'Transformers,' 'Shrek 3' DVD Sales Up Viacom Profit28 Feb, 2008 By: Erik Gruenwedel
Strong DVD sales of Paramount Home Entertainment's Transformers and DreamWorks Animation's Shrek the Third contributed to Viacom Inc. posting fourth quarter (which ended Dec. 31) income of $559.5 million, up 16% from $480.8 million during the same period last year.
Transformers and Shrek the Third shipped 19 million and 15 million net units, respectively, according to company officials.
Home entertainment quarterly revenues increased 12%, to $1.08 billion. For the year, home-entertainment revenues increased 18%, to $2.5 billion. Overall filmed-entertainment revenue increased 19%, to $1.84 billion, while Viacom's media networks, which include Nickelodeon, TV Land, VH1, Comedy Central and others, improved 18%, to $2.45 billion, from last year.
The company said filmed-entertainment revenues were partially offset by charges related to select fourth quarter theatrical launches and lower contributions from DVD catalog.
In a call with investors, CEO Philippe Dauman said Paramount greatly valued its relationship with defunct next generation format HD DVD and Toshiba and looked forward to releasing titles in Blu-ray depending on consumer response.
“We are quite happy that there's been unification of an important new revenue stream for the industry,” Dauman said.
He did not comment on DreamWorks Animation's revelation that it awaited permission from Toshiba to discontinue distribution in HD DVD.
Dauman called the launch of video game Rock Band an “unqualified success,” selling more than 2 million units and 5 million songs since its pre-holiday launch.
“We expect to be talking about this franchise for many years to come,” Dauman said.
The CEO said MTV Games signed an agreement with TV producer Jerry Bruckheimer to develop a series of games for a variety of distribution platforms, including mobile.
In addition, Dauman said he was in discussions with Steven Spielberg and DreamWorks SKG regarding a new feature film franchise beyond “Indiana Jones.”
“That is the core of our relationship [with DreamWorks]: Steven Spielberg,” he said.
Total Viacom revenue increased 19%, to $4.25 billion, from $3.57 billion. Operating income rose 18%, to $978 million.