Wal-Mart and Netflix Scratch Each Other’s Backs

    May 19, 2005
    Chris Crum

Wal-Mart and Netflix have decided to join forces in the online movie business with a promotional campaign for Walmart.com’s movie sales and Netflix’s DVD movie rentals.

The two companies will market each other’s key movie business at their respective websites. Wal-Mart has had greater success with its online movie sales than with its DVD rental service, so the latter is being discontinued.

“We’ve experienced tremendous growth in our online movie sales, and are committed to enhancing our focus in this business at Walmart.com. We’re equally excited to team with Netflix, the pioneer of online movie rentals, which not only distinguishes both of our core online competencies, but offers a complementary solution of value, service, and convenience to customers,” said John Fleming, Wal-Mart’s executive vice president and chief marketing officer who also oversees Walmart.com at the executive level.

The two companies are offering subscribers of Walmart.com’s DVD Rental service the option to become Netflix subscribers at their current Wal-Mart rate for one year from the date they sign-up. 1

Netflix will in return promote Wal-Mart’s online movie sales business, including the pre-order price guarantee option at Walmart.com, both at its website and in mailers sent to Netflix subscribers.

Netflix co-founder and CEO Reed Hastings said, “This agreement bolsters both Netflix’s leadership in DVD movie rentals and Wal-Mart’s strong movie sales business, while providing customers even more choices and convenience. Both companies will continue to expand their respective leads in providing the best in movie entertainment to millions of online customers.”

Netflix shares jumped over 30% today in pre-market trading after the companies announced their plans. Yesterday, Wal-Mart shares closed up 58 cents at $47.58.

Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.