Walmart, SDS Said to Be in Talks Over Managing DVD, Blu

Dec 10, 2023

Thomas K. Arnold

August 11, 2023

Walmart, the world’s largest retailer, is reportedly in talks with Studio Distribution Services (SDS) about helping manage parts of its physical media business.

Despite cutting back its floor space allocated to discs by about 20% late last year, Walmart remains the single largest retail seller of DVDs and Blu-ray Discs, with an estimated market share in excess of 45%.

With discs generating about $2 billion in annual consumer spending, that would value Walmart’s disc business at about $936 million.

SDS is the joint venture formed by Universal Pictures and Warner Bros. back in April 2021 to sell and distribute DVDs, Blu-ray Discs and 4K Ultra HD Blu-ray discs in the North American market, for both companies and their existing distribution partners. The venture is headed by Eddie Cunningham, a former president of UPHE.

Sources say Walmart issued a request for proposal (RFP) and selected SDS. Walmart reportedly gives other studios and independent suppliers a certain deadline to come aboard.

In prior years, at the height of DVD and Blu-ray Disc, Walmart would appoint one studio to serve as a “category captain,” effectively serving as a consultant to leverage data and market research to improve the overall category’s performance. Sources say the SDS deal is broader and more hands-on and would include shipping and distribution.

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Walmart publicists did not respond to requests for comment.

Cunningham would not talk about the deal.

He did, however, say that while SDS “was initially set up for Warner Bros., Universal and their partners, it was built in a way that would allow it to scale up easily. We believed that consolidation was inevitable at some point as the market matured over time. We wanted to be in a position where we could support moves in that direction, but only when retailers and other studios were ready for it.”

“As long as there is retail support for the category in terms of space in the store, there will be a meaningful business,” Cunningham maintains. “Helping our retail partners ease their operational complexity can contribute to a healthy retail landscape for our content.”

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