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Reduced Release Slate Undermines Warner Home Entertainment Q4 Financials

11 Feb, 2015 By: Erik Gruenwedel

A reduced release slate contributed to Warner Bros. Home Entertainment reporting a 32% decline in fourth-quarter (ended Dec. 31, 2014) revenue from theatrical product (physical and digital) to $578 million from $847 million in the previous-year period. Revenue from TV programing dipped nearly 18% to $216 million from $261 million.

WBHE saw full-year theatrical revenue drop 10% to $1.9 billion from $2.1 billion, while TV revenue fell 19% to $584 million from $719 million. Regardless, Warner remained the No. 1 domestic home entertainment studio in 2014 — a ranking it has held for more than 20 years.

Specifically, the quarter featured home entertainment releases Edge of Tomorrow and Tammy compared to Man of Steel, Pacific Rim and The Hangover Part III and the video game release Batman: Arkham Origins in the previous-year period.

Tammy, starring Melissa McCarthy, sold $8.9 million worth of DVDs and $4.2 million in Blu-ray Disc in 2014, according to The-Numbers.com. Sci-fi actioner Edge of Tomorrow with Tom Cruise and Emily Blunt sold $14.4 million in Blu-ray and $7.6 million in DVDs.

By comparison, Man of Steel, with Henry Cavill, sold $33 million worth of DVDs, Pacific Rim generated $17.7 million, and The Hangover Part III another $12.5 million in 2013. On Blu-ray, the three titles sold $57.2 million, $7.4 million and $12.8 million, respectively.

Overall, Warner Bros. Q4 operating income declined $254 million to $319 million on revenue of $3.8 billion, which was down $181 million (5%) from revenue of $3.98 billion the year before.

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