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David Poland

By David Poland

The Disney Quarter

There is a lot of short-cut writing on the Disney 3rd Qtr result released today. I thought I would add a dew details to the conversation.
Disney’s fiscal Q3 ended June 27, 2009. So, the quarter is March 27 – June 27.
This year’s Q3 domestic theatrical box office is, literally and ironically, UP this year from last year. (It was down last year, a year after Pirates 3.)
Race To Witch Mountain (partial) – $18 million gross
Hannah Montana Movie (all theatrical) – $79.5m gross
Up (partial) – $246.2m gross
The Proposal (partial) – $63.9m
G-Force – $0
TOTAL GROSS – $407.6m
Step Up 2 – $15.2
College Road Trip $5.7m
Chronicles of Narnia: Prince Caspian – $137.4m
Wall-E – $45.3m
TOTAL GROSS – $203.6
It’s even very close to Q3 2007, when Pirates 3 launched
Pirates 3 (partial) – $290.7
Meet The Robinsons (total) – $95.5
Wild Hogs (partial) $42.2
TOTAL GROSS – $428.4
And for the record, in anticipation of Q4…
Up (partial) – $20m to-date
The Proposal (partial) – $79.1m to-date
G-Force – $45.4 to-date
Chronicles of Narnia: Prince Caspian – $1.7m
Wall-E – $178.5m
Swing Vote – $16.3m
Miracle At St Anna – $3.5
The culprit, as pointed out in the Quarterly Report, is DVD. Bedtime Stories, Confessions of a Shopaholic and Bolt were not competitive, as a group, with National Treasure 2: Book of Secrets and Enchanted, which shipped nearly 17 million units between them.
But what people probably don’t realize is that Enchanted did about 12% more than Bedtime Stories at the box office. And Bolt did about 10% less than DWA’s Bee movie the least before. If DVD corrolated directly, that would mean the two titles would have shipped about 14m units with a third film (Shopaholic) there to make up the difference. Dan In Real Life shipped about 2.3 million units with a similar gross the year before. So it should be pretty close.
But it’s not.
My estimate would be about 12.5m units shipping for those 3 titles, as opposed to the 2 big titles from the year before. That’s not a quality call. That’s a strong shift in the marketplace.
So… this is not so much a defense of Disney as it is a defense against quick and misleading assumptions. In domestic theatrical, Disney is doing better this summer. In the next quarter, even with G-Force holding strong, theatrical will probably be slightly down in the next quarter. But the only division doing better this year than last is interactive, which is still losing money, just losing less.
But note… as always… how small domestic theatrical seems in comparison to the big picture at these companies, whether it is up or down. There are many more balls in the air than people seem to realize… or want to spend the time to consider.

3 Responses to “The Disney Quarter”

  1. Direwolf says:

    Good review, DP.
    There are two other stories in the quarter though not specifically relevant to this blog.
    First, advertising trends at ESPN, ABC, and the local affiliates were pretty much the same as the March quarter. Stability, yes. Improvement, no.
    Second, them park operating income held up much better on a similar revenue decline to the March quarter. This is due to the fixed cost coverage coming from even promotion driven attendance and good cost cutting.
    I do not own Disney for my clients. I won CBS as a play on an ad recovery and Discovery Communications as a growth story given the much better ad trends at cable nets generally and at DISCA specifically. Of course, cable nets have the dual revenue stream and DISCA has the added benefit of the non-fiction focus which keeps programming expense in check and translates extremely well abroad.

  2. Direwolf says:

    One other thing…apparently Disney took a write-down on G-Force. Given the better than expected opening weekend, this suggests that rumnors of unusually production costs that were discussed here might have some truth to them.

  3. Chucky in Jersey says:

    Cable TV is not the only one with a dual revenue stream. Most local stations now collect retransmission consent fees from cable and satellite.
    Retrans consent is quite large and is only going to get larger.

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