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Disney Studios Boss Reiterates Confidence in Packaged Media

17 Sep, 2014 By: Erik Gruenwedel

Walt Disney Studios president Alan Bergman

Alan Bergman tells investor group he wants people to buy Disney movies — including on disc

Listen to a Walt Disney fiscal call recently and you’ll probably hear CEO Bob Iger gush the praises of Netflix and other emerging digital distribution channels. Packaged media? Not so much.

In 2011 Iger infamously suggested the writing was on the wall for DVD, adding that while people were still buying them, they weren’t buying as many because they had “other things to do” — including consuming home entertainment on portable devices.

Fast-forward three years (an eternity in technology innovation) and consumers have a lot of digital options for home entertainment. Packaged media has largely been written off by the media and Wall Street — both institutions enamored with subscription streaming and Netflix.

So it was refreshing to hear Alan Bergman, president of The Walt Disney Studios, reiterate the vitality of packaged media and tell an investor group sales of Blu-ray Disc and DVD movies and TV shows are expected to reach $8 billion in 2014, despite ongoing 8% annual sales declines.

Speaking Sept. 17 at the Bank of America Merrill Lynch 2014 Media, Communications & Entertainment Conference in Los Angeles, Bergman said Disney remains committed to selling its brand to consumers across every imaginable product category, including packaged media.

And nowhere is that philosophy better illustrated than with the animated hit movie Frozen. In addition to generating more than $1 billion at the box office and being the highest-grossing animated movie ever, Frozen has become Walt Disney Studios Home Entertainment’s top-selling title in more than 10 years, according to Bergman.

“It’s the biggest Blu-ray title ever. It’s the biggest electronic sellthrough title ever,” Bergman said. “It’s amazing.”

The executive admitted packaged-media sales have been challenged over the past several years. He cautioned that people shouldn’t lose sight of the fact that disc sales remains a “very significant” business.

Meanwhile, Disney continues to focus efforts on digital ownership, including launching the cloud-based Disney Movies Anywhere digital sales platform in February.

Bergman said year-to-date sales of digital content are up 37%. He said Disney Movies Anywhere has partnered with iTunes, its app downloaded more than 4.5 million times. Disney is in discussions with third-parties to expand further the Disney Movies Anywhere platform.

“Our goal is interoperability,” Bergman said. “We want to buy a movie where they want and watch it where they want.”

When asked how Disney is fairing in the ongoing box office slump (down 15% year-over-year during the summer), Bergman said that with three of the top five theatrical releases of the year, the studio has weathered the slump well.

“We want people to see [our] movies in the theater and other sellthrough markets,” he said. That doesn’t mean premium VOD — the dormant industry initiative aimed at generating incremental revenue by offering select movies early in the home at a higher price.

“As it relates to premium VOD for [Disney], I don’t really see any substantial changes [i.e. embracing the concept] in the next few years,” Bergman said. At the same time, he said the studio actively seeks out early release windows [three-to-four weeks ahead of retail] for select digital titles.

“It’s been effective,” he said.

Bergman said the studio going forward seeks to replicate “getting it right” with Frozen; implementing a comprehensive cross-channel retail marketing campaign across its slate of branded tent pole titles (each with projected $400 million box office takes), including the highly anticipated Star Wars: Episode VII release in 2015.

“We have titles people want to buy on physical. [It] is still a very strong business,” he said.

About the Author: Erik Gruenwedel

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