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Disney's Iger Suggests Closing DVD Windows

10 Aug, 2005 By: Holly J. Wagner

On the heels of a weak quarter for movies theatrically and on video, Walt Disney Co. president, COO and CEO-elect Robert Iger suggested that studios need to re-examine release windows and how they market movies for those venues.

“A number of things have to change. We have to look more aggressively at windows changing … not only for the studio business but also for the TV business,” Iger said, adding that consumers should not have to wait six months for a rerun to see a favorite or missed TV episode.

“We can't stand in the way and can't allow tradition to stand in the way of where the consumer can go or wants to go,” Iger said. “Windows in general need to change. I don't think it's out of the question that DVDs could be released in the same window as the theatrical release. All the old rules should be called into question because the rules of consumption have changed so dramatically.”

Revenue for the Walt Disney Co.'s studio entertainment unit was down 15 percent to $1.5 billion for its third quarter ended July 2, and its operating income decreased $62 million to a loss of $34 million, but is optimistic for the rest of the year.

Executives cited a decrease in worldwide home entertainment revenue for the decline. Unit sales in this year's quarter, which included National Treasure, The Pacifier and Disney/Pixar's The Incredibles, were down compared to the same quarter last year, in which Buena Vista Home Entertainment released Kill Bill: Vol. 1, Disney/Pixar's Finding Nemo, Scary Movie 3, Bad Santa, Brother Bear and Cold Mountain. Buena Vista also saw a decline in home video unit sales for feature films of comparable box-office strength.

“We're pretty much discovering that with newly released [video] titles, if they don't move in the first month, they don't move at all,” Iger told analysts. “So there is a fair amount of pressure on a title when it is initially released. The falloff, in terms of consumption or purchases after the first month of the title on the shelves, is much more dramatic than we used to see.”

Higher worldwide theatrical film distribution, lower film cost writeoffs and improved television distribution results partially offset the losses.

Disney also took a $24 million write-down related to MovieBeam, which the company shuttered late last year.

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