'Frozen,' 'Thor' Retail Sales Drive Disney Studio Profit

6 May, 2014 By: Erik Gruenwedel

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As expected, strong home entertainment unit sales of box office hits Frozen and Thor: The Dark World contributed to Walt Disney Studios upping second-quarter (ended March 29) operating income 302% ($357 million) to $475 million.

Studio operations, which include Walt Disney Studios Home Entertainment, reported revenue increased 35% ($462 million) to $1.8 billion.

The increase in domestic home entertainment was due to higher unit sales compared with Wreck-It Ralph and no comparable Marvel title in the prior-year quarter. Indeed, Frozen has been atop packaged-media sales charts nearly every week since its March 18 release.

Disney believes the title is among the top five franchises in the company’s history. Further exploitation includes a Frozen Broadway show, and other storytelling projects such as book publishing and interactive games.

Indeed, CEO Bob Iger said Frozen has generated more in revenue than many of Disney’s Marvel and Pixar films.

“Now, it was a great film, but it’s clear that momentum is building for that franchise,” Iger said. “You can expect us to take advantage of this for at least the next five years.”

Higher international theatrical results reflected the strength of Frozen in the current quarter compared with Wreck-It Ralph and Oz The Great And Powerful in the prior-year quarter.

Separately, Disney said that 90% of the top-selling merchandise at branded Disney Stores was related to Frozen.

“[Frozen] not only had great sales, but increased footfall at the stores,” CFO Jay Rasulo said. “With the release of the DVD, I think you’ll see the impact of the [movie] in Q4 and into Q1 next year. It will continue to be a [retail] driver for some time to come.”

Meanwhile, TV/SVOD distribution results were driven by more title availabilities worldwide. The current quarter included Monsters University, Marvel's Iron Man 3 and Marvel's Captain America: The First Avenger, compared with Marvel's The Avengers in the prior-year quarter.

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