Walmart Inks Content Deal With MGM

Walmart is partnering with Metro Goldwyn Mayer, the U.S. movie studio, to create content for Vudu, its video on demand service.

CNBC, citing Walmart, reported the retailer has been looking for ways to boost Vudu, which it acquired eight years ago, as its subscriber numbers are far behind Netflix. The idea is to find ways to increase its video on demand business and offer more programs that attract customers living outside of major U.S. cities.

The companies are expected to make the announcement at the NewFronts conference being held on Wednesday (Oct. 10) in Los Angeles, reported CNBC. The name of the first production under the deal will be announced during the conference.

“Under this partnership, MGM will create exclusive content based on their extensive library of iconic IP (intellectual property), and that content will premiere exclusively on the Vudu platform,” Walmart spokesman Justin Rushing told Reuters. The report noted the focus will be on family-friendly content. Terms of the deal were not disclosed.

Licensing is a cheaper way to add content to a video streaming platform instead of spending billions to create original shows and movies. Netflix, for one example, said in July it will spend $8 billion a year to buy and create content. Through the Vudu service, customers can buy or rent 150,000 titles, and a free, ad-supported streaming service called Movies On Us offers an additional 5,000 movies and TV shows, noted the report.

In July, the San Francisco Gate, citing a new report from The Information, reported that Walmart thinks a service that costs $8 a month or less would appeal to its customer base. The retailer is also mulling a free service that would be supported by advertising dollars. The report noted at the time that if Walmart charged $8 a month, it would be lower than the $8.99 a month that Amazon Prime Video charges, and far less than the $14 monthly fee that Netflix customers pay for its high-end subscription tier.