Lack of Home Entertainment Releases Contribute to 39% Drop in Q2 Disney Studio Operating Income

A lack of home entertainment releases in the second quarter (ended March 31) contributed to Disney reporting a 39% drop in studio operating income to $534 million compared to operating income of $875.4 million during the previous-year period. Revenue fell 15% to $2.1 billion from $2.4 billion last year.

The decrease in home entertainment results was due to lower unit sales reflecting the performance of Thor: Ragnarok and Star Wars: The Last Jedi in the prior-year record quarter compared to no comparable Marvel or Star Wars titles in the current quarter.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Other significant titles included Ralph Breaks the Internet in the current quarter and Coco in the prior-year quarter.

The results do not include Marvel Studios’ Avengers: Endgame, which was released in the current third quarter.

Growth in TV/SVOD distribution results was due to a benefit from the adoption of new revenue accounting guidance and increases in domestic pay television title availabilities and rates, partially offset by lower free television sales in part in anticipation of the launch support of Disney+.

Marvel’s ‘Avengers: Infinity War’ Home Video Sales Spur Q4 Disney Studio Results

Home entertainment sales of Marvel’s Avengers: Infinity War (physical and digital) helped increase Walt Disney Studios’ fourth-quarter (ended Sept. 30) operating income 64.5% ($378 million) to $596 million from $218 million during the previous-year period. Revenue increased 50% to $2.15 billion from $1.43 billion last year.

Infinity War has sold $90.5 million via 2.7 million combined DVD/Blu-ray Disc units since its Aug. 14 retail debut, according to The title is the sixth best-selling title of the year – but only the fifth best Disney title!

Other significant home entertainment titles included Solo: A Star Wars Story, released Sept. 25, while the prior-year quarter included Beauty and the Beast.

For the year, Black Panther, Stars Wars: The Last Jedi, Coco and Thor: Ragnarok rank among the top-five home entertainment releases in 2018.

“We’re very pleased with our financial performance in fiscal 2018, delivering record revenue, net income and earnings per share,” CEO Bob Igersaid in a statement. “We remain focused on the successful completion and integration of our 21st Century Fox acquisition and the further development of our direct-to-consumer business, including the highly anticipated launch of our Disney-branded streaming service late next year.”

Separately, Iger revealed the pending direct-to-consumer streaming service will be called Disney +, featuring original content from Marvel, Pixar and Lucasfilm.



Disney Ups Q2 Home Entertainment Revenue on ‘The Last Jedi’

Strong home media sales of Star Wars: The Last Jedi, Thor: Ragnarok and Coco in the second quarter (ended March 31) contributed to Walt Disney Studios generating a 21% increase in revenue to $2.5 billion, and segment operating income increasing 29% to $847 million.

Studio income grew as well due to increases in theatrical and TV/SVOD distribution results, partially offset by higher film cost impairments.

The increase in theatrical distribution results was due to the blockbuster success of Black Panther, with no comparable Marvel title in the prior-year quarter. This increase was partially offset by the performance of A Wrinkle in Time compared with Beauty and the Beast in the prior-year quarter.

Growth at home entertainment was driven by higher average net effective pricing and an increase in unit sales, both of which reflected the successful March 27 retail release of The Last Jedi.

The studio generated higher Last Jedi Blu-ray and DVD unit sales compared with disc unit sales of Rogue One: A Star Wars Story in the prior-year third quarter. In addition, Thor: Ragnarok and Coco outperformed Moana and Doctor Strange in year-over-year results.

Indeed, Coco and Thor: Ragnarok rank first and third among the top-selling discs in 2018, according to, which calculates the titles have brought in than $74 million in combined revenue.

Higher TV/SVOD distribution results were due to international growth and the domestic free television sale of Star Wars: The Force Awakens in the current quarter.

“Our ability to create extraordinary content like Black Panther and Avengers: Infinity War and leverage it across all business units, the unique value proposition we’re creating for consumers with our [direct-to-consumer] platforms, and our recent reorganization strengthen our confidence that we are very well positioned for future growth,” CEO Bob Iger said in a statement.

As expected, Disney’s equity stake in Hulu, which it co-owns with 21st Century Fox, Comcast and Time Warner, generated higher losses for its corporate partners than in the previous-year period. The loss at Hulu was driven by higher programming, marketing and labor costs, partially offset by growth in subscription and advertising revenue.