The Walt Disney Co. Aug. 12 said its studio “content sales/licensing and other” business segment saw third-quarter revenue of $1.7 billion, down 23% from revenue of $2.2 billion during the previous-year period. Operating income decreased 58% to $132 million, from operating income of $314.2 million last year.
Disney said the decrease in operating income was due to lower home entertainment and theatrical distribution results. The decrease in home entertainment was due to lower unit sales of new-release titles, reflecting the performance of Raya and the Last Dragon and Soul in the current quarter compared with Star Wars: The Rise of Skywalker, Frozen II, Onward, Call of the Wild and Ford v. Ferrari in the prior-year quarter, along with lower catalog sales.
Disney’s first Premier Access release, Mulan, is the studio’s top-selling new release in 2021 with $4.4 million in combined SDVD/Blu-ray Disc unit sales.
Notably, Soul was released free to Disney+ subscribers on Christmas Day 2020, and made available on packaged media March 23. Raya and the Last Dragon was offered into traditional retail channels on May 18 — two months after its box office/Disney+ debut.
Disney reiterated that movies available for distribution in the home entertainment window have been impacted by the production delays and fewer theatrical releases since the onset of the pandemic.
The decrease in theatrical distribution results was primarily due to higher marketing expense for future releases and lower operating income from titles in release. Cruella was released in the current quarter, whereas there were no titles released in the prior-year quarter.