Walmart’s streaming movie and TV-on-demand service Vudu is rolling out free, ad-supported video.
Vudu, which has been priced on a per-transaction, subscription-free basis (like iTunes), has debuted a video-on-demand service called Vudu Movies On Us.
Vudu is using Telstra’s video platform subsidiary, Ooyala, to manage video ad delivery and monetization for the service, which has more than 100 smart TV integrations across Roku, Chromecast, Xbox and most iOS and Android devices.
“This is Vudu’s first step beyond transactional video and the timing felt right,” said Jeremy Verba, VP and GM of Vudu and Walmart.com’s entertainment properties. “Among our own shoppers at Walmart, more than half of them have said they’re willing to watch ads to have free or discounted access to on-demand movies or TV.”
The projected size of the addressable market for interactive, VOD and addressable TV advertising is projected to approach $700 million this year, suggesting a growing opportunity for ad-supported streaming television. But not all are convinced. Hulu, for instance, recently shifted away from a free tier in favor of a subscription-only model.
Vudu’s on-demand service reportedly has millions of existing customers already, but Verba sees an opportunity to cross-promote the new ad-supported offering to the 140 million shoppers who visit a Walmart store each week.
One way Walmart cross-promotes Vudu’s streaming service today is by allowing customers to join their Vudu and Walmart.com accounts. When a customer scans the back of a DVD or Blu-ray they buy in a store, they get an instant digital download of the title.
As a result, it’s possible to draw links between shopping and viewing behavior.
“There is a strong correlation between Vudu customers and their viewing habits to their propensity to shop both online and visit Walmart stores,” Verba said. “Our customers do see [Walmart] as a platform, to some extent, to buy physical and digital goods both in-store and online.”
Vudu will use Ooyala’s seller platform, Ooyala Pulse, for ad delivery, ad sales and yield management. Ooyala is handling ad bookings strictly on a reserved basis to start because Vudu wants to create a “very curated set of offers.” But deals will leverage some of the automation a buyer would expect in programmatic.
“Advertiser performance and relevance of creative is also super-compelling, and difficult to do across such a range of devices and creative restrictions for high-definition television,” according to Scott Braley, GM of advertising platforms for Ooyala.
Vudu also has an audience data opportunity in pushing further into connected TV.
“The opportunity for publishers such as Vudu is to establish a strong data footprint and targeting capabilities around a premium audience,” Braley said. “It’s something that’s often ceded to the buy side in other channels and, in CTV, there’s a fundamental gap when it comes to a lack of connectivity between those users.”
