Will Walmart's streaming approach appeal to heartland cord cutters?

When does a trend become a "thing" with tangible implications both for consumers and businesses? Usually, when a mainstream mega-player from beyond a category vertical takes notice and plunges into the market – as is the case with Walmart's reported plans to take on the likes of Amazon and Netflix and enter the booming streaming media market.

Two years ago, Walmart launched a movies-only streaming service under the clunky name Vudu Movies On Us but is unclear whether the rumored $8-per-month new rival service to Netflix and Amazon will appear under the Vudu brand or not. While the logic behind the move is clear, success is by no means a given – particularly if Walmart tries too hard to emulate Netflix and Hulu. Much will depend on Walmart's ability to capitalize on its appeal to the heartland and turn those customers into an audience.

If Walmart pitches on price alone, it will have nowhere to go once rivals match or better that $8 a month – as someone surely will. Is $8 a month even viable long-term?

Netflix, Hulu and Amazon Studios have built their base on a trendier cultural offering than is associated with Walmart – inviting comparison with the niche appeal of Whole Foods. Although those streaming services are now edging into the mainstream, there would appear to be a gap for less urban, more practical lifestyle-based content, particularly in Walmart's stomping ground, the heartland.

In rural areas only 28% subscribe to cable, as opposed to 41% in suburban and urban areas, per Kantar data. Price is consistently cited as the chief driver for cord-cutting. Consumers are rejecting both hardware costs (set top-boxes, dishes) and expensive bundles containing unwanted channels. Meanwhile, younger "cord nevers" are less attracted to traditional sports bundles that tie boomers and others to cable or satellite.  

All signs point to Walmart speeding up the cord-cutting trend in rural areas, currently running at a similar rate to the urban coasts.

The latest eMarketer estimates suggest 50 million people will have dropped their cable or satellite TV subscriptions by 2021 – that's 20 million more than today and, tellingly, 10 million more than estimated just last year. The bad news for Comcast, Cox and Charter shareholders may prove to be a balm for Bentonville.

If Walmart can truly deliver content that more accurately mirrors the lives of heartlanders, the streaming prize is undoubtedly large enough to justify its entry to an already cut-throat market.

 

Kelly Mertesdorf is group strategy director at Bailey Lauerman Los Angeles. Prior to joining Bailey Lauerman, Mertesdorf developed the content division of a media-tech start-up. Before that, she was a lead planner at Deutsch, McKinney and TBWA\Chiat\Day where she worked on a variety of brands including Samsung, Nationwide, Coca-Cola and Taco Bell.

Mertesdorf has a M.S. from the VCU Brancenter and carries a B.A. in Journalism and Mass Communications from the University of North Carolina at Chapel Hill.

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