'Narnia' Ups Record Image Q3 Revenues9 Feb, 2006 By: Erik Gruenwedel
Strong holiday DVD sales of the original BBC version of The Chronicles of Narnia and The Blue Collar Comedy boxed set helped Image post record third-quarter (ended Dec. 31) revenues of $39.2 million.
The Chatsworth, Calif.-based distributor posted revenues of $34.3 million during the same period last year.
Last month's bankruptcy of national retailer Musicland Holding Corp., operator of Sam Goody and Suncoast Motion Picture Company retail stores, cost Image $1.7 million in profit and thwarted record income of more than $4 million, according to company executives.
Image posted income of $2.3 million, up 20% from $1.9 million last year.
Sales of the Narnia boxed set and individual titles, which Image acquired through its acquisition of shuttered independent distributor Home Vision, generated more than $4.5 million for Image in the quarter.
Image sold 179,000 units of the $49.95 boxed set, almost 60,000 units more than analyst projections. Individual sales of The Lion, the Witch and the Wardrobe generated additional unit sales of 61,000. A typical above-average performing title for Image sells from 20,000 units to 40,000 units, according to officials.
“When you get in the 100,000 units, it is a home run,” said COO David Borshell in an investor call.
CFO Jeff Framer said the loss of Musicland, which accounted for $2 million in Image's third-quarter revenue, resulted in the company lowering annual revenue guidance from $117 million to about $113 million.
“The retail landscape for the core DVD business will most likely undergo dramatic changes in 2006,” said Martin Greenwald, president and CEO of Image. “Musicland, unfortunately, was a poster child of that fallout.”
Greenwald expects Wal-Mart, online retailer Amazon and online rental pioneer Netflix to pick up the slack.
Finally, Image said it would continue to approach Internet –based entities such Google for the dissemination of digital content.
“Establishing those relationships as this market develops is important”, said Borshell. “2006 is still a very early stage of [this market's] growth. It's beyond that where it has the opportunity to mature.”