Strong advertising revenue growth continues for the likes of Walt Disney’s cable networks, as well as its broadcasting network for its fiscal second quarter. And more is coming.
“We are anticipating a strong upfront,” says Bob Iger, president and chief executive officer of Walt Disney. Current scatter activity at ABC network is showing cost-per-thousand viewer prices [CPMs] up 20% over upfront.
In its second quarter ending March 31, Cable network revenues grew 12% to $3.2 billion, with broadcasting revenue climbing 2%. ABC network advertising sales were up 6%, with ABC station advertising sales down 8%.
ABC stations had lower programming costs during the period due to the syndicated “Oprah Winfrey Show” leaving the airwaves last September. The company said it also saved money due to lower daytime and news production costs at the network. Operating income was up 37% to $229 million.
ESPN contributed heavily to the growth at its cable unit, with operating income 11% higher to $1.5 billion. ESPN also witnessed big advertising revenue growth from higher rates, which included a shift in the timing of Rose Bowl, Fiesta Bowl and NBA games for its fiscal second quarter. Disney’s Iger, president/CEO of Walt Disney, says 40 million subscribers can now access its WatchESPN app on mobile devices.
For its studios' entertainment business, quarterly revenues sank a big 12% to $1.2 billion, with the unit swinging to an operating loss of $84 million for the period ending March 31, 2012, from a $77 million operating income in the second quarter of 2011. A big failure with “John Carter” caused a writedown -- as well as the recent resignation of its studio chief Rich Ross.
Yet Disney witnessed record-breaking results for the just-opened “The Avengers” film -- now at $700 million-plus worldwide. With little surprise, Iger confirmed there would be a sequel for “The Avengers.”
Disney’s Parks and Resorts revenues improved 10% to $2.9 billion, with operating income gaining 53% to $222 million. At Tokyo Disney Resort and Hong Kong Disneyland Resort, business improved, but declines were seen at Disneyland Paris.
Consumer products gained 8% to $679 million with operating income up 4% to $148 million. Merchandise licensing picked up from Minnie, Mickey, “The Avengers” and Princess merchandise.
Interactive Media revenues gained 13% to $179 million, with operating losses cut to $70 million from $115 million due to better business from social and console games.
Overall, Disney revenue was up 6% to $9.6 billion, with operating income 10% higher at $1.9 billion.