Combo Pack Driving 80% of ‘Toy Story 3’ Blu-ray Disc Sales

11 Nov, 2010 By: Erik Gruenwedel

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Walt Disney Studios Home Entertainment’s premium-priced combo pack release of Toy Story 3 is dominating the title’s Blu-ray Disc sales, said Disney CEO Bob Iger.

In a Nov. 11 analyst call, Iger said the combo pack, which includes two Blu-ray discs, a standard DVD and digital copy, has represented 80% of the title’s high-definition sales since its Nov. 2 release.

Iger said the decision to allow Walmart to offer a free digital copy to consumers of the disc through its Vudu download service has helped as well.

He said it was too early to determine how the film’s retail sales compare with Disney/Pixar’s Up a year ago. Analyst Richard Greenfield believes they are trending about 30% to 40% higher.

“[Toy Story 3] is probably going to end up being a stronger [sellthrough] title on the home video front given the fact you’ve got a substantially greater box office globally,” Iger said.

The CEO reiterated his longstanding belief that increased competition for the consumer’s free time has negatively impacted disc sales — a stance he said won’t change, despite the projected windfall for Toy Story 3 home entertainment sales through the end of the year.

“If ever there’s a title that would do well [on disc], it would be Toy Story 3, particularly on the sellthrough side because it’s a title that just makes a lot of sense for people that are going to let their kids watch it multiple times to own versus rent,” Iger said.

The executive said he wouldn’t make sales predictions for the film, but added that if you looked at the initial numbers for Toy Story 3 versus what Disney films did three to five years ago, “you’d be sobered by those numbers.”

“Even with a shift in a positive direction in the economy, [you’re] not going to see a big bounce back to what we used to see in terms of [theatrical-to-DVD] conversion rates,” Iger said.

Global theatrical revenue from the theatrical release of Toy Story 3 coupled with consolidation of studio distribution combined to help Walt Disney Studios post fourth-quarter (ended Oct. 2) segment income of $104 million, compared with a loss of $13 million during the same period a year ago.

Studio revenue, which includes Walt Disney Studios Home Entertainment, reached $1.6 billion, compared with revenue of $1.5 billion last year.

For the fiscal year, studio income topped $693 million, compared with $175 million last year. Revenue reached $6.7 billion, compared with revenue of $6.1 billion last year.

Iger said the decision to distribute and market Disney titles under a unified corporate structure (and spearheaded by Bob Chapek) reflected changes in the global marketplace, including windows and platforms.

“We felt that in creating one distribution organization that had responsibility over all windows, that they would make decisions that would be in the best interest of the property and Disney, instead of advantaging one window over another one,” Iger said. “In effect, taking competition out of our internal structure that might have gotten in the way of maximizing value.”
 

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