Walmart Inc. WMT -0.11% is exploring a subscription video streaming service that would seek to challenge Netflix Inc. and Amazon.com Inc. AMZN 0.51% by offering programming that targets Middle America, according to people familiar with the plans.
Planning is still in the early stages and Walmart hasn’t given the project a greenlight, the people said. But a decision to move forward could come by late summer or early fall, according to one of these people.
The retail giant would be late to the streaming subscription video business, an increasingly crowded market that also includes Hulu and AT&T Inc.’s HBO.
Walmart is working with veteran television executive Mark Greenberg on the potential service, which could include a lower-priced monthly subscription than those offered by Amazon and Netflix, according to people familiar with the plans.
Walmart is considering programs that target consumers who live outside of large cities, said two of these people.
Mr. Greenberg, who last year left his role as chief executive of Epix, a pay-television channel, has been advising Walmart for several months as it weighs launching its own direct-to-consumer streaming service, the people said. He also held senior positions at pay channels Showtime and HBO.
If it proceeds, the subscription-based media venture would be separate from Vudu, the online movie-streaming service Walmart bought in 2010, the people said. Vudu, which allows users to buy or rent individual films, is widely available on televisions and streaming devices like Roku, but hasn’t attracted the usership of rivals. Among U.S. households that streamed video on a television at home in April, 73% watched Netflix, 50% YouTube, 36% Hulu, 28% Amazon Prime Video and 13% Vudu, according to comScore Inc.
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News of Walmart’s potential programming strategy was earlier reported by The Information, a technology news website.
Walmart could license existing content rather than produce original programming, though establishing its own brand of original content could be key to the success of a Walmart streaming service, as it has been for Netflix and others, because acquired shows can be readily available elsewhere.
Producing original content would be a costly venture. The aggressiveness of Netflix has driven up prices for talent for everyone. This year, Netflix has indicated it is spending $8 billion on original and acquired content. Amazon’s programming budget is north of $4 billion while HBO will spend $2.7 billion this year.
Programming, two people close to the project said, could be “middle of the road” and aimed at Walmart’s core shoppers away from the coasts. The ratings success of the brief return of “Roseanne” on Walt Disney Co.’s ABC last spring indicated that there is a large audience not being served by most programmers.
“They’re catering to that Americana base,” one person said.
Write to Joe Flint at joe.flint@wsj.com, Erich Schwartzel at erich.schwartzel@wsj.com and Sarah Nassauer at sarah.nassauer@wsj.com
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