Despite the lingering effects of the COVID-19 pandemic and shortage of new films, Universal Pictures Home Entertainment April 29 reported first-quarter (ended March 31) revenue of $282 million, which was up slightly (2.9%) from revenue of $274 million during the previous-year period.
The revenue topped Universal’s theatrical ticket sales of $39 million, a total that paled in comparison to the box office of $316 million during the previous-year period. Theatrical was undermined by ongoing pandemic-related issues, including limited cineplex seating capacity and the studio’s decision to hold back release of major releases.
Top disc sellers in the quarter included Liam Neeson actioner Honest Thief with $2.9 million in combined DVD/Blu-ray Disc unit sales. The low-budget movie has proved to be a box office hit during the pandemic, generating $14.1 million at domestic screens, $31.1 million worldwide since its Oct. 8, 2020, debut. Director Sam Mendes’ World War I drama 1917 added $1.1 million in disc sales; and The Office: The Complete Series included $6.5 million in sales.
Overall studio revenue decreased 0.6% to $2.4 billion, primarily reflecting lower theatrical revenue, offset by higher content licensing revenue. Theatrical revenue decreased 87.7%, primarily driven by the deferral of theatrical releases as a result of theater closures and theaters operating at reduced capacity due to COVID-19.
Content licensing revenue increased 14.1%, primarily due to a new licensing agreement (i.e. WWE Network) for content that became exclusively available for streaming on Peacock during the quarter. Adjusted pre-tax earnings increased 65.7% to $497 million, reflecting lower revenue, more than offset by lower operating costs.
The decrease in operating costs was primarily driven by lower advertising, marketing and promotion expenses, partially offset by higher programming and production expenses. The decrease in advertising, marketing and promotion expenses was primarily due to a reduced number of theatrical releases as a result of COVID-19.
The higher programming and production expenses were primarily driven by costs associated with the new licensing agreement with Peacock during the quarter, partially offset by lower amortization associated with theatrical releases in the current period.