Fox DVD sales, earnings decline in Q2
Horton Hears a Who! can't compare to Die Hard 4, Fantastic Four 2
By Danny King -- Video Business, 2/5/2009
FEB. 5 | News Corp.'s filmed-entertainment profit for the fiscal second quarter plunged 72% as DVD titles such as Dr. Seuss' Horton Hears a Who! failed to keep pace with year-earlier releases including The Simpsons Movie, Live Free or Die Hard and Fantastic Four: Rise of the Silver Surfer.
20th Century Fox Home Entertainment's operating profit for the quarter ended Dec. 31 was $112 million, down from $403 million a year earlier. The division's sales declined 25% to $1.49 billion and accounted for 19% of News Corp.'s sales, down from 23% a year earlier, News Corp. said in a statement today.
Both Fox and Viacom's Paramount had about 15% of the U.S. home entertainment market, trailing only Warner Home Video's 21%. While Fox's Alvin and the Chipmunks was the No. 3 top-selling DVD in the U.S. last year and its Juno was the fifth most-rented DVD, the Horton DVD and Juno's pay-television debut failed to generate the demand of The Simpsons, the Die Hard installment and the pay-TV debut of Night at the Museum one year earlier, News Corp. chief financial officer David DeVoe said on a conference call with analysts today.
Last year, U.S. home entertainment spending fell 5.7% from a year earlier to $21.7 billion, despite Blu-ray Disc sales tripling to about $750 million, according to data compiled by Video Business and Rentrak.
"We've seen some pretty tough numbers," News Corp. president Peter Chernin said on the call today, estimating that the U.S. sell-through market declined about 15% last year.
Overall, News Corp. took a second-quarter loss of $6.42 billion, or $2.45 a share, compared with net income of $832 million, or 27¢, a year earlier, after the $8.44 billion write-down of assets such as the TV division's Federal Communications Commission's licenses and News Corp.'s newspaper unit. Revenue fell 8.4% to $7.87 billion.
Yesterday, Time Warner Inc. said its Warner Home Video profit for the most recently completed quarter rose 7.1% as the combination of DVD sales of such titles as The Dark Knight, the best-selling DVD of 2008, and lower marketing costs contributed to the division's earnings. The parent company took a $16 billion loss primarily from its cable and publishing businesses.
Earlier this week, Walt Disney, the No. 4 U.S. home entertainment company, said its studio entertainment unit's fiscal first-quarter earnings dropped 64% as DVD titles such as WALL-E and The Chronicles of Narnia: Prince Caspian failed to keep pace with such year-earlier releases as Pirates of the Caribbean: At World’s End, Ratatouille and High School Musical 2.
Viacom releases earnings next week.
