Lionsgate forecasts 6% DVD revenue rise for fiscal 2008
Studio says it will benefit from single high-def format
By Danny King -- Video Business, 2/12/2008
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FEB. 12 | Lionsgate’s home entertainment revenue for fiscal 2008 will rise about 6% based on record current quarter DVD sales from releases, such as of War and 3:10 to Yuma, and an expected boost in high-definition content sales from the emergence of a single format.
Home entertainment sales for the year ending March 31 will be about $560 million, Lionsgate president Steve Beeks said on a conference call this morning.
Beeks estimated that industry spending on DVDs for the first five weeks of 2008 rose 2% from a year earlier and may triple to about $1 billion for calendar 2008 as movie studios such as Warner and retailers such as Netflix and Best Buy begin to push Sony’s Blu-ray Disc format.
“We bet on the right horse with the Blu-ray high-definition format, which should deliver incremental high-margin revenue from DVDs in the years to come,” Lionsgate CEO Jon Feltheimer said on the call.
Additionally, revenue from digital downloads will rise as more customers use devices such as Apple TV, TiVo and Vudu to order films from home, Beeks said. Digital downloading revenue, which accounted for less than 1% of Lionsgate’s home entertainment sales for fiscal 2007, may jump to as much as 15% of home entertainment revenue by 2010, Beeks said.
Yesterday, Lionsgate said fiscal third-quarter home entertainment revenue fell 7.5% to $105.1 million as current DVD releases, such as Bratz and Skinwalkers, failed to match revenue from late 2006 releases Akeelah and the Bee and An American Haunting.
Overall, earnings for the quarter dropped 90% to $2 million, or 2¢ a share, from $20.5 million as expenses jumped. Operating, distribution and marketing expenses were 89% of revenue, up from 81% a year earlier, the indie studio company said.
Revenue increased 14% to $290.9 million.
Motion picture revenue rose 15% on major theatrical releases including Saw IV and the Tyler Perry film Why Did I Get Married?. International sales doubled to $53.8 million on overseas releases of Saw IV, Saw III and Good Luck Chuck.
The company was expected to earn 7¢ on $289.4 million in revenue, the average estimates in a Thomson Financial survey.