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Disney Finds Tough Q4 Comps Without Cinematic Superheroes

10 Nov, 2016 By: Erik Gruenwedel

For Walt Disney Studios, unfortunately, not every theatrical release hails from Marvel, Pixar or Lucasfilm.

Disney Nov. 10 reported a 28% drop in fourth-quarter (ended Oct. 1) operating income to $381 million from operating income of $530 million in the previous-year period. Revenue inched up 2% to $1.8 billion from $1.78 billion a year ago.

The quarter was a mere hiccup for Disney, which generated $9.4 billion in fiscal-year revenue, including a record $7.5 billion at the box office. That was up 28% from total revenue of $7.3 billion in the previous fiscal year. The primary driver remains Stars Wars: The Force Awakens, which generated $2 billion at the global box office, and ranks as the top-selling packaged meda release in 2016. The title has generated more than $150 million from sales of 6.8 million discs. 

The studio, which includes Walt Disney Studios Home Entertainment, blamed the decline on higher pre-release theatrical marketing costs and lower-than-expected box office revenue from Pete’s Dragon and Queen of Katwe compared with Pixar’s Inside Out, Marvel’s Ant-Man and Avengers: Age of Ultron in the prior-year quarter.

Indeed, last year’s trio of box office hits tallied $2.77 billion, compared with $150 million for Pete’s Dragon and Queen of Katwe. Disney said theatrical revenue from Pixar’s Finding Dory and Marvel’s Captain America: Civil War helped buttress fiscal results. Dory releases into retail channels Nov. 15, while Civil War hit retail Sept. 13. The Pete’s Dragon DVD/Blu-ray Disc streets Nov. 29.

The studio said the increase in TV/SVOD/packaged-media distribution was primarily due to sales of Star Wars: The Original Trilogy and Star Wars: The Prequel Trilogy in the quarter. The two releases have generated $50 million in disc sales, according to The-Numbers.com.


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