Film blues

Turbo

DreamWorks Animation SKG Inc’s fourth-quarter revenue fell a steeper-than-expected 23 per cent due to the continued poor performance of Turbo and the lack of a major movie released in the United States in the period.
Shares of the Hollywood studio fell 7.5 per cent to $32.55 in extended trading after the company also said it took a charge related to the poor performance of Turbo. “Turbo faced one of the most competitive feature film environments we have seen,” Chief Executive Jeffrey Katzenberg said on a conference call with analysts. “While it performed fairly well during the fourth quarter at the international box office and its home video release, it still fell short of our expectations.” Turbo, an animated movie about a garden snail that races in NASCAR, had a slow start in the U.S. theatres after its release in July pit it against rival studios’ films such as Monsters University and Despicable Me 2.
DreamWorks said recently that it expects its full-year 2014 results to be helped by the release of Mr. Peabody & Sherman in March in the United States and How to Train Your Dragon 2 in June.
The company has released Mr. Peabody & Sherman in the U.K., France and Argentina to take advantage of the school holidays.
But, the studio does not expect a significant contribution to revenue in the first-quarter from the movie, which is about an animated comedy about a talking genius dog and the boy he adopts.

Turbo charge
Turbo had a slow start at the U.S. theatres, prompting several analysts to forecast a writedown on the film in the second or the third quarter. DreamWorks, who avoided talking about it initially, said recently that the movie’s poor performance during the last two months of the fourth quarter ended on December 31, forced it to take an impairment charge of $13.5 million, or 12 cents per share.
The company also took an impairment charge of about 6 cents per share related to a short movie, Rocky and Bullwinkle.
DreamWorks reported net income of $17.3 million, or 20 cents per share in the fourth quarter, compared with a loss of $82.7 million, or 98 cents per share, a year earlier. Revenue fell 22.8 percent to $204.3 million. Excluding the two charges and a gain the company earned 33 cents a share.
Analysts on average had expected earnings of 32 cents per share, on revenue of $223.2 million, according to Thomson Reuters.
In December, Netflix Inc began streaming Turbo: F.A.S.T — DreamWorks’ first animated series for the video streaming service provider. “We do not expect to deliver additional series beyond Turbo: F.A.S.T to Netflix until the fourth Quarter of 2014,” Chief Finacial Officer Lew Coleman said on the call. Coleman said the company would incur marketing costs related to the series, which follows the snail’s story after its triumphant return from the Indianapolis 500 race.
DreamWorks spent about $135 million to make Turbo. The movie has so far grossed about $282.6 million in receipts, according to Box Office Mojo, a website that tracks theater ticket sales.DreamWorks shares closed at $35.20 on the Nasdaq on last Tuesday.

 

Disney launches cloud movie service for mobile, online viewing

Walt Disney Co has launched Disney Movies Anywhere, a service for consumers to buy and watch Disney, Pixar and Marvel films online and store them in the cloud, in the latest bid by a Hollywood studio to encourage digital movie purchases.
Disney, like other Hollywood studios, is trying to boost digital sales after consumers moved away in recent years from buying DVDs, cutting a lucrative source of revenue.
The media company said in a statement it launched the new service a day that coincided with the digital release of Disney’s blockbuster animated movie Frozen.
The service allows consumers to buy digital movies from a library of more than 400 titles through Apple Inc’s iTunes store and the Disney Movies Anywhere website and app.
The purchased movies can be watched on a laptop or desktop computer, or on Apple’s iPhone, iPad and iPod Touch, Disney said. Consumers can also view the films through the Apple TV box.
The service is built on Disney’s proprietary digital rights locker KeyChest, rather than UltraViolet, a cloud storage service used by other major Hollywood studios.
“The beauty of this technology is that it enables us to work with iTunes and future provider partners to ensure movie lovers have streamlined access to all of their favourite Disney titles no matter what device they are on,” said Jamie Voris, Disney Studios’ chief technology officer. Disney said it is in talks with other retailers about offering the service outside of iTunes.