Which corporation wrote the biggest check to the Hollywood studios in 2000?


The answer is Wal-mart ($1.9 billion), followed by Blockbuster ($1.7 billion). According to an analysis by Alexander & Alexander, the total rental market for videos was approximately $12 billion in 2000, which produced about $3.4 billion of revenue, with Warner, Disney and Universal receiving over 60 percent.

Blockbuster's purchases of product for both rental and sale purposes, in both domestic and international markets totaled $1.36 billion domestically and $0.34 billion internationally. So their "check" to the studios would be about $1.7 billion.

Wal-Mart purchases its videos exclusively for the purposes of sell-through (as opposed to rental) and has an estimated 28 percent share of the sell-through market. That would represent consumer purchases at Wal-Mart of about $2.63 billion (assuming $9.45 billion in consumer spending for both VHS and DVD).

About 15 percent of that sum is spent on non-studio product (such as the Barney kid videos), which leaves $2.24 billion spent on studio product.

Wal-Mart operates on a very slender margins, estimated to be 15 percent on videos and DVDs. If so, it would retain $324 million from these video and DVD sales, and pay the remaining $1.9 billion to the studio's or their distribution arms. Wal-Mart thus writes the biggest total check .