Walmart+ challenges Amazon Prime with new Paramount+ perk

In a move that should boost ad revenues for streaming service Paramount+, Walmart and Paramount have reached a deal to include the ad-supported “Essential” tier in the retailer’s Walmart+ membership program. Walmart has felt increasing pressure from leading ecommerce giant Amazon, whose Amazon Prime membership offers a bevy of perks, including two-day shipping, Prime Video, Prime Music, cloud storage for photos, a year of GrubHub+, and more.

The ad-supported tier of Paramount+ costs $4.99 per month but will be included in Walmart+ without the retailer raising prices ($12.95-per-month or $98 annually). That’s significantly cheaper than Amazon Prime, which earlier this year increased its annual membership to $139. Walmart has not disclosed how many Walmart+ subscribers it currently has, but most estimates place it in the range of 11-16 million, which is just a fraction of Amazon Prime’s 200 million.

Similarly, Paramount+ is a good deal behind its competitors – the company recently reported 43.3 million subscribers, which is around a fifth of the subscriber base of giants like Netflix and Disney+. Teaming up with Walmart should expose Paramount+ to a wider audience and could accelerate membership while increasing ad dollars. As noted by CNBC, executives at Paramount+ “wanted to launch exclusively [with Walmart] to get full marketing attention, according to a person familiar with the deal who was not authorized to speak publicly about it.”

When the Wall Street Journal first broke the news, the publication noted that Walmart had also been talking with Disney about Disney+ and Comcast about Peacock. Interpret’s data does show that a greater number of Walmart shoppers use those two streaming platforms compared to Paramount+. But it seems that Walmart and Paramount+ were ultimately a better fit for each other – or at least better able to broker a deal that likely weighs not just pricing, but also access to data and control of ad inventory.

The deal is also a natural extension of the two companies’ previous partnership on branded products. Walmart has been offering merchandise based on Paramount franchises such as PAW Patrol, Teenage Mutant Ninja Turtles, and SpongeBob. Access to these kid-friendly shows and hit movies like Sonic the Hedgehog 2 through Paramount+ should resonate with Walmart shoppers who have families – an advantage Amazon has had with its Kids offering via Prime Video.

According to Interpret’s VideoWatch data, around 16% of US consumers subscribe to Paramount+, with both Amazon and Walmart shoppers even more attached to the streaming service at 19% and 18%, respectively. As exposure to Paramount+ grows among the Walmart base, it’s likely that Paramount+ will see greater membership among those consumers just as Prime Video does with Amazon shoppers. Whether the addition of Paramount+ will be enough to help Walmart catch up with Amazon Prime, however, remains to be seen.