Walt Disney Studios plans to eliminate as many as 25o jobs, or 5 percent of its global workforce, as early as next week, the Los Angeles Times reports. Many of the cuts, according to sources with knowledge of the plans, will be in the studio‚Äôs distribution operations in Burbank, Calif.
Disney would not be the first studio to downsize amid changing home entertainment markets: Santa Monica-based Lionsgate cut staff in its home entertainment division earlier this year, while Sony Pictures reduced its staff by 450 positions in 2010.
With 3D screenings accounting for less than half of the opening-weekend revenue for DreamWorks Animation‚Äôs ‚ÄúKung Fu Panda 2,‚ÄĚ some financial analysts fear that consumers have begun to tire of 3D films‚Äô premium ticket prices (via The New York Times). The performance of ‚ÄúKung Fu Panda‚ÄĚ ‚ÄĒ relatively soft compared to previous 3D movie openings ‚ÄĒ follows analyst disappointment in 3D receipts for Disney‚Äôs ‚ÄúPirates of the Caribbean: On Stranger Tides‚ÄĚ earlier this month. Other analysts, however, continue to believe in 3D films‚Äô general consumer appeal, attributing any underperformance of a given title to other factors (via Home Media Magazine).
Stereoscopic screenings of Disney‚Äôs fourth ‚ÄúPirates of the Caribbean‚ÄĚ film, ‚ÄúOn Stranger Tides,‚ÄĚ represented 46 percent of the film‚Äôs $90.1 million domestic opening-weekend gross ‚ÄĒ even as 3D claimed 66 percent of the 4,155 screens showing the film.
The relatively low box office percentage that 3D claimed for ‚ÄúStranger Tides‚ÄĚ alarms BTIG Research analyst Richard Greenfield, who maintains that moviegoers are tired of paying premiums at theaters. Regarding the ongoing prospects of 3D movies, Greenfield says, ‚ÄĚpricing remains our single biggest concern, especially with so many 3D movies aimed at the family segment.
‚ÄúThis coming weekend,‚ÄĚ Greenfield continues, ‚Äú[DreamWorks Animation‚Äôs] ‚ÄėKung Fu Panda 2‚Äô is set to open worldwide. In rural America ‚ÄĒ such as at Regal‚Äôs Trussville 16 in Birmingham, Alabama, a ‚Äėchild‚Äôs‚Äô 3D ticket for an afternoon presentation this Friday will cost $11.00 vs. $7.50 for 2D ‚ÄĒ a 46% premium.‚ÄĚ
Still, neither exhibitors nor studios express disappointment over 3D‚Äôs varying levels of success. Dave Hollis, Disney‚Äôs EVP of motion pictures sales and distribution, tells Variety, ‚ÄúGiving consumers the choice [between 2D and 3D is very important in helping drive global box office. There are some consumers who will gravitate toward 3D, and there are those that won‚Äôt.‚ÄĚ
Abroad, 3D accounted for 66 percent of the ‚ÄúStranger Tides‚ÄĚ film‚Äôs record-setting $260.4 million opening weekend.
‚ÄúI had the whole Beatles collection anyway,‚ÄĚ laughs Bob Iger when Charlie Rose prods the Disney chief executive about his recent iTunes spending. ‚ÄúI ripped ‚ÄĒ legally ‚ÄĒ my Beatles CDs to my Apple devices. But then when it became available through the [iTunes] store, I bought that too ‚ÄĒ even though it was redundant. I got the album art with it.‚ÄĚ
Yet Iger acknowledges in his March 3 appearance on the show that few entertainment consumers these days are such ‚Äúnuts‚ÄĚ as he.
Digital distribution models for films ‚ÄĒ including electronic sell-through and video-on-demand ‚ÄĒ have all grown ‚Äúnicely,‚ÄĚ Iger says. ‚ÄúBut while it‚Äôs grown fast, it hasn‚Äôt gotten large enough to make up for the loss of the sale of physical goods.‚ÄĚ
Iger estimates that the DVD industry is down by roughly 15% year to year. ‚ÄúBut people are still buying a lot‚ÄĚ of discs, he maintains. ‚ÄúThey‚Äôre not buying as many of them. And I‚Äôd argue the primary reason for that is that they have other things to do….I look at my kids‚Äô generation, and it‚Äôs not just about watching TV or a movie at home ‚ÄĒ it‚Äôs doing other things.‚ÄĚ
The changing dynamic of the home entertainment market leads Iger to qualify digital distribution‚Äôs long-term prospects. ‚ÄúWhether the whole [digital movie distribution market] will ultimately get larger than what it was before, when we were just selling DVDs, I don‚Äôt know. We‚Äôll see growth in international markets, as technology expands. But you‚Äôre still facing a more competitive world.‚ÄĚ
Walt Disney Studios and Sony Electronics are teaming in a U.S. to provide both consumer and retail education, promotion and marketing support for in-home 3D devices and content. The co-promotion includes advertising and retail execution, as well as product bundling, including the Blu-ray 3D debut of Disney‚Äôs ‚ÄúAlice in Wonderland.‚ÄĚ
Launching during the holiday season, the nationwide campaign will offer purchasers of select Sony 3D Bravia HDTVs a choice between ‚ÄúAlice‚ÄĚ or the studio‚Äôs family-geared ‚ÄúBolt‚ÄĚ on Blu-ray 3D.
