August 10, 2022
The Walt Disney Co. on Aug. 10 said revenue in its “content sales/licensing and other” business segment increased 26% in the third quarter (ended July 2) to $2.1 billion from $1.66 billion in the previous-year period. The segment, which includes home entertainment, saw operating income of $132 million in the previous-year period reverse to a loss of $27 million this year.
The decrease in operating results was due to an unfavorable foreign exchange impact and lower TV/SVOD and home entertainment distribution results. These decreases were partially offset by an increase in Disney’s stage play business, as productions were generally shut down in the prior-year quarter due to COVID-19, and higher theatrical distribution results.
The decrease in TV/SVOD distribution results was due to a decrease in sales of theatrical film content primarily due to a shift from licensing content to third parties to distribution on Disney’s direct-to-consumer services.
The decrease in home entertainment results was due to lower unit sales of catalog titles. The increase in theatrical distribution results was due to the strong performance of Doctor Strange in the Multiverse of Madness in the current quarter compared with Cruella in the prior-year quarter. Current quarter releases also included Pixar Animation’s Lightyear and The Bob’s Burgers Movie.
Disney’s top-selling packaged-media release through July 2 was the animated Encanto. Disney’s top box office release with more than $1 billion in ticket sales, Doctor Strange in the Multiverse, was released into packaged-media retail channels on July 26. Marvel Studios’ Thor: Love and Thunder has topped $704 million at the global box office to become the highest-grossing Thor movie.
That said, Disney CFO Christine McCarthy said the home entertainment/licensing segment would see an additional revenue decline of $100 million in the current fourth quarter as the company transitions content licensing away from third-party licensees to the Disney+ and Hulu streaming platforms.