Walmart (WMT 1.51%) is adding Paramount Global's (PARA 0.67%) video streaming to its Walmart+ member loyalty program to better compete against Amazon Prime.

Members will get access to the Paramount+ Essential Plan, an ad-supported version of the streaming service, a nice added benefit that joins discounts on gas and music, and a much better option than launching a new in-house streaming service.

Whether it moves the needle for either company is another matter. Consumers don't sign up for Amazon Prime because of streaming, and they won't sign up for Walmart+ just because it added video streaming.

Woman standing in front of numerous video screens.

Image source: Getty Images.

Peak streaming video

Walmart has been down this road before without success. It tried a DVD rental business in the early 2000s that it eventually sold to Netflix. Walmart later bought Vudu, which also failed to gain any traction, leading Walmart to sell it to Comcast-owned Fandango in 2020.

Maybe the third time will be the charm because it's merely partnering with Paramount to provide access to its service. But because we may be arriving at peak streaming potential anyway, it might not even do much to help Paramount achieve its goal of hitting 100 million subscribers by 2024.

While Disney (DIS 0.11%) just added 14.4 million new subscribers to its Disney+ service this past quarter, only 100,000 came from the U.S. and the entertainment giant cut the total global number of subscribers it expects to have by the end of fiscal 2024. Rather than the 230 million to 260 million it previously estimated, Disney now forecasts it will have between 215 million to 245 million.

Netflix, of course, also lost nearly a million subscribers last quarter and got crushed by the revelation.

Research firm MoffettNathanson says only 2.7 million new customers were added to streaming services in the U.S. in the second quarter, the lowest quarterly increase since the pandemic fueled a surge in consumers signing up for streaming. 

It's why the idea Walmart will help Paramount+ reach its goal of 100 million subscribers by 2024 seems a bit overblown.

A well-worn road

Walmart ultimately chose the low-cost, low-risk path of a partnership, which was a smarter move than offering its own streaming service, which would have entailed diverting scarce resources to content creation. Walmart needs to focus on getting its retail operations growing again and a movie production business is just too far afield.

Paramount+ adds to the other partnerships Walmart is signing, such as its recent deal with Roku to bring shoppable ads to the streaming platform and its offer of a six-month free trial to Spotify.

Although Walmart doesn't need to compete on every battlefield with Amazon to have a winning service, the route it's taking is the best option available. Paramount has a large portfolio of content available to stream, and despite the market being saturated with services, it extends Walmart's tradition of offering value at low cost.

Walmart+ is priced at $98 a year compared to $149 for Amazon Prime, and the Paramount+ plan is a $59 enhancement. The partnership shows streaming video was a battle best won by Walmart not entering into in the first place.