IP Democracy: Disney Poised to Sell 5 Mil.+ Films via iTunes in 2007


ipvideo2.jpgDisney’s Bob Iger told the Financial Times’ this week that the studio has sold 1.3 million movies via iTunes since the company became the first Hollywood player to make its films available for download on Apple’s store back in September 2006. Iger also said that Disney has sold 20 million TV shows via iTunes since late-2005 when the studio also became the pioneer in selling TV content via iTunes.

These latest numbers from Disney jive pretty closely with projections I developed back in October (always gratifying when my forecasts bear out, although my projections are slightly more conservative than the reality). If my forecasts continue to bear out, this level of sales means that Disney is on track to sell at least 5.4 million films via iTunes this year, and over 43 millon downloads of TV shows, generating incremental revenue of nearly $150 million.

While $150 million is a drop in the bucket compared to Disney’s overall revenues, reflecting only 1% of the company’s total $34.3 billion fiscal 2006 total revenues, for example, it’s still gravy that Disney might not otherwise have had. One question is whether iTunes is cannibalizing Disney’s DVD sales.

Iger thinks not. “Pirates of the Carribean” and “Cars” were two of the most downloaded films via Tunes and yet the sale of the DVDs via retail beat expectations. He’s probably right. At this stage, consumers want both kinds of distribution. But over time, doesn’t it make sense that DVD sales will drop in the face of more efficient web-based movie distribution?

  Disney TV Shows Sold via iTunes Disney Movies Sold via iTunes Total 
# of TV Shows Sold (mil.) Avg. Revenue Per Sale Total Revenue for Quarter (mil.) # of Movies Sold (mil.) Avg. Revenue Per Sale Total Revenue for Quarter (mil.) Total Revenue, TV & Movies (mil.)
4Q05 1.00  $       1.99  $      1.99          -              -    $          -    $        1.99
1Q06           2.50  $       1.99  $      4.98          -              -    $          -    $        4.98
2Q06           4.00  $       1.99  $      7.96          -              -    $          -    $        7.96
3Q06           4.50  $       1.99  $      8.96       0.13  $   11.00  $      1.38  $      10.33
4Q06           5.99  $       1.99  $    11.91       0.75  $   11.11  $      8.33  $      20.24
1Q07           7.48  $       1.99  $    14.89       0.94  $   11.22  $    10.52  $      25.41
2Q07           9.35  $       1.99  $    18.61       1.17  $   11.33  $    13.28  $      31.89
3Q07         11.69  $       1.99  $    23.26       1.46  $   11.45  $    16.77  $      40.03
4Q07         14.61  $       1.99  $    29.08       1.83  $   11.56  $    21.17  $      50.25
1Q08         16.80  $       1.99  $    33.44       2.29  $   11.68  $    26.73  $      60.17
2Q08         19.32  $       1.99  $    38.46       2.86  $   11.79  $    33.74  $      72.20
3Q03         22.22  $       1.99  $    44.22       3.58  $   11.91  $    42.60  $      86.82
4Q08         25.56  $       1.99  $    50.86       4.47  $   12.03  $    53.78  $    104.64
Source:  Emerging Media Dynamics, Inc. analysis.  © 2007.
Note:  The quarters reflect calendar quarters, not Disney’s fiscal quarters.



Posted by Cynthia Brumfield on February 2, 2007 7:46 AM to IP Democracy