BURBANK, California (AP) – Disney might be lapping the hugely successful theatrical release of “Frozen”, but magic lives on in its media networks and parks and resorts.
Revenue from Disney parks and resorts rose 9 per cent to $3.9 billion in the last three months of 2014, as more people visited its California and Florida properties than in any quarter and spent more money there.
In an interview with CNBC, CEO Bob Iger said the entertainment company is seeing no discernible impact on attendance or bookings from the measles outbreak linked last month to Disney’s Southern California parks. Iger did say parents with children under the age of inoculation should be cautious about bringing them to any large public place like Disneyland, including mass transportation and movie theaters.
Strong results from the parks, Disney Channels and sales of “Frozen” merchandise drove earnings up 19 per cent. The Walt Disney Co’s profit and revenue topped expectations for the first quarter. Shares rose over 4 per cent in aftermarket trading.
Even a year after “Frozen” was released, sales of toys and other merchandise drove a 22 per cent jump in consumer products sales to $1.4 billion. Revenue from the company’s media networks was another strong point, jumping 11 per cent to $5.86 billion on strength from cable networks such as Disney Channels and ABC Family. Broadcasting revenue rose on sales of shows including “Criminal Minds” and “Scandal”. ESPN revenue fell, hurt by higher rates to broadcast NFL games and lower ratings for certain programs.
Movie studios, TV networks and cable and satellite providers alike are grappling with a changing media industry as more people watch TV and movies online and via streaming services like Netflix and Hulu. Dish last month launched a streaming-only option, Sling TV, that bundles Disney’s ESPN sports network with the Disney Channel and a handful of other cable networks.
Iger said in a call with analysts that he doesn’t have data yet on how many customers Dish has sold Sling TV to, and whether those customers are switching from cable or previously had no service. The company could consider selling a Disney-branded streaming-only option directly to customers, such as its ESPN channel, a Marvel “type product” or even Star Wars. But the time isn’t now, he said.
“If we see that market dynamics are changing in such a way that it’s better for us as a company to take the product out directly, and to not only improve our margins by taking out the middleman but create a closer relationship with the consumer that can be mined for other revenue-generating purposes, then we’ll do that,” Iger said. “We think if we were to do that now it would be precipitous of us.”
Theatrically, Disney’s “Big Hero 6” film couldn’t match the performance of “Frozen” in the year-ago period, which had also included the release of Marvel’s “Thor: The Dark World”.
But the company has some mega-movies on the horizon to help make up for that. Its live-action Cinderella movie debuts in March. And the widely anticipated “Star Wars: The Force Awakens” debuts Dec 18.
Iger pointed out that “Frozen” isn’t the only blockbuster franchise under Disney’s belt. The company has 11 franchises with more than $1 billion each in annual retail sales.
The Burbank, California-based company earned $2.24 billion, or $1.27 per share, topping the $1.08 per share average estimate of analysts surveyed by Zacks Investment Research.
Revenue rose 9 per cent to $13.39 billion in the period, also exceeding Street forecasts of $12.85 billion, according to Zacks.
Shares rose $3.65, or 3.9 per cent, to $97.75 during aftermarket trading after closing up 2.4 per cent at $94.10 before the report. The stock has been trading near its all-time high of $96.43.