DVD Boosts News Corp.7 Feb, 2007 By: Erik Gruenwedel
DVD sales of Ice Age: The Meltdown, X-Men: The Last Stand, Oscar-nominated Little Miss Sunshine and The Devil Wears Prada helped News Corp. report record second-quarter (ended Dec. 31) income in its filmed-entertainment unit.
Led by the theatrical box office hit Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan and strong TV DVD sales of 20th Century Fox Television programs “24” and “Prison Break,” News Corp. posted operating income of $470 million, up $171 million from $299 million during the same period last year.
News Corp. executives said the Kiefer Sutherland starrer “24” continued to be a home entertainment juggernaut both in sales of packaged media and download markets.
Executives said 20th Century Fox Home Entertainment was named vendor of the year by Wal-Mart for the third consecutive year.
Revenue for filmed entertainment, which included strong results from cable network programming ($275 million in operating income), topped $2.2 billion compared to $1.6 billion last year.
News Corp.'s popular networking site, MySpace, saw a 25% increase in comparative quarter user growth and a 70% rise in revenues.
The company expects MySpace to exceed its $500 million in projected fiscal year 2007 revenue.
News Corp. president and COO Peter Chernin reiterated the company's binding letter of intent agreement with Google.
Overall quarterly revenues reached $7.8 billion, up 18% from $6.6 billion last year.
TV earnings dropped 39% in part due to weak baseball ratings, higher NFL fees and costs associated with the launch of MyNetworkTV, a mini-Fox network catering to prime-time soap operas, including “Wicked Wicked Games” starring Tatum O'Neal.
“Since its launch ratings for MyNetworkTV have been very disappointing and the initial start-up losses have higher than we expected,” said Chernin. “Clearly, MyNetworkTV is not going as originally planned."
He said the fledgling network would soon incorporate movies and mixed-martial arts fighting into the programming schedule in an effort to reduce costs 50%.
Chernin said Fox TV continues to struggle launching new prime time programs, which Chernin said the network had to improve upon.
“Baseball is not solely responsible for our first-half softness; it is our responsibility to put on better shows,” he said.