The companies said they would extend the offer to ‚Äúmany markets outside of the U.S.‚ÄĚ as well.
Other major studios releasing Blu-ray 3D discs have partnered with an electronics company to launch their first 3D products. Last week, reports surfaced that 20th Century Fox Home Entertainment would bundle the Blu-ray 3D version of ‚ÄúAvatar‚ÄĚ with select 3D devices from Panasonic. DreamWorks Animation and Samsung Electronics are in a deal to bundle movies from the studio such as ‚ÄúHow To Train Your Dragon‚ÄĚ with Samsung‚Äôs ‚Äú3D starter kits‚ÄĚ for home setups.
Premiums for 3D screenings are helping to propel a second Disney film, ‚ÄúToy Story 3,‚ÄĚ past the $1 billion sales mark today, according to Deadline Hollywood. The studio becomes the first to release two $1 billion films in a single year; ‚ÄúAlice in Wonderland,‚ÄĚ which saw theatrical release in March, grossed $1.02 billion in theaters worldwide.
Walt Disney Studios plans to be ‚Äúaggressive‚ÄĚ in tweaking its home entertainment release windows, with the possibility of offering early premium access to films, Disney CEO Robert Iger said yesterday in a quarterly earnings call with analysts (via paidContent).
In contrast to previous years, Disney is now seeing DVD sales successes on a ‚Äútitle by title‚ÄĚ basis, Iger told analysts. In tandem with developing new release windows, he said, ‚Äúwe have to be judicious about how many films we release‚ÄĚ as packaged home entertainment.
The executive declined to offer specific ideas about pricing or availability under new window schemes.
The Digital Entertainment Group (DEG) named its new board of directors for the coming fiscal year (Aug. 1 ‚Äď July 31), while announcing that its chairman, Bob Chapek, was stepping down.
Chapek, who was the group‚Äôs president before being elected as its chairman in 2007, advanced at Disney late last year to become the studio‚Äôs distribution president. Lori MacPherson, EVP and GM of Walt Disney Studios Home Entertainment, joins the DEG as Disney‚Äôs board representative.
TWICE notes that four of the DEG‚Äôs five-member executive committee were re-elected, with David Bishop of Sony Pictures Home Entertainment joining the committee as VP. Remaining on the executive committee are: Ron Sanders of Warner Home Video, president; Craig Kornblau of Universal Studios Home Entertainment, VP; Mike Dunn of 20th Century Fox Home Entertainment, secretary; and Eisuke Tsuyuzaki of Panasonic, CFO.
Companies joining the trade group include A&E Television Networks, Amazon.com, IMAX Corp., RealD, Samsung Electronics, SRS Labs, Testronics, and Verance.
Following several high-profile disappointments at the box office, the debate is on as to whether movie studios are in a slump. The New York Times spends 1,200 words on whether studios can win back ‚Äúturned-off consumers‚ÄĚ with the likes of ‚ÄúToy Story 3.‚ÄĚ Movie City News‚Äôs David Poland vehemently responds: ‚ÄúUntil you get to YEARS of a down cycle, there is zero legitimacy to this notion that audiences are sitting at home, waiting for the industry to deliver better movies.‚ÄĚ In any event, Sony‚Äôs ‚ÄúKarate Kid‚ÄĚ remake surpassed expectations this past weekend, grossing $56 million according to the studio (via The Wrap). The LA Times‚Äô Joe Flint offers links to still more analysis.
Sales of Walt Disney Studios‚Äô ‚ÄúAlice In Wonderland‚ÄĚ bested other new releases such as Universal‚Äôs ‚ÄúThe Wolfman‚ÄĚ and Fox‚Äôs ‚ÄúBurn Notice: Season Three‚ÄĚ for the week ended June 6, according to Rentrak. ‚ÄúAlice‚ÄĚ sold four times as many discs as ‚ÄúThe Wolfman,‚ÄĚ according to fellow sales tracker Nielsen VideoScan (via Home Media Magazine). The Nielsen service adds that Blu-ray comprised 37% of Disney‚Äôs total first-week ‚ÄúAlice‚ÄĚ sales.
Neither Rentrak nor VideoScan have released specific sales figures for the title. Analysts have been trying to measure the impact on sales from the movie’s availability via Redbox kiosks and Netflix’s disc rental; Disney claims there is no cannibalization. Rentrak (via PR Newswire)
Disney‚Äôs film studio drove the company‚Äôs 55% year-over-year increase in net income during its fiscal second quarter. The 3D ‚ÄúAlice in Wonderland,‚ÄĚ released in theaters March 5, surpassed $960 million in global ticket sales. Cost-cutting programs also added to the studio‚Äôs bottom line. By The New York Times
Some five months after the ouster of longtime marketing president Jim Gallagher, Walt Disney Studios has found his successor: advertising executive MT Carney.
