Job Cuts Loom at Disney’s Distribution Operations: Report

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’s 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.

Analysts Debate 3D Box Office Receipts

With 3D screenings accounting for less than half of the opening-weekend revenue for DreamWorks Animation’s “Kung Fu Panda 2,” some financial analysts fear that consumers have begun to tire of 3D films’ premium ticket prices (via The New York Times). The performance of “Kung Fu Panda” — relatively soft compared to previous 3D movie openings — follows analyst disappointment in 3D receipts for Disney’s “Pirates of the Caribbean: On Stranger Tides” earlier this month. Other analysts, however, continue to believe in 3D films’ general consumer appeal, attributing any underperformance of a given title to other factors (via Home Media Magazine).

Analyzing the 3D Numbers of Disney’s Fourth ‘Pirates’ Film

Stereoscopic screenings of Disney’s fourth “Pirates of the Caribbean” film, “On Stranger Tides,” represented 46 percent of the film’s $90.1 million domestic opening-weekend gross — even as 3D claimed 66 percent of the 4,155 screens showing the film.

The relatively low box office percentage that 3D claimed for “Stranger Tides” 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, ”pricing remains our single biggest concern, especially with so many 3D movies aimed at the family segment.

“This coming weekend,” Greenfield continues, “[DreamWorks Animation’s] ‘Kung Fu Panda 2’ is set to open worldwide. In rural America — such as at Regal’s Trussville 16 in Birmingham, Alabama, a ‘child’s’ 3D ticket for an afternoon presentation this Friday will cost $11.00 vs. $7.50 for 2D — a 46% premium.”

Still, neither exhibitors nor studios express disappointment over 3D’s varying levels of success. Dave Hollis, Disney’s EVP of motion pictures sales and distribution, tells Variety, “Giving 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’t.”

Abroad, 3D accounted for 66 percent of the “Stranger Tides” film’s record-setting $260.4 million opening weekend.

Iger Waxes on Home Entertainment Business with Charlie Rose

“I had the whole Beatles collection anyway,” laughs Bob Iger when Charlie Rose prods the Disney chief executive about his recent iTunes spending. “I ripped — legally — my Beatles CDs to my Apple devices. But then when it became available through the [iTunes] store, I bought that too — even though it was redundant. I got the album art with it.”

Yet Iger acknowledges in his March 3 appearance on the show that few entertainment consumers these days are such “nuts” as he.

Digital distribution models for films — including electronic sell-through and video-on-demand — have all grown “nicely,” Iger says. “But while it’s grown fast, it hasn’t gotten large enough to make up for the loss of the sale of physical goods.”

Iger estimates that the DVD industry is down by roughly 15% year to year. “But people are still buying a lot” of discs, he maintains. “They’re not buying as many of them. And I’d argue the primary reason for that is that they have other things to do….I look at my kids’ generation, and it’s not just about watching TV or a movie at home — it’s doing other things.”

The changing dynamic of the home entertainment market leads Iger to qualify digital distribution’s long-term prospects. “Whether the whole [digital movie distribution market] will ultimately get larger than what it was before, when we were just selling DVDs, I don’t know. We’ll see growth in international markets, as technology expands. But you’re still facing a more competitive world.”

Home Media Magazine pulls other salient quotes; full interview here.

Disney’s ‘Alice’ To Make 3D Blu-ray Debut With Sony Products

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’s “Alice in Wonderland.”

Launching during the holiday season, the nationwide campaign will offer purchasers of select Sony 3D Bravia HDTVs a choice between “Alice” or the studio’s family-geared “Bolt” on Blu-ray 3D.

The companies said they would extend the offer to “many markets outside of the U.S.” 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 “Avatar” with select 3D devices from Panasonic. DreamWorks Animation and Samsung Electronics are in a deal to bundle movies from the studio such as “How To Train Your Dragon” with Samsung’s “3D starter kits” for home setups.

‘Toy Story 3’ Crossing $1 Billion Mark

Premiums for 3D screenings are helping to propel a second Disney film, “Toy Story 3,” 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; “Alice in Wonderland,” which saw theatrical release in March, grossed $1.02 billion in theaters worldwide.

