On Monday, Walmart announced that it had partnered with Metro Goldwyn Mayer the movie studio to create new content for Vudu, its video-on-demand service that the retailer acquired in 2010.
Walmart has looked at propping up the monthly viewership of Vudu that continues to be far below that of other competitors such as Hulu and industry leader Netflix. Hulu is controlled by Comcast, Walt Disney and 21st Century Fox.
Media outlets reported that Walmart was looking at launching a video streaming subscription service that would rival Netflix and enter into production of shows for television that attract more customers.
However, Walmart is not planning a move such as that said company sources. The huge retailer continues to look for different options to increase the business of video-on-demand and offer programs targeting customers living outside large cities.
Walmart and MGM are planning to make a joint announcement in Los Angeles Wednesday at the NewFronts conference and it will include naming the first production under the new partnership which will be licensed by Walmart from MGM.
The focus of the partnership will be on content that is family-friendly that customers at Walmart prefer, said the retailer through a statement.
The financial terms of the deal are not known.
Licensing content is cost-effective strategy during a time when producing new content is costly. As of July 2018, Netflix said it spends $8 billion annually on acquired and original content. The programming budget for Amazon.com for its Prime Video content was over $4 billion, while HBO, which AT&T owns, said it would be spending $2.7 billion in 2018.
Vudu was acquired in 2010 by Walmart to safeguard against falling DVD sales in stores. Walmart made a bet that its customers would continue buying as well renting movies, by moving titles to a new digital library which Vudu would maintain for viewers.
However, the video site has not been a significant competitor to its rivals that are dominating the segment.
Vudu has more than 150,000 titles to rent or buy, while Movies on Us its ad-supported free streaming service has 5,000 movies and television shows.