Comcast Corporation (NASDAQ:CMCSA) is looking to strengthen is arsenal of products to counter a slowdown in the cable business. After expanding into the content streaming business, the cable giant has once again set sights on the development and distribution of smart TVs.
The company has inked a strategic partnership with Walmart Inc. (NYSE:WMT) as part of its latest push. Under the terms of the strategic partnership, Walmart is to promote the sale of TV sets running of Comcast software. In return, the retail giant would be entitled to a share of the recurring revenue generated from the sale.
According to reports, a third party will develop the TV sets but integrate Comcast software. It is also likely that the TV sets will come with Walmart branding as part of the strategic partnership. Integration of Comcast software would allow Comcast to lock in customers to its ecosystem as it looks to become a key player in content streaming.
Smart TVs and streaming technology should help Comcast go beyond its traditional cable TV business that has come under pressure in recent years. The company has already lost 1.2 million cable TV subscribers as its broadband access business continues to grow at an impressive rate.
A strategic deal with Walmart is a major coup given that the retail giant is a dominant seller of TV sets. However, it is still unclear how the pact will work, given that the retail outlet already has a partnership with Roku through which it sells smart TVs under the Walmart brand on. The fact that the talks are still at an early stage means they can fall through, according to people familiar with the talks.
Likewise, Comcast is essentially borrowing leaf out of other tech companies selling streaming devices running on their own software. Apple TV is one such product synonymous with Apple products. Amazon has also made its presence felt in the industry with Fire TV.
The development of Comcast powered TV should enhance the cable giant marketing ambitions as it looks to reach out to consumers nationwide. This will be a major change to the cable giant, which has always stuck to a regional footprint. Likewise, the company should be able to draw in more ad revenues from its new streaming service Peacock.