For Walmart, a streamer deal could bolster its growing ad biz

Walmart is asking the tough questions: Is its annual membership worth more if you throw in a few episodes of The Office? Uh, what about The Mandalorian?

On Tuesday, the New York Times reported that the retail giant was having discussions with the likes of Paramount, Disney, and Comcast (which owns NBCU and its streaming service, Peacock) about adding a streaming service to its membership program, which costs $98 per year.

• So far, reporting indicates that these relationships are in the “still dating” phase, and nothing has been decided in terms of what a deal might look like.
• Rachel Nipper, Walmart’s director of corporate communications, told us it “will not be commenting on speculation.”

These deals aren’t new: Almost one-fifth of Disney+’s early subscribers came from a partnership with Verizon back in 2019 that provided certain customers a free year of the streamer.

Still, it’s clear that the addition of a streaming platform would make Walmart a more direct copy of competitor to Amazon, which operates Prime Video, a subscription video on-demand service (SVOD), as well as Freevee, its advertising video on-demand (AVOD) offering. (We apologize for the acronyms.)

Walmart has a ton of shopper data that it’s using to bolster its fairly new advertising business.

That data is already being used for targeted online advertising. Partnering with a streamer could potentially give Walmart even more ways to reach its customers, explained Ana Milicevic, a digital marketing consultant and co-founder of Sparrow Advisers.

• If Walmart wanted to close the window between orders, it could serve an ad for a discount or a promotion. Its DSP already includes CTV inventory via The Trade Desk, but a direct deal with a streamer could cut out potential friction, Milicevic said.
• In exchange, the streamer would likely be able to reduce customer-acquisition costs.

On its own, Walmart+ is still fairly one-dimensional, Neil Saunders, managing director of retail at GlobalData, told us.

• Its current offerings—like free shipping, discounts on gas, and a six-month Spotify trial—likely aren’t enough to rope in consumers who don’t already shop at Walmart’s website or buy gas elsewhere, he said.
• He added that bundling streaming could be an attempt to not only retain existing members but also grow Walmart’s membership base by providing better value for the money.

“In terms of moving the dial, I’m less convinced about that. And in terms of competing with Amazon, I’m entirely unconvinced about that,” he said.

One key difference between Amazon and Walmart is that the former creates its own content on a dedicated platform, whereas the latter would simply be doing a “very pale imitation” of that by offering a separate streaming service as a perk to members, Saunders said. In order for companies to truly compete with Amazon, he said, they need to make more ambitious moves.

“If you really want to take on Amazon, you’ve got to be bold,” Saunders said. “Go and buy Hulu and then use all that content and give people that as part of the subscription. That would be something I would see and go, ‘Wow, they’re really taking this seriously.’”

Read on: In January, Marketing Brew’s Kelsey Sutton looked at why streaming services use partners to stay competitive.