Disney Q1 Home Entertainment Sales Decline

Walt Disney Studios Home Entertainment Feb. 6 said first-quarter (ended Dec. 30, 2017) revenue declined 29% to $390 million due to lower unit sales of Pixar’s Cars 3 compared to Finding Dory in the previous-year period. The studio generated $547 million in sales in the previous-year period.

Cars 3 generated $44.1 million on more than 1.7 million combined DVD/Blu-ray Disc sales, according to Finding Dory generated $84.4 million on more than 4.7 million disc sales in 2016. Totals do not include 4K UHD Blu-ray and digital retail.

The decline is relative considering Cars 3 remains the 13th best-selling disc in 2017. Indeed, Disney had six of the top 14 selling discs in 2017.

Lower home entertainment revenue was due to a 23% drop in unit sales and 3% dip in average net effective pricing — the wholesale selling price adjusted for discounts, sales incentives and returns.

Overall studio revenue for the quarter was flat at $2.5 billion and segment operating income decreased 2% to $829 million as an increase in theatrical distribution was more than offset by decreases in home entertainment and TV/SVOD distribution results as well as lower income from consumer products & interactive media segment revenue share.

TV/SVOD and other distribution revenue dropped 7% to $945 million from $1.01 billion last year.

Theatrical revenue reflected the success of Star Wars: The Last Jedi and Thor: Ragnarok in the current quarter compared to Rogue One: A Star Wars Story and Doctor Strange in the prior-year quarter. Other significant releases in the current quarter included Coco, while the prior-year quarter included Moana.

Indeed, Moana was the top-selling disc in 2017 with more than $114 million in revenue from combined disc sales of more than 4.3 million units.

Lower TV/SVOD distribution results were primarily due to a decrease from pay-television driven by the domestic availability of two key titles in the prior-year quarter compared to one key title in the current quarter.

The prior-year quarter included Captain America: Civil War and Jungle Book, while the current quarter included Guardians of the Galaxy Vol. 2.

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