Analyst details Walmart’s path to streaming success

Walmart (WMT) bundles a streaming service into its Walmart+ membership program.

According to the Wall Street Journal, the major retailer has officially partnered with Paramount Global (PARA) to offer subscription services like Paramount+ and Showtime to Walmart+ members. The company was also in discussions with Disney (DIS) and Comcast (CMCSA).

The move underscores a strategic shift as Walmart seeks to push ahead in the retail wars and more adequately compete with Amazon (AMZN), which operates its own streaming service, Amazon Prime Video.

“It’s survival of the fittest right now,” Lopez Research’s Maribel Lopez told Yahoo Finance Live in a new interview (video above).

“Content is what creates rigidity in today’s world, and Walmart lacks it today,” the analyst continued, though she cautioned against Walmart creating its own content. original, citing exorbitant production costs and the “enormous” amount of initial capital required.

“If Walmart wants to contain its margins and have a content department, it really needs to think very seriously about being a conduit for other content providers,” she advised, calling it a “safer game.” go to market with other platforms to make the subscription-side offer “more compelling”.

She added that the move would also help differentiate Walmart at a time when consumers are increasingly fickle about which streaming services they subscribe to.

According to data from subscriber measurement firm Antenna, cited by The Wall Street Journal, around 19% of subscribers to premium services – which include Netflix (NFLX), Hulu, Apple TV+ (AAPL) HBO Max (WBD), among others – canceled three or more subscriptions in the two years to June, compared to just 6% in the two years to June 2020.

Walmart “must do it right”

CHINA – 2022/07/25: In this photo illustration the United States multinational department store Walmart logo seen displayed on a smartphone screen. (Photo Illustration by Budrul Chukrut/SOPA Images/LightRocket via Getty Images)

Walmart+ membership, which currently costs $12.95 per month, includes free shipping on orders, fuel discounts, plus a free six-month subscription to Spotify Premium (SPOT).

The company previously bought a streaming service called Vudu but, amid high costs and increased competition, the platform was sold to Comcast’s Fandango in 2020.

“This isn’t Walmart’s first rodeo in terms of content,” Lopez reiterated. “This time they have to get it right.”

Editor’s note: This article has been updated to reflect that Walmart has selected Paramount Global as its Walmart+ streaming partner.

Alexandra is a senior entertainment and food reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com

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