Thanks for your movie purchase. Would you like to add a new TV to your shopping cart?
Don't be surprised if you get such a prompt the next time you're shopping on Wal-Mart's (WMT) website.
Today, the retail giant launched a streaming video rental service on its site in a move designed to beef up its online one-stop-shopping strategy. The availability of online movie rentals is another way to leverage the sale of its Internet-ready high-definition TVs, Blu-ray disc players and PlayStation 3 computer game consoles, which can stream VUDU's movies.
With the new service, Walmart.com has completed the integration of VUDU, a movie streaming rental service it acquired last year. The offering even one-ups Wal-Mart's treatment of video rentals in its bricks-and-mortar stores, where it relies on Coinstar's (CSTR) Redbox vending machine kiosks, rather than handle the rentals itself.
It also puts the retailing titan smack into Netflix's (NFLX) streaming business, especially when it comes to the casual movie-viewer.
The cost of Wal-Mart's streaming video rentals runs $3.99 per movie, so a casual viewer who sees two movies a month will pay the same for Netflix's unlimited one-month streaming video subscription of $7.99 a month.
Netflix recently took it on the chin with its investors, who are concerned it will lose momentum with its subscribers following a steep price hike of as much as 60% for those customers who want both DVD rentals mailed to their homes and access to streaming videos. The new rate kicks in on Sept. 1 for existing customers, while new customers already are charged at the higher rate.
Whether Wal-Mart takes its VUDU integration to the next level and begins to package sales of its hardware with a certain number of streaming video rentals has yet to be seen. It may be something investors look out for down the line, especially during the busy holiday selling season.
Motley Fool contributor Dawn Kawamoto does not own stock in the companies listed; however, she's been known to cruise the aisles of Wal-Mart and take the form of a couch potato when watching a Netflix movie. The Motley Fool owns shares of Wal-Mart Stores.