BENTONVILLE — Walmart hopes to grab a bigger piece of the video streaming pie with its Disc-to-Digital service.
The new program allows customers to buy online streaming access to movies they already own. Disc-to-Digital rolls out nationally April 16 at more than 3,500 stores.
The online pie is growing quickly. Nielsen reports more than 164 million U.S. video viewers streamed more than 22 billion videos and spent more than five hours on average watching online video in December.
Chris Nagelson, Walmart’s vice president of entertainment merchandising, said the company strives to give customers what they want.
“Your favorite movies can all be up there in the cloud,” he said.
Carol Spieckerman, president and chief executive of Bentonville-based retail consulting firm newmarketbuilders, echoed that sentiment.
“I think Walmart is looking at ways to participate in a lot of the activities that its customers already use,” she said. “This program is a very customer-centric action.”
The program utilizes VUDU, a video streaming service Walmart bought in March 2010. The site allows visitors to rent or buy movies stored on a third-party service.
Nagelson said this prevents content from eating up space on whatever web-enabled device is being used to watch the video.
Because there is no uploading involved, customers can bring in scratched or otherwise unwatchable movies to be converted to digital, said Sarah Spencer, Walmart spokeswoman.
More than 300 Internet-connected devices will play content from a VUDU account.
Disc-to-Digital does not take long to complete. Customers are required to set up a VUDU account, which they can do at the store, and bring in the DVD or Blu-ray disc they would like to access digitally.
The service costs $2 for DVD to standard and Blu-ray to high-definition conversions. It costs $5 to upgradea standard DVD to high-defi - nition. The service is in the stores’ photo centers.
“Associates in the photo centers are used to working with these types of services,” Nagelson said.
Walmart has agreements with all the major studios except Disney, but that is in the works, Nagelson said.
“We will keep adding more and more movies,” he said.
Nagelson said the program is financially beneficial to both Walmart and movie studios, but he would not disclose any financial terms of the deal.
Louis Greth, Walmart merchandise director, walked through the rest of the process that included a store worker verifying the disc is not a rental or illegal copy and is available on the VUDU system.
Once the photo center employee finds the requested movies, he adds them to a virtual shopping cart and prints out a barcode with the purchase total.
Arkansas does not collect sales tax on this type of transaction, but that can vary state-to-state, Greth said.
Before the customer gets the disc back, the employee stamps “Walmart Entertainment” on the back so no one else can bring the same disc for conversion.
Disc-to-Digital uses the movie industry’s UltraViolet program that offers digital proof of purchase and online storage.
Nagelson said UltraViolet lets the consumer track ownership of his movies.
“If you have an Ultraviolet movie in another service, you can move it to our space,” Greth said.
Spieckerman said this program shows Walmart is on its way in the digital age.
“They are stepping out and making these technology acquisitions and it is another way Walmart is becoming more nimble,” she said.
Business, Pages 9 on 04/08/2012