February 9, 2022
Disney’s “Content Sales/Licensing and Other” business segment, which includes home entertainment, posted a first quarter (ended Jan. 1, 2022) operating loss of $98 million, compared with net income of $188 million in the previous-year period. Revenue for the quarter increased 43% to $2.4 billion, from $1.67 billion in the previous-year period.
Disney said the decrease in operating results was due to lower theatrical distribution results and higher film cost impairments, partially offset by higher TV/SVOD distribution revenue.
The decrease in theatrical distribution revenue was due to losses on titles released in the current quarter, including Oscar-nominated West Side Story and Nightmare Alley, animated musical Encanto, The King’s Man, Eternals, and The Last Duel. There were no significant titles released in the prior-year quarter.
Despite their Oscar nominations, West Side Story and Nightmare Alley generated just $64 million and $30 million, respectively, at the global box office.
Disney said the aforementioned movies incurred “significant” marketing costs before and throughout the theatrical release, which it said contributed to a loss during theatrical distribution.
Higher TV/SVOD distribution results were due to higher sales of both episodic television and film content to proprietary and third-party platforms. The increase in episodic television content sales reflected more significant titles sold in the current quarter. Higher sales of film content were driven by an increase in sales of library content and more title availabilities in the free television window.