Walmart is selling its on-demand video service Vudu to Fandango

Movie ticketing company Fandango has agreed to buy Walmart’s on-demand video streaming service, Vudu, for an undisclosed sum. The video service today reaches more than 100 million living room devices across the U.S., including smart TVs, Blu-ray players, game consoles and other over-the-top streaming devices, as well as Windows 10 and Mac computers, and iOS and Android mobile devices.

To date, the Vudu app on mobile has been installed more than 14.5 million times.

As a part of the agreement, Vudu will continue to power Walmart’s digital movie and TV store on Walmart.com.

In addition, Walmart says Vudu customers will have uninterrupted access to their Vudu library. They’ll also continue to be able to use their Walmart login as well as their Walmart wallet to make purchases on Vudu, the retailer notes.

Details as to how Fandango will specifically leverage Vudu weren’t immediately disclosed, but the company today operates its four-year old movie streaming platform, FandangoNOW, which is an obvious integration point. The service has become a more essential business in the wake of the COVID-19 pandemic, which has shut down theaters, significantly impacting Fandango’s digital ticketing operations.

As a result, Fandango has put more efforts into its streaming business. For example, its stream of the newly released “Trolls World Tour,” which skipped its theatrical release due to COVID-19, was the most pre-ordered title in the streaming service’s history, the most-rented digital title on opening day and the best-selling rental during its first three days of digital release, according to Deadline.

Fandango says that Vudu will allow it to scale that side of its business. It also plans to make offers to the majority of the Vudu team, when the deal closes.

“For us, it’s a combination of scale for our on-demand streaming service and the addition of Vudu talent,” a Fandango spokesperson said. “Vudu has a strong brand presence and customer base. So right now, we’re focusing on making sure that during this transition Vudu customers are taken care of and likewise on the FandangoNOW side. Both businesses will exist for the time being,” they noted.

Rumors that Walmart was shopping Vudu have been reported for many months. In February, Walmart was said to be in discussions with Comcast, which could have leveraged the platform for its newly launched streaming service, Peacock.

Walmart’s interest in an online movie purchase and rental marketplace may have dwindled in recent months, as competition from other major players has ramped up: WarnerMedia is preparing HBO Max; NBCU just launched Peacock; and Apple TV+ and Disney+ are also live, and gaining traction. There’s even a mobile-only service (Quibi). Elsewhere, there’s been significant consolidation in TV and video, with Viacom and CBS’ merger completing in late 2019, with plans to beef up the CBS All Access streaming service. Viacom also purchased free service pluto.tv. And sports-focused streamer fuboTV just sold to FaceBank.

Meanwhile, Walmart’s original plans for Vudu to be something of a competitor to Amazon Prime’s video service never really panned out.

That said, Walmart had been recently working to release a slate of original content on Vudu alongside new shoppable ads, powered by technology from its joint venture with interactive content startup Eko. Its first original Vudu series, a reboot of “Mr. Mom,” debuted last September. It’s unclear at this time to what extent those plans will continue at Fandango.

Fandango couldn’t yet comment on what role Vudu’s adtech or original content plays in the deal, beyond noting that everything live on the platform today would be included in the acquisition.

“We will continue to invest in areas where we have the greatest strength and are in the best position to serve our customers today and in the future,” a Walmart spokesperson noted in a statement, referencing the sale. “Pickup and delivery are great examples of how we’ve invested to bring digital and physical capabilities together to better serve our customers, by offering more choice and convenience. We’re focused on serving customers through these type of omni-retail experiences and we’re actively prioritizing our investments to maximize our strengths and serve them in new ways,” they added.

Walmart has seen a surge of interest in its e-commerce operations as a result of the pandemic. The company’s focus now is on hiring to fulfill consumer demand for online shopping and grocery. It has already hired 150,000 new workers and is hiring another 50,000, it said last week.

The Fandango acquisition is expected to close in the months ahead, says Walmart.

Updated, 4/20/20 4:00 PM ET with Fandango comments.