will be exclusively premiered on the VUDU platform,” Wal-Mart spokesperson Justin rushed to tell Reuters.
Rushing said the focus will be on family-friendly content that Wal-Mart customers like.
The financial transaction of the transaction has not been disclosed.
Licensing content is a cost-effective strategy when making original content has become a costly adventure. As of July, Netflix said it spends $8 billion a year on original and acquired content. Amazon’s (OR:AMZN) Prime Video program budget exceeds $4 billion, while HBO Broadcasting, a US-based AT&T company (N:T), said it will spend $2.7 billion this year.
Wal-Mart acquired Vudu in 2010 to prevent a decline in in-store sales of DVDs. Wal-Mart bet customers will continue to buy and rent movies and transfer their titles to digital libraries, and Vudu will create and maintain these libraries for viewers.
But video sites haven’t brought rivals to rival segments, even though it’s a significant challenge for preloading or downloadable to smart millions of TV and video gaming devices.
VUDU offers 150,000-level titles to buy or rent, while STI’s free, ad-supported streaming service, known as the movie, includes 5,000 movies and TV shows.
There are currently more than 200 video services that bypass cable providers and transmit content directly to TVs, laptops, mobile phones or gaming consoles. According to market research firm Parks Associates, this is an increase from 68 years five years ago.