Walmart is considering a streaming video subscription service that will compete against Amazon Prime Video and Netflix, reports The Information. According to one source, Walmart would price its streaming video service below $8 per month, making it cheaper than both Prime Video and Netflix. Walmart might also offer an ad-supported, free streaming video service.

Why does Walmart want to offer such a service? According to The Information, Walmart believes its customers want a lower-priced streaming video subscription option than they can get with the current services available. The company’s focus will be on customers in the middle of the country, instead of the East and West Coasts, sources say.

Walmart already has several video options, VUDU, UltraViolet, VUDU Spark and InstaWatch:

• VUDU is an online video store where viewers pay per use. Video rentals start at $0.99 each. Purchased videos range between $3.99 and $5.99. Purchases are stored in a digital locker called UltraViolet where customers can store files to watch at home or on their devices.
• VUDU Spark is also available. It is a streaming stick, similar to Roku or a Fire TV stick. It can be purchased at Walmart stores or online. It serves as a digital dashboard where customers can browse, rent, buy or watch movies and TV programs.
• InstaWatch is a VUDU service that sends digital copies of qualifying DVDs and Blu-ray discs purchased in a Walmart store or online at Walmart.com.

Walmart bought Vudu in 2010. The service currently offers about 100,000 movies and TV shows. The Information reports that, in May, Vudu users spent nearly 18,000 hours on Vudu, compared to 897,000 hours on Netflix and more than 315,000 hours on Amazon Prime, per ComScore.

Currently, Netflix offers three plans: Basic at $7.99 a month, Standard at $10.99 a month and Premium at $13.99 a month, after a month-long free trial. Hulu offers a $7.99-a-month plan with limited or no commercials and a $39.99-a-month plan for Hulu Live TV. Add-ons vary for each of these plans; they include a no-commercials plan, HBO, Showtime, Cinemax, enhanced Cloud DVR and unlimited screens. Amazon Prime Video is included in an Amazon Prime membership for $119 a year, or as a standalone subscription for $8.99 per month.

Insider Take:

It seems there is plenty of room in the streaming video on demand marketplace for another player, but to truly be successful Walmart needs to differentiate itself. Sure, a cheaper option will appeal to some customers, but that may not be enough to attract a huge contingent of new customers. Will Walmart be willing to acquire the rights to exclusive programming or to produce original content? That’s what it will take to make Walmart a competitor in a space that’s getting more crowded every day.