Disney Tests Shorter Theater Runs to Get DVDs in Stores Sooner
Source:BusinessWeek Date:Wednesday, 10 February 2010. Article Type:General
Feb. 10 (Bloomberg) -- Walt Disney Co., the world’s biggest media company, is in discussions with cinema owners over how long to wait before selling newly released movies on DVD, Chief Executive Officer Robert Iger said.
The company, home to the Pixar animation studio, is experimenting with the timing in response to the drop in industry DVD sales, Iger said yesterday on a conference call following fiscal first-quarter results. The plan risks alienating exhibitors, who have resisted any narrowing of the so-called theatrical window. On average, the DVD arrives in stores about 17 weeks after a film opens in theaters, according to DVD & Blu-ray Release Report, which tracks the market.
“It’s time on a case-by-case basis, movie by movie, to really take a look at how we’re windowing the home-video product into the marketplace,” Iger said. A healthy home-video business is “in the best interests of the theater owners” because it will allow studios to keep investing in content, he said.
Disney told U.K. theater owners it wants to release “Alice in Wonderland” on DVD 13 weeks after it opens March 5 in theaters, according to Jonathan Friedland, a spokesman for Burbank, California-based Disney. The company wants to avoid competing for viewers with the World Cup soccer tournament, he said.
Theater owners have long said a shorter theatrical window won’t help the DVD market and may damage ticket sales.
“DVDs and the home market are so commoditized, it’s a race for the bottom,” Patrick Corcoran, a spokesman for the National Association of Theatre Owners, said in an earlier interview. By contrast, theater attendance is growing even as exhibitors raise ticket prices, he said.
DVD Sales
Dick Westerling, a spokesman for Knoxville, Tennessee-based Regal Entertainment Group, the largest U.S. theater chain, didn’t immediately respond to a phone call yesterday seeking comment after business hours.
The economy, piracy and competition from social media and other forms of entertainment such as video games have crimped DVD sales, Iger said.
DVD sales have been the most-profitable part of Hollywood studios’ business, according to Adams Media Research. U.S. sales of DVDs and Blu-ray discs fell by 12 percent to 13 percent in 2009, the Monterey, California-based researcher estimates.
Disney rose 3 cents to $29.87 in extended trading after releasing the results, which exceeded analysts’ estimates. The shares added 36 cents to $29.84 yesterday in New York Stock Exchange composite trading and gained 42 percent in 2009.
First-quarter net income of $844 million, or 44 cents a share, compared with profit of $845 million, or 45 cents, a year earlier, when a gain on the sale of TV stations boosted results, Disney said yesterday.
Results in the theme-park, cable and broadcast television, and film units helped the company surpass Wall Street estimates, said David Joyce, an analyst at Miller Tabak & Co. in New York.
Disney’s plan for a shorter U.K. theatrical release for “Alice in Wonderland” was reported on Feb. 8 by the Hollywood Reporter.
By Andy Fixmer.