Pandemic Undermined Warner Bros. Home Entertainment in 2020

With a lack of new theatrical product for retail channels, Warner Bros. Jan. 27 reported $495 million in fourth-quarter (ended Dec. 31, 2020) revenue in video games and home entertainment. That was down 12% from revenue of $565 million in the previous-year period. For the fiscal year, video games, physical/digital movie and related content sales dropped about 30% to $1.59 billion, from $2 billion in 2019.

Warner attributed the decline primarily to the postponement of theatrical and home entertainment releases in 2020 due to the pandemic, which led to limited capacity and continued closure of movie theaters in many locations throughout the country, as well as unfavorable comparisons to the prior year, which included the early fourth-quarter release of the Oscar-winning Joker.

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Theatrical revenue dropped 25% to $1.18 billion, from more than $1.57 billion in the prior-year period. For the year, theatrical revenue dropped 26% to $4.39 billion, from $5.98 billion in 2019.

Top-selling Warner DVD/Blu-ray Disc releases in 2020 included January’s Joker and May’s Birds of Prey. Warner had little new content in the retail pipeline thereafter.

Television product revenue decreased primarily due to lower TV production revenue from production delays related to COVID-19, which impacted delivery for the 2020-21 broadcast season, and lower TV licensing.

Total studio operating income in the quarter remained relatively unchanged at $791 million, compared with $805 million in the previous-year period. For the year, operating income dropped 16% to $2 billion, from $2.38 billion in 2019.

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