Disney’s Iger Muses On ‘Premium’ Rental Window For Films

Walt Disney Studios plans to be “aggressive” 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 “title by title” basis, Iger told analysts. In tandem with developing new release windows, he said, “we have to be judicious about how many films we release” as packaged home entertainment.

The executive declined to offer specific ideas about pricing or availability under new window schemes.

Warner’s Sanders Remains DEG President; Disney’s Chapek Steps Down

The Digital Entertainment Group (DEG) named its new board of directors for the coming fiscal year (Aug. 1 – July 31), while announcing that its chairman, Bob Chapek, was stepping down.

Chapek, who was the group’s president before being elected as its chairman in 2007, advanced at Disney late last year to become the studio’s distribution president. Lori MacPherson, EVP and GM of Walt Disney Studios Home Entertainment, joins the DEG as Disney’s board representative.

TWICE notes that four of the DEG’s 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.

Bombs Or Blip? Debate Over Box Office Trendlines

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 “turned-off consumers” with the likes of “Toy Story 3.” Movie City News’s David Poland vehemently responds: “Until 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.” In any event, Sony’s “Karate Kid” remake surpassed expectations this past weekend, grossing $56 million according to the studio (via The Wrap). The LA Times’ Joe Flint offers links to still more analysis.

‘Alice’ Tops DVD Sales In First Week

Sales of Walt Disney Studios’ “Alice In Wonderland” bested other new releases such as Universal’s “The Wolfman” and Fox’s “Burn Notice: Season Three” for the week ended June 6, according to Rentrak. “Alice” sold four times as many discs as “The Wolfman,” according to fellow sales tracker Nielsen VideoScan (via Home Media Magazine). The Nielsen service adds that Blu-ray comprised 37% of Disney’s total first-week “Alice” 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 Delivers Strong Quarter On ‘Alice’ Box Office

Disney’s film studio drove the company’s 55% year-over-year increase in net income during its fiscal second quarter. The 3D “Alice in Wonderland,” released in theaters March 5, surpassed $960 million in global ticket sales. Cost-cutting programs also added to the studio’s bottom line. By The New York Times

Disney Taps Ad Exec For Top Marketing Post

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’ 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

UK Theater Chain Settles With Disney Over ‘Alice’

The UK’s Vue cinema chain has agreed to show “Alice In Wonderland” 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

Disney: Early ‘Alice’ DVD Release An ‘Exception’

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

‘Alice In Wonderland’ Might Get Shorter Theatrical Window

Following news that UK exhibitors are being asked to accept a tightened theatrical window on Disney’s spring tentpole “Alice in Wonderland,” 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 “Alice.” It’s likely that Disney also will accelerate the availability of “Alice” 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

Disney Credits Home Entertainment For Studio’s Income Surge

A rise in home entertainment profits helped Walt Disney’s 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’s “Up” and romantic comedy “The Proposal” in the current quarter, compared to “WALL-E” and “The Chronicles of Narnia: Prince Caspian,” which had high participation costs, in 2009.

Disney’s Ross Scopes Beyond Hollywood For New Marketing Head

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

Executive Shake-Up Continues At Disney

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

Disney Eyes Q4 For 3D Films On Blu-ray

The Walt Disney Studios plans to start releasing 3D content for the home on Blu-ray beginning in the fourth quarter of 2010 with “Disney’s A Christmas Carol” as well as a 3D showcase disc. Via PR Newswire

Lightcap Succeeds Ross At Disney Channels

Carolina Lightcap has been named President of Disney Channels Worldwide, filling the opening created by Rich Ross’ 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

Disney Studio Drama Might Alter The Industry

In its review of Rich Ross’ 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’s Movie Unit Looks To Turn The Page

Disney chief Robert Iger calls the fourth-quarter financial results of Walt Disney Studios “extremely disappointing,” as the company takes a write-down on its “A Christmas Carol” 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 “The Princess and the Frog” (Dec. 11) and Tim Burton’s adaptation of “Alice in Wonderland” (March 5). By The New York Times

Disney Motion Pictures President Exits

Mark Zoradi, president of Walt Disney Co.’s 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

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