GE: ‘DVDs Had a Good Quarter’18 Apr, 2010 By: Erik Gruenwedel
Universal Studios Home Entertainment’s DVD/Blu-ray Disc release of comedy Couples Retreat proved a retail champion, selling 5 million units since its Feb. 9 bow and helping NBC Universal boost first quarter (ended March 31) operating revenue 23% to $4.3 billion.
Unfortunately, the film starring Vince Vaughn and Jon Favreau could not overcome poor TV ad sales and related cost associated with the Vancouver Winter Olympics, which contributed to NBC Universal reporting operating income of $199 million – down 49% from operating income of $391 million during the previous-year period.
TV ratings for the Vancouver Games were up 14% from the Turin Winter Games in 2006.
Without the Olympics, NBCU, which is in the process of being spun off by corporate parent General Electric to Comcast for $30 billion, would have reported an operating income increase of 1% and flat revenue.
“DVDs had a good quarter,” said GE CFO Keith Sherin in an April 16 investor call.
Sherin said the media segment continued to be scrutined with the TV ad market remaining challenged in an economic recession, and Universal Pictures struggling to find a box office winner.
Indeed, the studio is ranked fifth among major studios at the domestic box office in 2010, generating $209 million (6.8% market share) with seven theatrical releases through April 15, including The Wolfman with $61.9 million in ticket sales, according to BoxOfficeMojo.com.
The studio ranked sixth in 2009 with 20 releases, including Couples Retreat, which was released Oct. 9, and generated $109.2 million at the domestic box office. Universal's top grossing movie in 2009 was Fast and Furious with $155 million in U.S. ticket sales.
Without a strong box office, home entertainment has suffered. USHE, which had the second highest selling packaged media release in 2008 with Mama Mia!, has been roling out dual-format “flipper” catalog/new releases that include DVD/Blu-ray versions of a movie on opposite sides of a single disc.
Upcoming "flipper" disc releases include Out of Africa 25th Anniversary Edition, Traffic and The Jackal on April 27.
“Film remains challenged but we should see growth in NBCU through the balance of the year,” Sherin said.