Comcast (CMCSA) - Get Comcast Corporation Class A Report is reportedly in talks with retail giant Walmart (WMT) - Get Walmart Inc. Report to develop and distribute smart TVs, as the cable titan looks to become a dominant hub for streaming apps.
Under the terms the companies are discussing, Walmart would promote TV sets running Comcast software, and would get a share of recurring revenue from Comcast in return, people familiar with the matter told The Wall Street Journal.
Comcast's talks with Walmart, the world's largest retailer, are at an early stage and may not result in an agreement, the Journal said.
Shares of Comcast at last check were up 3.3% to $42.78, while Walmart was up 1.5% to $142.55.
The Comcast software would help consumers navigate through their streaming apps and watch programming.
The move would put Comcast up against tech companies that already are the major players in the streaming market, such Apple TV maker Apple (AAPL) - Get Apple Inc. Report, Fire TV maker Amazon.com (AMZN) - Get Amazon.com, Inc. Report, and Roku (ROKU) - Get Roku, Inc. Class A Report.
Roku, which is scheduled to report quarterly earnings on Thursday, was sliding 2.9% to $200.90.
A third party would likely manufacture the sets, and one possibility is that they could carry Walmart branding.
Walmart, a dominant seller of TV sets, already has a partnership with Roku to sell smart TVs under the Walmart brand Onn.
The strategy would enable Comcast to market to consumers nationwide. The company would be able to promote its new streaming service, Peacock, front and center in the smart TVs.
Comcast has spent nearly a decade developing the software behind its advanced X1 cable set-top box, which integrates streaming apps, so viewers can toggle between those and channels. A voice remote allows consumers to search through programming.
Comcast already sells Flex streaming devices powered by a slimmed-down version of its X1 software. Those devices, similar to an Apple TV or Roku, are available for free to broadband-only Comcast customers.