Home Entertainment, Theatrical: Paramount Q4 Fiscal ‘Transformers’10 Nov, 2011 By: Erik Gruenwedel
Paramount Pictures Nov. 10 posted a triple-digit increase in fourth-quarter (ended Sept. 30) operating income to $185 million driven by the strong home entertainment and theatrical performance of Transformers: Dark of the Moon.
Studio parent Viacom Inc. said the third installment of the popular Michael Bay-directed action franchise drove Paramount’s operating income up 256% from $52 million during the same period a year ago. The movie also generated undisclosed incremental revenue from digital distribution, including transactional video-on-demand.
Dark of the Moon was the first Paramount movie to gross $1 billion in theatrical revenue worldwide.
Total home entertainment revenue in the quarter grew 26% to $511 million, reflecting a higher number of releases than last year. Titles included Thor, Rango and Transformers 3, compared with Iron Man 2 last year.
TV license fees increased 5% to $393 million due to higher pay-TV and network TV revenue. Ancillary revenue increased 49% to $121 million primarily due to higher digital revenue.
Studio revenue for the quarter increased 46% to $1.7 billion, from $1.2 billion last year.
For the full fiscal year, studio operating income was relatively unchanged at $341 million, compared with $340 million last year, on revenue of $5.9 billion, up 15% from revenue of $5.1 billion during the previous fiscal year.
In a call with analysts, CEO Philippe Dauman said proliferation of digital distribution via subscription video-on-demand and transactional VOD platforms.
“Digital distributors continue to present valuable partnerships for us,” Dauman said. “They are high margin and they allow us to monetize library content, in effect creating a new syndication window for our franchises. And there is a lot of room for growth in the U.S. and internationally.”