Home Entertainment Ups 20th Century Fox Q3 Profit

9 May, 2012 By: Erik Gruenwedel

---

20^th Century Fox Studios reported third-quarter (ended March 31) operating income of $272 million on revenue of more than $1.7 billion, due in part to strong home entertainment sales of Rise of the Planet of the Apes and Alvin and the Chipmunks: Chipwrecked.

The studio, which includes 20^th Century Fox Home Entertainment, said the income was up nearly 10% ($24 million) from operating income of $248 million during the previous-year period. Revenue increased nearly 11% ($168 million) from $1.5 billion last year, also due to Oscar-nominated home entertainment release The Descendants and the pay-TV performance of Rio.

Planet of the Apes was the first production of The Chernin Group, whose CEO, Peter Chernin, was president and COO of Fox parent News Corp. until 2009. The Chernin Group has a first-look deal with the studio.

The quarter also benefitted from increased operating profit at the television production studios, reflecting higher digital distribution revenue (i.e. Netflix, Amazon Prime), an increase in license fees for “How I Met Your Mother” and an increase in syndication revenue for “Family Guy.”

Indeed, Fox recognized $250 million in incremental revenue in the quarter from subscription video-on-demand deals with Netflix and Amazon Prime, which was up $25 million to $30 million from a year ago.

When asked if SVOD services such as Netflix and Hulu (which is co-owned by News Corp.) were having any impact on Fox channels, News Corp. president and COO Chase Carey downplayed the impact.

“I wouldn’t say so,” Carey told analysts in a fiscal call, adding that when Fox acquires movie and content rights it mandates digital rights as well in order to capture the highest value of viewership in all distribution channels. “You want to own the broadest sets of rights possible.”

Carey said News Corp. continues to work internally developing the best opportunities for Hulu (and Hulu Plus) as a digital franchise while adding value to existing channels.

“There is no question these digital platforms are going to be a driving force of our business going forward,” he said.

Bookmark it: