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NEW YORK, Oct 8 (Reuters) – Walmart Inc. announced Monday it has partnered with US film studio Metro Goldwyn Mayer to create content for its Vudu video-on-demand service, purchased by the retailer eight years ago.
Walmart has been trying to support Vudu's monthly audience, which remains well below competitors such as Netflix Inc and Hulu LLC, controlled by Walt Disney Co, Comcast Corp and Twenty-First Century Fox Inc.
The media announced that Walmart, based in Bentonville, Arkansas, was looking to launch a subscription-based video streaming service to compete with Netflix and try to produce TV shows to attract customers.
But company sources told Reuters that Walmart was not considering such a move and that the company does not intend to spend billions of dollars to produce or acquire exclusive content from now on. The retailer, however, continues to look for solutions to strengthen its video-on-demand business and to offer programs for customers outside of major cities.
Walmart and MGM will make the announcement at the NewFronts conference in Los Angeles on Wednesday and unveil the name of the first production under the partnership, which Walmart will license to MGM.
"As part of this partnership, MGM will create exclusive content based on its extensive library of intellectual property rights (IP), which will be premiered on the Vudu platform," spokesperson told Reuters. from Walmart, Justin Rushing.
The focus will be on family-friendly content that Walmart customers prefer, Rushing said.
These programs will only be licensed for Vudu for North America for a period of time, and will be available on Vudu's free, Movies On Us, advertising-funded service. Vudu will also sponsor and license original programs from other sources.
The first original Vudu series, produced by MGM, is expected to debut in the first quarter of 2019 on Movies On Us.
The financial terms of the operation were not disclosed.
Licensed content is a profitable strategy at a time when the production of original content has become expensive. In July, Netflix announced spending $ 8 billion a year on original and acquired content. The programming budget of Amazon.com Inc. for Prime Video has grown to more than $ 4 billion, while the American HBO broadcaster, owned by AT & T Inc., has announced an expenditure of 2.7 billions of dollars this year.
Walmart also plans to roll out a new video ad format for Movies On Us, which will allow viewers to shop on Walmart.com.
Walmart acquired Vudu in 2010 to protect against the decline in in-store DVD sales. Walmart's customers were still betting on buying and renting movies and transferring their titles into a digital library, which Vudu would create and update for viewers.
But the video site has not posed a major problem to competitors who dominate this segment, even if it is preloaded or it can be downloaded to millions of smart TVs and video game consoles. .
Vudu offers 150,000 titles to buy or rent, while its free, advertising-supported streaming service, called Movies On Us, includes 5,000 movies and TV shows.
There are currently more than 200 video services that bypass cable providers and broadcast content directly to a television, laptop, phone, or game console. This represents an increase of 68 services five years ago, according to a market study, Parks Associates. (Report by Nandita Bose in New York, edited by Peter Cooney)
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