Since buying Vudu, a movie rental/purchase digital business, Walmart has been constantly looking to evolve its D2C (direct-to-consumer) connection as an in-store retailer into the world of advertising.
In 2016, six years after buying Vudu, Walmart started a free, ad-supported TV network streaming service. Timing was good here -- considering other digital streaming services also launched around the same time.
So why reports of a possible sale? Walmart isn’t exactly saying as much; reports claim it is “open” to discussions with partners, both existing and new.
Many over-the-shoulder views by Walmart executives must be at digital retail competitor Amazon, which not only has started many similar video services, including an a la carte service of TV networks, but has one key revenue contributor: advertising. This year, Amazon is estimated to earn $14 billion in ad revenue.
Free, or near-free, streaming services seem to the model going forward. NBCU has been mulling a free, ad-supported option for its upcoming live, linear TV streaming service Peacock.
Now think about the near-free streaming services: Apple TV+ at $4.99/month; Disney+, at $6.99/month. That would seem like pennies for consumers, considering the comparison to traditional, legacy streaming pay TV providers -- cable, satellite and telco -- now at around $100 to $125/month.
Of course, this isn’t a simple equation.
Expectations are consumers will cobble together a number of different video services -- on-demand video services; live, linear TV networks; as well as other specialty video digital subscriptions services. All this could boost consumers' monthly entertainment costs to near those legacy platforms.
Add in this factor: What will happen in one, two or three years when Apple TV+, Disney+ and HBO Max do what all consumer products/services eventually do -- raise increases? It is inevitable, given the billions in start-up costs.
Then there is the growing share of voice needed to stay present in the marketplace. Just ask Sony’s Playstation Vue about its recent announcement to shutter.
Perhaps all these future calculations -- as well as competing with a wide variety of powerful consumer entertainment companies, not just big ecommerce corporations -- has Walmart rethinking its strategy. Entertainment consumerism on this fierce competitive retail level may be a bridge too far.
Or, at best, find another bridge.