Disney Q4 Home Entertainment Revenue Declined Due to Fewer Releases, Lower Unit Prices

Disney’s sales/licensing of movies and TV shows across multiple channels, including packaged media, decreased 15% to $1.7 billion in the fourth quarter (ended Oct. 1), from $2 billion in the previous-year period. The segment’s operating loss increased $113 million to a loss of $178 million, from a loss of $65 million in the prior year loss.

The decrease in operating results was due to lower TV/SVOD and home entertainment distribution results, partially offset by higher theatrical distribution results and an increase at its stage play business, as stage play productions were generally shut down in the prior-year quarter due to COVID-19.

The decrease in TV/SVOD distribution results was due to lower sales volumes of film and episodic content in the current quarter and current quarter impairments of episodic content produced for third-party networks. Lower sales volumes included the impact of the shift from licensing content to third parties to distributing it on DTC services.

The decrease in home entertainment results was due to lower unit sales and a decrease in average net effective pricing of catalog and new-release titles. The decrease in unit sales of new-release titles was due to fewer titles available for release in the quarter. The increase in theatrical distribution results reflected the box office performance of Thor: Love and Thunder in the current quarter, compared with titles released in the prior-year quarter, which included Black Widow, Free Guy, Shang-Chi and the Legend of the Ten Rings and Jungle Cruise.

The home entertainment division’s top-selling packaged-media release in 2022 remains the animated musical Encanto.

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