Walmart Enters the Streaming Wars
Retail giant takes shot at Amazon with Paramount+ deal
Walmart (yes, Walmart) announced Monday that it has reached a deal with Paramount to offer the ad-supported version of the Paramount+ streaming service as a free perk to Walmart+ subscribers.
The move comes as Walmart looks to compete for more of Amazon’s market share. Walmart+ is Walmart’s answer to Amazon Prime, where members get unlimited free deliveries of groceries and other household items, mobile scanning options in stores and gas discounts. The Walmart/Paramount partnership is the latest streaming partnership deal to be announced this month following the news that HBO Max and Discovery+ will merge sometime in 2023.
Beginning in September, Walmart+ members will be able to access Paramount+ on the ad-supported “Essential Plan” at no extra charge to their Walmart+ subscription. This plan doesn’t include live coverage from local CBS stations.
“With the addition of Paramount+, we are demonstrating our unique ability to help members save even more and live better by delivering entertainment for less, too,” senior vice president and general manager of Walmart+ Chris Cracchiolo said in a statement. The two companies already have a lengthy partnership. Walmart sells merch for Paramount-owned properties like Spongebob Squarepants and Paw Patrol, and Paramount has had a small team based in Arkansas near Walmart headquarters.
Currently, Paramount+ is home to original shows like Star Trek: Strange New Worlds, Beavis and Butt-Head Do the Universe and Halo and CBS network shows. It will eventually be the streaming home of Top Gun: Maverick, as well.
A Walmart+ subscription is $12.95 a month or $98 a year, and the “Essential Plan” of Paramount+ is $4.99 a month — a lower price point than Amazon Prime’s rate of $14.99 a month or $139 a year and $8.99 a month for Prime Video.
Price points will not increase for Walmart+ with this new partnership. Nothing changes for existing Paramount+ subscribers who don’t have a Walmart+ subscription, either, but Paramount won’t give them free access to Walmart+.
Analysts are saying this partnership will help Paramount+’s subscription numbers, but this deal is all about Walmart’s race with Amazon. This is Walmart’s second try at hitting it big with streaming. Remember Vudu? Walmart sold that ad-supported streaming service to Fandango in 2020 after acquiring it in 2010.
Paramount reported a total of 43.3 million global Paramount+ subscribers on its second-quarter earnings call. Walmart hasn’t disclosed how many Walmart+ subscribers there are, but analysts put that number anywhere between 11.5 million and 32 million subscribers. For context, Netflix and Disney each have more than 220 million subscribers, even after Netflix’s bad year, and Amazon Prime boasts more than 200 million members.
Come September, Paramount+ automatically gets anywhere from 11.5 to 32 million more subscribers, but no other perks. Moving forward, Walmart presumably gets some advertising on the platform (it didn’t release terms of the deal, but it would be stupid of Walmart to not advertise itself on Paramount+) and gets to tout Paramount+ in its subscription materials. Paramount+ gets…a lot of Tom Cruise movies and presumably some financial safety. This partnership will see benefits for both parties, but it’s Walmart that really stands to gain.
This deal highlights just how hard it is to make it as a streaming service nowadays. Netflix made its mark by introducing binge-watching, and Hulu got its start as a place to watch network TV a day after it aired. But the streaming boom is over, as evidenced by the consolidation of Disney+, Hulu and ESPN+ and the coming HBO Max/Discovery+ merger. America’s largest supermarket chain striking a deal with a streamer would have been shocking five years ago, but now, it’s just the price of doing business. It’s increasingly difficult for a new streaming service to make its mark before folding or getting gobbled up by another corporation (Quibi had a lot of problems, and had the misfortune of debuting in spring 2020, but at least it was different).
The Walmart/Paramount deal deosn’t mean Walmart owns Paramount now, but that’s not entirely out of the question in the future. As corporations continue to consolidate and consumers continue to lose more choices, the business model for streaming TV has looped back around to what’s been working for cable and network TV since the dawn of the medium. Can’t wait to see the streaming service partnership Target comes up with.