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Walmart’s Vudu Orders MGM Shows for Free, Ad-Supported Video Service

Streaming service also plans to launch 'shoppable' video ads in Q4

Walmart, America’s biggest bricks-and-mortar retailer, is taking its first crack at original entertainment.

Vudu, the company’s streaming-video arm, has struck a partnership with MGM under which the studio will create original series based on franchises from its extensive film and TV catalog. Those shows will be exclusively licensed to Vudu for North America, and available on Vudu’s free, ad-supported Movies On Us service.

“We feel it will be a great source of family-friendly, advertiser-friendly content – which won’t be viewable anywhere else,” Scott Blanksteen, Vudu’s VP of product and ad-supported VOD, told Variety.

Vudu plans to commission and license original shows from others, as well. But, Blanksteen said, “We are not going to be a studio. We are not going to have 300 or 400 originals.” Translation: Walmart won’t be spending billions on producing or acquiring exclusive content, at least for now.

Walmart was said to be scoping out the feasibility of a subscription VOD service, but Blanksteen said there’s nothing brewing on the SVOD front for now. “I wouldn’t rule that out for the future, but there are no concrete plans or discussions for that now,” he said.

The first MGM-produced short-form original series for Vudu is slated to debut in the first quarter of 2019 on Movies On Us.

In addition, later this year Vudu is planning to roll out a new “shoppable” video ad format for the Movies On Us AVOD service, which will include the ability for viewers to make purchases from Walmart.com. Vudu expects to provide additional details on the MGM relationship and the shoppable ads during its presentation this Wednesday at the IAB’s inaugural NewFronts West event, which runs Oct. 9-10.

For its first move into original shows, Vudu is working with MGM’s digital team, headed up by Sam Toles, senior VP of digital and new platforms, who reports to Mark Burnett, chairman of MGM’s Worldwide Television Group.

MGM’s film library includes the James Bond, Rocky, RoboCop, Pink Panther, 21 Jump Street and The Hobbit franchises; its TV content library includes “Stargate SG-1,” “Vikings,” “Fargo,” “The Handmaid’s Tale,” “Get Shorty,” “Fame,” “Teen Wolf” and “In the Heat of the Night.” MGM owns the Epix premium network and also operates the MGM HD cable channel and an action-oriented VOD service, Impact.

Currently, Vudu’s Movies On Us offers 3,125 movies free to watch with ads, most of which are older library titles. Those include “Batman” and “Batman Returns”; the first five “Rocky” movies; “Jerry Maguire”; “Apocalypse Now”; “Shaun the Sheep Movie”; “Miss Congeniality”; and “Yentl.” It also has 262 full seasons of TV shows, including “3rd Rock From the Sun,” “Cybill,” “Unsolved Mysteries” and the first two seasons of Denis Leary’s “Rescue Me.”

Vudu launched Movies On Us two years ago, as a complement to its core transactional VOD business, which offers some 150,000 titles to buy or rent. The free viewing side of the house has proven popular, and Vudu is now more aggressively ramping up content and ad-sales for Movies On Us.

“Walmart has seen the success [of the free AVOD service] and is investing in it,” said Blanksteen. “Walmart also likes to save customers money – and there’s no better offer than free.”

By the end of 2018, Vudu’s AVOD service will be the first platform to provide Nielsen Digital Ad Ratings (DAR) across all platforms, a metric intended to be comparable to TV ratings. Vudu has 25 million registered users across the platform; Blanksteen declined to say how many people use Movies On Us.

Vudu offers advertisers the ability to target ads, including based on their shopping history, and touts the appeal of a relatively light ad load on Movies On Us (of about 6-8 minutes of commercials per hour).

Next up, Vudu wants to make ads interactive — and actionable. “We think we’ve finally figured out a way to do shoppable ads in a way that works for advertisers and customers,” said Blanksteen.

The interactive ads from Vudu initially will be in two formats: “send more information,” which will let a viewer request more info about an advertiser via email; and “add to cart,” which will feature a button on the ad to put the advertiser’s product in a checkout basket on Walmart.com. Further down the road map, Vudu expects to add a shop-from-the-TV feature, but it needs to find a way to do that in “an experience people will find not interruptive,” Blanksteen said.

Walmart will be boosting its marketing spending on Vudu and the free Movies On Us service over the next few quarters, according to Blanksteen. “Walmart tends to be a crawl-walk-run company,” he said. “We feel like we are driving in the direction of building a great, on-demand network.”

Walmart acquired Vudu in 2010. Today Vudu is the third-largest transactional VOD service in the U.S. behind Apple’s iTunes and Amazon Video, according to Blanksteen.

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