Warner Home Video Q4 Revenue Drops 10%

10 Feb, 2016 By: Erik Gruenwedel

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Warner Home Video Feb. 10 reported fourth-quarter (ended Dec. 31, 2015) revenue of $720 million, down about 10% from revenue of $794 million during the previous-year period. Disc and electronic sellthrough of movies fell 8% to $532 million, from $578 million, while sales of TV shows declined 13% to $188 million, from $216 million.

For the fiscal year, revenue declined 10% ($251 million) to $2.24 billion from $2.49 billion in 2014. Sales of movie discs and EST dropped 10% ($196 million) to $1.71 billion, while sales of TV product declined 9.5% ($55 million) to $529 million.

The studio’s top-selling 2015 home entertainment release, Oscar-nominated American Sniper, generated $66.8 million in revenue from more than 3.9 million combined DVD/Blu-ray Disc unit sales. Oscar-nominated Mad Max: Fury Road sold 2.1 million units for $47.8 million, while earthquake actioner San Andreas sold $35.6 million worth of discs (1.7 million), to rank among the top-20 retail titles, according to The-Numbers.com.

Meanwhile, Warner Bros., which includes Warner Home Video, reported Q4 operating income of $366 million on revenue of $3.3 billion. That compared with operating income of $319 million on revenue of $3.8 billion in the previous-year period. For the year, operating income increased 22% ($257 million) to $1.41 billion on revenue of $12.9 billion — the latter up 3.7% ($466 million) from $12.5 billion in 2014.

The studio attributed the increase in operating income primarily to a $36 million foreign currency charge related to the re-measurement of Warner’s net monetary assets denominated in Venezuelan currency, and $41 million in asset impairments.

Warner said the uptick in Q4 revenue reflected higher video game and television revenue, partially offset by lower theatrical and home entertainment revenue, as well as the impact of foreign exchange rates. The increase in video game revenue was mainly due to the releases of Mortal Kombat X, Lego Dimensions and Batman: Arkham Knight. TV revenue increased primarily due to higher licensing fees rom the domestic availabilities of “2 Broke Girls,” “The Big Bang Theory,” “Person of Interest,” “Friends” and “Seinfeld.” Theatrical revenue declined as the prior year (2014) included revenue from the final two installments of The Hobbit Trilogy as well as The Lego Movie and Godzilla.

Finally, HBO Q4 operating income was flat at $393 million due to costs associated with the rollout and marketing of subscription streaming service HBO Now. Revenue increased 6% ($74 million) to $1.4 billion due to to increases of 3% ($37 million) in subscription revenue, and 20% ($37 million) in content and other revenue.

For the year, operating income increased 5% ($92 million) to $1.9 billion, while revenue increased 4% ($217 million) to $5.6 billion, due to increases of 4% ($170 million) in subscriptions and 6% ($47 million) in content and other revenue.
 

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