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Fandango just purchased Vudu from Walmart to better compete against Amazon, iTunes

Neither Vudu nor FandangoNOW will compete against Peacock

Hot off the soft launch of its Peacock streaming service, NBCUniversal is welcoming another streaming service into its family, but this one is designed to help movie ticket seller Fandango expand its digital reach.

Fandango, which is owned by Comcast, has purchased digital movie retailer and streaming service Vudu from Walmart for an undisclosed amount. A representative for Fandango told The Verge that more information will be announced in the coming months, after the deal is closed. Vudu is currently available on more than 100 million living room devices, according to Walmart, and the mobile app has more than 14 million downloads.

The representative added that the primary goal of the purchase is to scale the company’s presence in the transactional space — meaning movies that people can buy and rent the second they’re available without a subscription. Fandango also currently operates its own digital marketplace, FandangoNOW, that had 60 million monthly visitors and contained more than 100,000 movies and TV shows as of December 2019.

Fandango is trying to scale in order to compete with Amazon and Apple’s iTunes, not subscription and ad-supported streaming services like Netflix or Tubi. Fandango wants to grow its streaming business in scale to reflect its current size as a ticket retailer — Vudu could be key to that goal. Vudu has a large, built-in audience and a dedicated network of home video enthusiasts. The streamer is largely praised for using higher bit rates than other competitors and for its overall dedication to high streaming quality.

Although Walmart has reportedly eyed selling off Vudu, which it acquired in 2010, for a couple of months, now is the perfect time for Fandango to purchase. The current global pandemic has shifted how people watch movies and, more importantly, how studios see the use of digital retailers for some of their films.

Disney, NBCUniversal, and Warner Bros. are just some of the studios that have decided to shorten or completely forgo the theatrical window for a number of their films now that movie theaters across the country are shut down. While other movies have been delayed, including big Marvel films like Black Widow and Mulan and summer blockbusters like F9 and Wonder Woman 1984, some studios are choosing to lean into digital releases and serve audiences stuck at home.

(Disclaimer: NBCUniversal is owned by Comcast, which is an investor in Vox Media, which owns The Verge.)

NBCUniversal, which is also owned by Comcast, recently decided to forgo the theatrical release for Trolls World Tour, and the company instead just released it digitally for $20. NBCUniversal claimed that Trolls World Tour saw the biggest digital debut of all time, adding that it was a massive hit on FandangoNOW, but the company wouldn’t disclose any sale numbers. Having a platform like Vudu on top of FandangoNOW will help reach a bigger audience, the Fandango spokesperson told The Verge. That seems especially true as movie release windows continue to shift; this morning, Warner Bros. pushed its upcoming DC lineup, including the newest Batman film.

Despite Vudu having a built-in ad-supported streaming service for some of its titles, neither Vudu nor FandangoNOW are seen as competitors to NBCUniversal’s new crown jewel in the streaming market, Peacock. Vudu and FandangoNOW are designed to complement Peacock, with all three remaining separate entities. Vudu and FandangoNOW will live within NBCUniversal’s digital network, where the focus remains on rentals and purchases of newly released films.