Walmart inks streaming deal with Paramount+

Walmart has signed a deal with Paramount to offer subscribers of Walmart+, its subscription membership program, access to the ad-supported tier of Paramount's subscription streaming service, Paramount+, for free.

Why it matters: As streaming becomes more competitive, entertainment giants are looking for ways to bundle their services to attract more users — a tactic long championed by cable companies.

• Paramount+ has 43.3 million paid subscribers globally. Its parent company, Paramount Global, has 63.7 million subscribers globally across all of its streaming services, which also include Showtime, BET+ and Noggin.
• Rival services like Netflix and Disney each have more than 220 million subscribers globally across all of their streaming tiers and services.

Details: The deal gives Walmart+ subscribers access to Paramount+'s $4.99 ad-supported tier, so long as they subscribe to Walmart+.

• Beginning this September, Walmart+ subscribers will get access to the ad-supported tier of Paramount+, which costs $4.99 monthly, at no additional charge. Walmart+ will continue to cost subscribers $12.95 a month.
• “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," said Chris Cracchiolo, senior vice president and general manager of Walmart+, in a statement.
• News of the partnership was first reported by The Wall Street Journal. The New York Times reported last week that Walmart was in talks with several streamers about potential distribution deals.

Be smart: Paramount and Walmart have long had a commercial relationship.

• Merchandise for Paramount's family-friendly titles like Paw Patrol and SpongeBob Squarepants is available in Walmart stores.
• Paramount has a team of 13 based in Bentonville, Arkansas, Walmart's headquarters, that was established over a decade ago to bolster the relationship between the two companies across licensing and business intelligence, per a spokesperson.

The big picture: Ever since Walmart acquired e-commerce company Jet.com in 2016, it has done everything it can to compete with Amazon, including creating its own third-party marketplace for digital sellers, launching a membership program and investing in media services to attract new subscribers.

• Analysts estimate Walmart+ has anywhere between 11.5 million and 32 million subscribers, according to various analyst estimates — a far cry from the more than 200 million Amazon Prime subscribers globally.
• Media partnerships have long been part of Walmart's efforts to attract more people to its digital offerings. It currently offers six free months of Spotify Premium with a Walmart+ subscription. The company formed a joint venture with the video company Eko in 2018.

What they're saying: “The thing that impresses me about Walmart is that they were not content to just stay Walmart,” said Howard Meitiner, a managing director at restructuring advisory firm Carl Marks Advisors.

• “They realized that if they were to fall into the trap department stores fell into, and remained the same, they would fall into decline,” he said.

Yes, but: Walmart has not been successful incubating its own media properties, which is why partnering with third-party entertainment companies makes sense for the retail giant.

• The company sold its ad-supported video service called Vudu to Fandango, the digital movie ticketing company owned mostly by NBCUniversal, in 2020.

Bottom line: The streaming era was supposed to give consumers more choice, but increasingly, streaming bundles are resembling the bloated cable bundles that they sought to replace.

What to watch: Analysts predict there will be more streaming collaborations and partnerships across the retail landscape in the coming months.