Given the incredible effect Toy Story 3 has had on the market since release (both in terms of box office and merchandise), it isn’t exactly surprising that Variety are reporting that Disney have announced soaring profits for the third quarter of the year.
Incredibly, the studio posted profit figures of $123 million compared with a $12 million loss in the same period last year. Overall, revenue rose 16% to $10 billion, while profits increased 37% to $2.5 billion.
The uplift has been pinpointed as being down to the healthy box office returns of Iron Man 2 and the aforementioned Pixar offering, as well as healthy DVD and Blu-Ray sales for Alice in Wonderland (despite the, I think, unfair critical reaction). The big man on campus at the Mouse House, Robert Iger declared in a call to investors (who could probably be heard audibly unclenching in relief after usually more gloomy news) that their strategic focus on branded fare is paying off well for the studio.
The profits have even been healthy enough to take the hit of disappointing domestic purses for Prince of Persia: The Sands of Time and The Sorceror’s Apprentice (though the relatively impressive foreign performance of PoP will probably have helped soften that blow).
The figures look to be vindication for the studio’s decision to experiment with an early release of Alice (a month quicker than usual), as the swift release allowed the studio to cement already strong figures with the almost $67 million that the release’s three versions have brought in since June 1st.
Despite those impressive home release figures for Alice, Iger confirmed that Disney wouldn’t be resting on its laurels, having identified the DVD market as a difficult prospect:
The DVD market is challenged and will continue to be challenged… You’re dealing with a title-to-title environment. It’s very title driven. Collectability doesn’t seem to be as important as it once was other than for certain brands like Pixar.
In response, Iger confirmed that the studio would be actively seeking new approaches to attempt to continue their rude financial health. He said that Disney “will become aggressive in experimenting with new windows, including digital” to try and encourage more of a return out of the home entertainment market going forward.
According to Variety, Iger remained tip-lipped on the subject of the sale of Miramax, other than saying that the $660 million sale to the Ron Tutor headed consortium “reflects a focus on maximising our assets and devoting resources to branded entertainment with franchise potential” and adding that the sale will only have a minimal impact of future Disney profits.
Also within the Disney stable, ESPN and ABC both posted profits with the sports network’s performance buoyed by an increase of 31% in ad sales from their World Cup coverage, and ABC by overseas sales of Lost, Ghost Whisperer and Castle.
Further business reflected a relative uplift in attendance at the company’s theme parks, though it is still incomparable to periods before the economic downturn of last year, and overall the picture was relatively conservative:
Although profits decreased 8% to $477 million, revenue for Disney’s parks and resorts division increased 3% during the quarter to $2.8 billion. While attendance at Disney’s overseas parks, including Disneyland Paris and Hong Kong Disneyland, was stronger than expected, ticket sales in Orlando and Anaheim was still down 3% and 4% respectively, while the additional of a new ship to Disney’s cruise business also ate into profits.
However, the pricey addition of new attractions like the World of Color light and water show is “bringing record crowds” to Disney’s California Adventure park in Anaheim, Iger said. This month, Disney also raised ticket prices at Walt Disney World and Disneyland to move away from the practice of discounting to attract parkgoers.
Aside from the movie arms of the Mouse House, it looks like the company is enjoying the greatest return from its games wing. Following the recent acquisition of Playdom for $563 million and mobile gamemaker Tapulous, plus this week’s launch of “World of Cars Online,” revenue from interactive media soared 74% to $197 million. Losses in the division were also cut by $10 million to $65 million against the same quarter a year ago.
Going forward, while remaining in the console game market- creating Disney-branded games across all formats, like the recently successful Toy Story 3 tie-in, Disney will devote more money to the burgeoning online gaming business, which Iger claimed will grow more than 30% a year:
We’re all aware of the rapid growth of social networks and the huge popularity of games on them… We feel it’s essential for us to have a presence. We now have a diversified games business to meet consumer interests.
So times are looking good at the minute for the company, and with the intelligent approach to new markets that Iger has outlined, they can only go from strength to strength.
