Comcast and Walmart May Collaborate on Smart TVs
Discussing a Partnership
Comcast (CMCSA) and Walmart (WMT) are discussing a plan to collaborate on developing and distributing smart TVs. This partnership could have important advantages for both companies.
Comcast is working to become a destination for streaming apps, not just TV channels. If its software was installed in Walmart TVs, it could become a part of millions of American living rooms and compete with big names in the smart TV landscape, like Apple (AAPL), Amazon (AMZN), and Roku (ROKU). Comcast would also be able to promote its new streaming service Peacock through the smart TV software.
Responding to Lower Demand for Cable TV
Comcast’s cable TV business has been shrinking recently, and the company needs a way to cement itself in the world of streaming. Since the beginning of 2020, Comcast has lost 1.2 million cable TV subscribers.
Breaking into the streaming app landscape could be challenging for Comcast. Currently, Amazon and Roku together control about 70% of the US streaming-media device market. Google (GOOGL) has recently made a push into the market with the Google TV. Despite competition in the market, Comcast believes it has advantages over the companies currently dominating the sphere because of the large library of content under its NBCUniversal umbrella and because of cable technology investments it has made.
Under the potential agreement, Walmart would promote the TV sets and would receive a recurring share of Comcast’s revenue. The TVs would likely be manufactured by a third party. The retail giant already has an agreement with Roku where it sells smart TVs with Walmart branding. It might use the same strategy with Comcast TVs.
Walmart recently took aim at Amazon with its new Walmart+ membership program. Gaining more influence in the smart TV landscape would help Walmart compete with the ecommerce superpower in a different way. Talks between Walmart and Comcast are still very preliminary, but leaders in the retail industry, the tech industry, and the entertainment industry will be eager to see how the two companies move forward.
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