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Comcast CFO: Universal Studios Not a ‘Big’ Business to Cable Operator

5 Jan, 2012 By: Erik Gruenwedel

No. 1 cable operator Comcast Corp. is under no illusion that its Universal Studios film division can return to operating income levels from several years ago, CFO Michael Angelakis told an investor group.

Speaking Jan. 5 at the Citi Global Entertainment, Media & Telecommunications Conference in San Francisco, Angelakis said the decline in DVD sellthrough at the retail level (through Universal Studios Home Entertainment) has created a significant operating income gap.

USHE’s last major sellthrough hit, Mamma Mia!, sold 33 million discs globally in the fourth quarter of 2008 — second only to Warner Home Video’s The Dark Knight. Indeed, the studio sold just 12 million discs during the same period in 2009. It bounced back with the success of Despicable Me in 2010, and USHE reported a 20% in Q3 revenue last November due to retail disc sales of Bridesmaids and Fast Five.

Regardless, Angelakis remained circumspect.

“[I’m] not sure we can get back to where it was a few years ago … but we know we can do better than where we are today,” he said.

The CFO said the film business is predicated on box office hits — a prerequisite that has eluded Universal in recent years. The studio finished 5th at the box office in 2011, with more than $1 billion in ticket sales — one place better than in 2010.

“We are trying to manage the volatility,” Angelakis said. “… It’s not that big a business [to us], believe it or not, but we think there is opportunity there as well.”

Meanwhile, the CFO heaped praise on the recent content distribution announcement with The Walt Disney Co., calling the 10-year deal a measure of “consistency” in a time of anxiety within the multichannel video programming distribution industry. He called Comcast's current $73 ARPU (monthly average revenue per subscriber) as a “heck of a lot of value,” and reiterated that the previous four quarters’ subscriber losses have decreased sequentially.

“We feel pretty good about the video business,” Angelakis said.


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