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Dearth of Video Hits Hurts Fox in Q3

11 May, 2006 By: Erik Gruenwedel

A lack of breakout video hits from 20th Century Fox Home Entertainment contributed to a 6% drop in News Corp.'s filmed-entertainment revenue, from $1.47 billion to $1.38 billion for the third quarter ended March 31.

DVD shipments of 8 million and 3 million units, respectively, for Walk the Line and Transporter 2, couldn't compete with last year's hits Napoleon Dynamite, Alien vs. Predator and I, Robot.

Overall, double-digit percentage increases in television, cable and select magazine properties helped News Corp. increase revenues $155 million, to $6.2 billion. Net income for the quarter doubled from $400 million to $820 million.

Despite the decline in filmed entertainment, Peter Chernin, president and COO of News Corp., said that if the studio had released theatrically Ice Age 2: The Meltdown three weeks earlier than March 31, the division would have reported “significant increases.”

“This is by no means indicative of the strength of our film business,” said Chernin. “$590 million in cumulative box office receipts [for Ice Age] is a paradigm of the success [filmed entertainment] has achieved over the past six years.”

Chernin said continued strong sales of “Family Guy,” “24” and releases of The Family Stone and Cheaper by the Dozen 2 will contribute to a strong finish to the year in filmed entertainment.

He said News Corp. continues to explore the migration of entertainment across multiple distribution channels, including recent deals to make “American Idol” available for download and putting 16 Fox TV shows on Apple Computer's iTunes.

“We remain very focused on the new media growth opportunities,” Chernin said. “We would expect to have a steady stream of new announcements over the next few months.”

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