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Walmart Sharpens Digital Edge, Plans to Enhance Vudu Services

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Walmart Inc. (WMT - Free Report) is apparently eyeing a collaboration with Metro Goldwyn Mayer (or MGM) to boost viewership of Vudu, which was acquired in 2010 in response to sluggish DVD sales.

Sources revealed that this omni-channel retailer is planning to team up with movie studio MGM to produce content exclusively for Vudu, which is its video-on-demand service. Per the deal, content created by MGM will be more family-oriented, and will premiere solely on Vudu. Though Walmart acquired Vudu roughly eight years back, the same hasn’t been as successful as other subscription-based services like Netflix (NFLX - Free Report) , Hulu LLC or Amazon Prime, among others, that offer a wide range of attractive content.

While rumor has it that launching a subscription-based streaming video service is Walmart’s agenda, the latter has not confirmed any such news. Instead, the big box retailer is looking for ways to strengthen its video-on-demand business and come up with programs that can increase its viewership count. Partnering with MGM is also one such strategy, as licensing content is likely to be more cost-friendly compared to creating original content.

However, industry experts believe that Walmart still has a lot of work to do to catch up with biggies like Amazon (AMZN - Free Report) and Netflix, which are making heavy investments in the video-streaming arena. Well, making efforts to counter e-commerce king Amazon is not new for Walmart.

Walmart has always looked forward to introducing smart and digitally compatible shopping tools across stores and online. These include features like pickup kiosks, same-day delivery services and easy payment solutions. Also, Walmart’s strategic deal with Microsoft (MSFT - Free Report) is likely to strengthen its digital capabilities through advanced cloud solutions. Moreover, the company has been boosting e-commerce presence through partnerships with Flipkart, Jet.com, Bonobos, ModCloth and many more. Such moves indicate that Walmart has been constantly striving to bolster digital presence and stand up to its bold ambitions to evolve as a leading omnichannel retailer.

Backed by such endeavors, Walmart’s U.S. e-commerce sales soared 40% in the second quarter of fiscal 2019, much better than a 33% rise reported in the first quarter. E-commerce sales improved on the back of enhanced online assortment with 1,100 new renowned brands and increased grocery pickups. These factors keep management encouraged about achieving 40% U.S. e-commerce sales growth in fiscal 2019.



In fact, Walmart’s robust growth initiatives have kept investors optimistic about this Zacks Rank #3 (Hold) stock that has gained 9.2% in the past three months compared with the industry’s rise of 8.7%. For now, let’s see if Walmart’s talked about partnership with MGM can actually take shape and enhance Vudu’s services. 

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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