Walmart to License MGM Content for its Vudu VOD Service

Walmart, which bought video-on-demand service Vudu eight years ago, just inked a partnership with MGM to license family-friendly content. Vudu’s monthly viewer numbers lag behind Netflix and Hulu, the latter controlled by Disney, Comcast, 21st Century Fox and AT&T. Although media outlets reported that Walmart intends to launch a subscription-based streaming video service, sources inside Walmart reveal that Walmart is not doing so, but still hopes to improve its VOD business and target viewers outside big cities.

Reuters reports that Walmart and MGM will announce their partnership today at the NewFronts conference in Los Angeles. Although no financial details will revealed, the companies will describe the first production that Walmart will license. “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,” said Walmart spokesman Justin Rushing.

Vudu currently offers a free ad-supported streaming service, Movies On Us, with about 5,000 movie and TV titles. Vudu itself has 150,000 titles to buy or rent. With the likes of Netflix spending $8 billion per year on programming, “licensing content is a cost-effective strategy.”

Walmart’s initial reason for purchasing Vudu was “to safeguard against declining in-store sales of DVDs … but the video site has not posed a significant challenge to rivals that dominate the segment even though it is preloaded or can be downloaded to millions of smart televisions and videogame consoles.”

According to Parks Associates, “there are currently more than 200 video services that bypass cable providers and stream content directly to a TV, laptop, phone or game console … up from 68 five years ago.”