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Motley Fool Issues Rare “All In” Buy Alert
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Shares of Amazon (AMZN 0.14%) are trading 2.2% lower at 11:33 a.m. ET on Wednesday after rival Walmart (WMT -0.32%) announced it had signed a partnership with Paramount Global (PARA -1.25%) to offer the movie studio’s streaming service to its Walmart+ member loyalty program.
While the deal isn’t about to prove particularly competitive to Amazon Prime Video since few sign up for Amazon’s own membership program to simply get streaming video, Prime itself is coming under greater scrutiny. With Walmart+ priced some $50 less than Prime, it could be seen by some as a better value now.
Walmart has tried offering movies to its customers before, once with a DVD rental service and once via its Vudu streaming offering. Both never gained traction and were subsequently sold off. This could be a better option for Walmart+ members since Paramount+ is operated by someone else and Walmart is simply providing access to it, albeit it being Paramount’s ad-supported level.
Amazon Prime, though, is being investigated by the Federal Trade Commission over the ease of unsubscribing from the service. The probe has since expanded to include other Amazon subscription services including Audible, Amazon Music, Kindle Unlimited, and Subscribe & Save.
Amazon has an estimated 150 million U.S. subscribers in its Prime program, which costs $149 a year. Walmart+, on the other hand, boasts just 11 million U.S. customers.
The reason most people sign up for Prime is the fast, efficient delivery of goods from the e-commerce site. Walmart+ won’t likely see any crush of people paying $98 a year because it now has streaming video.
Yet along with discounts on gasoline and a six-month free trial to Spotify, a free subscription to the Paramount+ Essential Plan, a $59 value, is a nice add-on benefit.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Spotify Technology, and Walmart Inc. The Motley Fool has a disclosure policy.
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