NBCUniversal in Talks to Buy Walmart’s Vudu Streaming Service

The Wrap

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Comcast’s NBCUniversal is in talks to Vudu, Walmart’s free ad-supported streaming service, on the eve of the company’s planned spring launch of its own new streaming service, Peacock.

The financial terms of the deal were not clear, and individuals with knowledge of the negotiations told the Wall Street Journal that the discussions may not result in any deal.

Vudu, which Walmart acquired for $100 million-plus in 2010, has has offered a free ad-supported streaming service to its users since 2016, along with the option to buy and rent movies and shows. Those services, installed on 100 million devices, could be seen as a complement to Peacock — which will feature both ad-supported and ad-free subscriptions when it begins its rollout on April 15.

An NBCU spokesperson declined to comment to TheWrap on the potential deal; a rep for Walmart declined to comment beyond saying the company is “constantly having conversations with partners.”

*Also Read:* Fox Looks at $500 Million Deal to Buy Tubi, The Ad-Supported Streaming Service (Report)

The news came out soon after reports circulated that Fox is looking to spend around $500 million to acquire the ad-supported service Tubi, which offers thousands of shows and movies. In December, Tubi passed the 25 million monthly active user mark.

The interest in these smaller streaming services has increased as the AVOD market has grown exponentially. Ad revenue from AVOD hit $3.8 billion last year, according to Magna Global estimates, marking a 39% increase from 2018. And in 2020, the industry is expected to increase another 31% to hit $5 billion in sales. It’s worth pointing out that’s still well short of the $70 billion advertisers spend on old school TV ads each year.

*Also Read:* Vudu's 'Mr Mom' Trailer: 'The Kids Are Still Alive,' So That's Good (Video)

But in an interview with TheWrap last month, Xumo CEO Colin Petrie-Norris explained why he thinks AVOD services are drawing more viewers, even as major SVOD companies continue to grab more subscribers.

“There is an infusion of new [paid] streaming services, and many customers are asking if paying for 4 services — Disney+, Amazon, Netflix, Quibi — is for them. There’s this question of, ‘what is the right number of services?’ And the gateway to adding more paid services is getting higher,” Petrie-Norris said. “Adding the first 1,2 or 3 is fine, but on the 4th, consumers — I believe — are asking questions. Contrast that with AVOD, where I don’t even need to give you an email address to sign up for Xumo. If you stay or come back, it’s purely on the basis of the quality of the content and the value we’ve created for you. We’re asking you to watch some ads, but we’re providing great content.”

Tim Baysinger contributed to this report. 

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