Disney reports increased revenue, solid growth in all segments

Walt Disney Co.'s profit was up in its third quarter due to the strong box office performance by "Cars," strong sales of "The Chronicles of Narnia" DVD and revenue from ESPN, CEO Bob Iger said on Wednesday.

Revenue increased 12 percent, from $7.5 billion in 2005 to $8.6 billion this year, and earnings per share jumped 36 percent to 53 cents compared with 39 cents a year ago. Profits rose to $1.13 billion compared with $811 million in the year-ago third quarter.


"By investing in our pre-eminent core brands and adopting new platforms to enhance the entertainment experience, we intend to deliver our content to more people, more often, in more places and thereby also deliver long-term growth to our shareholders," Iger said in a statement.

The company's theme park business is expected to be flat for the rest of the year when compared with last year, which marked record attendance in its worldwide resorts that were celebrating the 50th anniversary opening of Disneyland in California.

In a conference call early Wednesday, Tom Staggs, Disney's chief financial officer, said fourth-quarter room reservations in the U.S. are running ahead by a high single-digit percentage rate compared with 2005, but that Disney expects its Florida and California theme park attendance to be flat.

Burbank, Calif.-based Walt Disney Co. (NYSE: DIS) operates Walt Disney Parks & Resorts, which includes the Magic Kingdom, Epcot, Animal Kingdom and Disney-MGM Studios theme parks in Orlando; owns ABC television network, 10 broadcast stations and more than 60 radio stations; and produces films through Walt Disney Studios.


Disney to offer two new infant brands

The Walt Disney Co. will offer Classic Disney and Walt Disney Signature Collections of apparel and infant gifts, according to Monday reports from the ENK International Children's Trade Show in New York City.

The high-end collections will feature scenes from Disney stories, characters and art, and will offer items like cashmere blankets, hooded robes and mittens, bibs and burp cloths, organic cotton tees, cardigans and casual seperates. The collections will be available at exclusive boutiques and high-end department stores like Bloomingdale's and Nordstrom this fall.


The first line of products to launch in the Classic Disney line is the "Bambi Collection," featuring gift items including baby blankets, soft block sets, boxed burp cloths, and full gift sets and bath sets including hooded towls and mittens, that will be available in early September. In Oct. the Bambi Collection will expand to include infant apparel.

In the Walt Disney Signature infant brand, classic elements are combined in a modern way with gift, seasonal and apparel items complemented with sketchbook and silhouette artwork. The line will debut in November.

Disney Consumer Products is a business segment of Burbank's Walt Disney Co. (NYSE: DIS).


Robert Zemeckis Bound for Disney

Oscar-winning director Robert Zemeckis is in negotiations, according to TMZ, to move his ImageMovers production company from DreamWorks Pictures to The Walt Disney Co., where his preferred performance capture format (created by Sony Pictures Imageworks) will expand the 3D slate for Pixar/Disney Animation studios under John Lasseter’s leadership. Disney would not confirm.

Zemeckis followed THE POLAR EXPRESS with MONSTER HOUSE (which he exec produced) and is currently directing BEOWULF for release on Nov. 16, 2007.


Disney to make Webcasts of shows permanent in Fall

The Walt Disney Co. (DIS.N: Quote, Profile, Research) is making ad-supported Webcasts of its ABC prime-time TV shows permanently available this fall, following a successful two-month test that drew a younger, more educated audience, a Disney official said on Friday.

Disney offered the prime-time ABC television series "Desperate Housewives," "Commander in Chief," "Lost" and "Alias" on its abc.com Web site in May and June to test whether consumers would watch ads online if the shows were free.

Albert Cheng, executive vice president of digital media for Disney-ABC Television Group, said a retooled version of the free broadband player will be launched in the Fall.

Cheng said Disney would announce later which shows will be available on the free site. Episodes likely will be available for a limited time, and shows may rotate on the site, Cheng said.


The shows were viewed 16 million times during the trial by consumers and 87 percent of viewers remembered the advertiser who sponsored the episode they had watched.

That compares with typical ad recall of about 40 percent for commercials viewed on television, industry sources said.

Disney said a survey showed that more than 50 percent gave positive ratings to the advertising experience, which required them to click through interactive ads to watch the shows.

The average age of the online audience for the ABC shows was 29, almost evenly split between men and women and more than half were college educated, the survey showed.

Most Web viewers tuned in from home and watched episodes on their desktop computers within 24 hours after they aired on television. The top reason given for viewing online was because users had missed the episode on TV, Disney said.

