Disney ‘Avenges’ Third-Quarter Fiscal Result7 Aug, 2012 By: Erik Gruenwedel
‘The Avengers’ will be released at retail in September; studio says Joss Whedon on board to write, direct ‘Avengers 2’
Thanks to a group of Marvel superheroes, Walt Disney Studios Aug. 7 reported third-quarter (ended June 30) operating income of $313 million, up 538% from operating income of $49 million during the previous-year period.
The studio, which includes Walt Disney Studios Home Entertainment, reported flat revenue of $1.6 billion and factored in nearly two months of theatrical revenue from the May 4 debut of The Avengers.
The comic-book action movie remains the top grossing domestic box office release in 2012 with ticket sales of more than $616.7 million. Also contributing to the quarterly revenue was eight days of ticket sales from Brave, which has generated nearly $224 million at the box office.
The increase in worldwide television revenue was driven by higher sales in international markets due to stronger performing theatrical titles available in the current quarter.
The decrease in global home entertainment revenue was primarily due to a decline in disc sales. Significant Q2 quarter titles included John Carter and The Muppets, while the prior-year quarter included Tron: Legacy, Tangled and Gnomeo & Juliet.
It should be noted that Disney reported a $200 million write-off loss in the second quarter for Carter, which generated $73 million at the domestic box office on a production budget of $250 million. The film generated about $210 million at the global box office.
The underperformance of the film contributed to the departure earlier this year of Rich Ross, chairman of Walt Disney Studios. Former Warner Bros. executive Alan Horn was named chairman of Walt Disney Studios last May.
When asked if he would license TV Everywhere apps currently in use by third-parties for Disney Channel (Comcast) and ESPN (Time Warner Cable) for other Disney brands on a standalone basis, CEO Bob Iger said the apps’ success proves the power of mobile media.
“Clearly the device — mostly the tablets and to some extent the smartphones — is a device people are willing to watch long-form video on, particularly kids,” Iger said in a call with analysts.
While he said the apps benefit consumers’ ability to access content in more ways, and there exists a “veritable queue” of distributors interested in launching Disney apps within the current multi-channel cable/satellite/telco distribution network, Iger said he has no interest in launching them as standalone platforms.
This fall, Disney will add advertising to the ESPN and Disney Channel apps in an effort to generate incremental revenue, in addition to greater visibility, for its programming.
“We have an opportunity to not just use these apps to increase the value of the multi-channel eco-system, but ultimately drive greater revenue through advertising,” Iger said.