Paramount Home Media Distribution Posts 4% Revenue Decline in Q34 Aug, 2016 By: Erik Gruenwedel
Paramount Home Media Distribution Aug. 4 reported a 4% drop in third-quarter (ended June 30) home entertainment revenue to $192 million, from $200 million in the previous-year period. Through the first nine months of the fiscal year, home entertainment revenue is down 18% to $584 million, compared with $712 million a year ago.
Principal retail releases in the quarter included Zoolander No. 2, 13 Hours: The Secret Soldiers of Benghazi and 10 Cloverfield Lane. During the previous year, the studio accounted for The Gambler, Selma and The SpongeBob Movie: Sponge Out of Water — the latter generating $22.8 million from the sale of 1.25 million discs.
At Paramount Pictures, fiscal woes continue as box office release Teenage Mutant Ninja Turtles: Out of the Shadows underperformed. The title has generated $236.5 million at the global box office, including $81.5 million in the U.S.
The studio, which includes Paramount Home Media Distribution, reported an operating loss of $27 million on revenue of $621 million. Over nine months, the studio has an operating loss of $316 million on revenue of $1.8 billion.
“Teenage Mutant Ninja Turtles did not meet our expectations,” Viacom CEO Philippe Dauman said on the fiscal call. “There is no question the studio has had a rough go at the box office recently. We expect fortunes to turn.”
Teenage Mutant Ninja Turtles: Out of the Shadows will be released on disc Sept. 20.
Dauman said he remains upbeat with the studio’s move into TV production. Recent series “Berlin Station” just launched on FX. The “Paramount Channel” remains the largest ad-supported movie channel in the world, available in 93 million homes overseas, according to Dauman.
“We made it a priority to return Paramount to the TV production business. And we made it happen,” he said.
The executive said ongoing issues with Sumner Redstone and his daughter Shari over control of Viacom have stymied a proposed minority stake sale in Paramount.
Dauman contends recent favorable court developments should create “a better environment” that would allow him to progress with several acquisition parties toward a “highly beneficial transaction” to present to the board.
The 93-year-old Redstone has reportedly come out against the sale.
Dauman characterized the infighting with the Redstones as “somewhat” of a distraction, but added he would not be “deterred from pursuing a strategic initiative” involving Paramount that enhances shareholder value. The possible $5 billion sale was supposed to have been completed a month ago.
“I hope we will reach a conclusion that will be beneficial to the company in due course,” Dauman said.
Meanwhile, corporate uncertainty contributed to Viacom not completing a planned “significant” SVOD license deal in Q3.
“With any deal, we always look for the right terms. As you know there are many [streaming] players out there. We just want to be thoughtful about how we conclude [a deal]. We are having fruitful discussions,” Dauman said.