The Wrap reports that Carney, a founding partner of communications agency Naked Communications New York, is a Hollywood outsider — consistent with studio chairman Rich Ross‚Äô aim to bring a fresh marketing perspective to Disney. The appointment completes an executive restructuring that saw Ross promote former home entertainment president Bob Chapek to head distribution across theatrical, pay TV, and digital platforms as well. By TheWrap
The UK‚Äôs Vue cinema chain has agreed to show ‚ÄúAlice In Wonderland‚ÄĚ despite its 13-week release window, after Disney agreed to make a formal pledge to retain a 17-week standard for most of its films. But as of Feb. 22, Odeon, which owns one quarter of British cinema screens, still had no plans to show the film. By the Times Online
Extending an olive branch to theater owners, Walt Disney Studios president of distribution Bob Chapek on Thursday assured exhibitors that the studio supports maintaining theatrical windows. “We remain committed to theatrical windows, with the need for exceptions to accommodate a shortened time frame on a case-by-case basis, such as with Disney’s ‘Alice in Wonderland,’” Chapek said in the one-paragraph statement. By Variety
Following news that UK exhibitors are being asked to accept a tightened theatrical window on Disney‚Äôs spring tentpole ‚ÄúAlice in Wonderland,‚ÄĚ The Hollywood Reporter says that U.S. theater owners have been similarly approached. Disney is talking about a theatrical run of just under 13 weeks on ‚ÄúAlice.‚ÄĚ It‚Äôs likely that Disney also will accelerate the availability of ‚ÄúAlice‚ÄĚ on VOD, which home-entertainment execs have come to view as less of a threat to DVD/Blu-ray income and more as a complementary revenue stream. By The Hollywood Reporter
A rise in home entertainment profits helped Walt Disney‚Äôs studio division post a 30% increase in operating income for its first quarter, the company announced Feb. 9.
The studio recorded operating income of $243 million on relatively flat revenues of $1.9 billion. Higher domestic home entertainment results were primarily due to lower distribution costs and marketing expenses, driven by cost reduction initiatives, and lower production cost amortization and participation expense.
Disney said the decrease in amortization and participation expense reflected the strong performance of Disney/Pixar‚Äôs ‚ÄúUp‚ÄĚ and romantic comedy ‚ÄúThe Proposal‚ÄĚ in the current quarter, compared to ‚ÄúWALL-E‚ÄĚ and ‚ÄúThe Chronicles of Narnia: Prince Caspian,‚ÄĚ which had high participation costs, in 2009.
Walt Disney Studios Chairman Rich Ross has met with his executives and told them that he plans to hire someone outside of Hollywood’s usual movie circles to replace former marketing President Jim Gallagher, ousted in the fall. He has narrowed the list of candidates and is meeting with a small number of finalists, says a person close to the matter. By the Los Angeles Times
Oren Aviv, head of film production at The Walt Disney Studios, is the latest executive to resign from the studio under the new leadership of Rich Ross. Disney did not immediately announce a replacement. Deadline Hollywood speculates that Ross, who became Chairman of the studio in October, will promote a corporate ally from within. Via Deadline Hollywood
The Walt Disney Studios plans to start releasing 3D content for the home on Blu-ray beginning in the fourth quarter of 2010 with ‚ÄúDisney‚Äôs A Christmas Carol‚ÄĚ as well as a 3D showcase disc. Via PR Newswire
Carolina Lightcap has been named President of Disney Channels Worldwide, filling the opening created by Rich Ross‚Äô recent move to the Walt Disney Studios. Lightcap has been with Disney since 2000, most recently serving in the dual role of SVP of programming for Disney Channel Latin America and CMO for all of Disney’s operations in the region. By Variety
In its review of Rich Ross‚Äô first 50 days as head of Walt Disney Studios, the Los Angeles Times speculates on how the marketing and distribution shake-up at the studio could lead to industry-wide changes in practice. By the Los Angeles Times
Disney chief Robert Iger calls the fourth-quarter financial results of Walt Disney Studios ‚Äúextremely disappointing,‚ÄĚ as the company takes a write-down on its ‚ÄúA Christmas Carol‚ÄĚ and posts a loss for the second consecutive quarter. However, the unit could rebound on the strength of its upcoming film slate, which includes the animated ‚ÄúThe Princess and the Frog‚ÄĚ (Dec. 11) and Tim Burton‚Äôs adaptation of ‚ÄúAlice in Wonderland‚ÄĚ (March 5). By The New York Times
Mark Zoradi, president of Walt Disney Co.‚Äôs motion pictures, group, is leaving after 29 years with the studio, as Disney pushes ahead with restructuring of its marketing and distribution operations. By the Los Angeles Times