Walmart Steps Up its OTT Sales Efforts

Walmart  wants cord-cutters. And the retail behemoth will make it easier for them to buy everything they need, including access to the Walmart-owned Vudu over-the-top programming package, from a special promotional section in 2,100 stores nationwide.

In a neat exercise of vertical integration clout, Walmart is encouraging makers of all video-streaming hardware it sells to include Vudu service in their packages.

Walmart began installing exhibits of its new OTT "story" in November. The retailer is setting up special promotional displays within the electronics sections to educate its price-conscious customer base about how streaming media players (Roku, Netgear, Sony and others) work in connection with OTT services. A Walmart spokesman pointed out that the company has sold such devices for more than a year.

The display's emphasis on Vudu, which Walmart acquired in mid-2010, suggests that the retailer is escalating its content presence. The current Vudu content lineup includes recent theatrical films, such as Crazy Stupid Love,Bad Teacher and Super 8 -- not great hits, but popular titles nonetheless.

Vudu's library offers the usual array of kids, adventure, comedy and other movies, plus TV shows from CBS, Showtime and other sources. Vudu's "Next Day Air" TV section features TV shows such as CSI, PanAm, Gossip Girl and NCIS.

Details about the streaming-video promotion surfaced during late November, according to a Wall Street entertainment analyst. A Walmart spokesman insisted to Multichannel News that the streaming video promotion is not intended to encourage cord-cutting since access to the services via the OTT reception devices still requires a customer connection to a cable or telco data delivery system.

He also said that Walmart is "encouraging but not requiring" that all video-streaming devices should include access to Vudu, which will insert a Walmart presence into the after-sale relationship. The new retail sections are also expected to demonstrate how streaming video programs can be accessed via videogame consoles, such as Sony's PS3, and tablets, such as Apple's iPad.

According to the financial analyst who tracks entertainment, Walmart's new OTT section will feature over-the-air TV antennas, with information about how to connect a flat-panel TV receiver to pick up local broadcast TV channels, including sports and other shows that are not (yet) available via Internet-delivered sources. Walmart's spokesman said that over-the-air antennas will be available in the electronics department, but not specifically part of the video streaming promotional area.

It is not clear whether the Walmart promotion will also include social networks and other TV apps that are part of the new video experience that the retailer is pushing.

In July, Walmart completed the integration of Vudu into, which enabled customers to rent or buy Vudu releases directly from the retailer's website. Altogether VUDU offers more than 45,000 titles, including what Walmart calls "the largest library of HD content."

Walmart, which has been a game changer in the retail industry for decades, now poses an even more serious challenge to the multichannel video distribution business. The retailer's' devoted customers - and its notoriously aggressive pricing - have boosted the company as the primary consumer electronics sales rival to Best Buy.

Its OTT promotion will be an important benchmark in the cord-cutting evolution.

Gary Arlen is president of Arlen Communications LLC in Bethesda, Md., and a long-time interactive TV enthusiast. Reach him at Read his  blog, As I Was Saying here.

Gary Arlen

Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.