The ABC.com pilot program in one month outperformed the results Disney had seen during its nine-month partnership with Apple Computer Inc.'s (AAPL.O: Quote, Profile, Research) iTunes to offer episodes of its hit TV shows for download, without commercials, for $1.99 each.

Between last October and June, Disney sold more than 6 million downloads of shows on Apple's iTunes Web site.


Disney ticket gets pricier

Starting Sunday, the cost of a one-day ticket to any of Walt Disney World's four parks is going up to $67 — a 6.3 percent increase, the largest since 1991.

The hike is the second time in eight months the resort has bumped the cost of admission and represents an increase of almost 12 percent since December and 22 percent since early 2004.

Disney officials did not say what is prompting the $4 increase — which also affects the company's Magic Your Way flexible ticket plans — except to say the new price is in line with the needs of the travel industry.

The latest decision surprised a few industry observers and rattled some tourists Friday, but all said it would not deter people from visiting the parks.

Addison Williams, 68, of Atlanta said the prices were getting out of hand, especially for a family. The retiree, on vacation with nine family members and friends, said he was thankful he wasn't paying for everyone.

"I know it's a family theme park, but a family has to practically take out a loan to come here," Williams said as he paused during a shopping trip to International Drive.

Historically, Disney World and Orlando's two other theme-park resorts, Universal Orlando and SeaWorld Orlando, raised prices within weeks of one another and stayed relatively close. Universal went to $63 in January and SeaWorld to $61.95 in December.

There was no indication whether either expects to raise prices soon. SeaWorld spokeswoman Becca Bides said that park's prices are based on SeaWorld business, not on Disney's decision.

Disney last raised its basic ticket to $63 on Jan. 1, up from $59.75. The last time Disney increased prices by more than 6 percent was 1991, when basic admission went from $31 to $33.

"We believe we offer a great value and remain competitive in the market," Disney spokeswoman Jacquee Polak said.

Does price matter?

The new price shouldn't be much of a deterrent because Walt Disney World and Orlando, in general, are increasingly "must" vacations for many people at almost any price, said Ady Milman, a theme-park business professor at the Rosen College of Hospitality Management at the University of Central Florida.

Many tourists agreed.

"It's something you have to do," said Isabel Geurts, 46, of Glasgow, Scotland, who included Disney on her family's vacation to Orlando's attractions. "You want to go to Magic Kingdom just to say you've been."

But Disney's ticket prices are going up while gas prices are skyrocketing. That bothered retired sales manager Bob Standers, 68, of Lake Worth who visited Disney with his wife. "It's too expensive," he said.

Though some theme parks including Universal have struggled lately with attendance, Disney's crowd has been growing, up 5 percent last year and 3 percent in the first quarter of this year.

And the company will kick off a big, new promotional campaign called Year of a Million Dreams in October.

Last year, Disney joined other theme parks in moving away from selling most of its tickets one at a time. Under Magic Your Way, people can buy packages that discount the price of the tickets for multiple-day purchases.

The new increases cover most but not all of Disney's ticket prices. Magic Your Way tickets will see prices go up at all levels, about 3 percent to 6 percent. Disney's Park Hopper feature, which allows people to attend any of its parks, goes up $5 to $45. Yet water-park tickets remain the same, as do Florida resident three-day theme-park tickets.

In the next year or so, Disney is adding several smaller attractions, such as a new ride at Epcot called The Seas with Nemo & Friends and a new comedy show at Magic Kingdom called "The Laugh Floor Comedy Club," plus numerous events and shows tied to Year of a Million Dreams. But there are no announced plans for any major new attractions such as Expedition Everest, which opened in April.

"We would still come," said Melanie Hughes, 45, a teaching assistant from Coventry, England, in town with her family of four. "It doesn't make any difference, not when you're coming from England."

Safety becomes theme

What tourists want today is a safe, reliable vacation, and so more are turning to Disney regardless of the price, Milman said.

His research finds a trend showing travelers opting for places where they can be assured a consistent, quality experience, such as theme parks, over more authentic but less predictable experiences, such as vacations to European cities.

Milman also said the law of supply and demand applies.

"I think Disney is going to increase the price until people stop coming," he said.

Jerry Aldrich, president of Amusement Industry Consulting in Orlando, said Disney does careful analysis and knows what its customers are willing to pay.

"They really look at their surveys. Most places want to make sure they're in the ballpark for the value received versus the cost," Aldrich said. "There's a lot of planning and research before it's done."

He also said all of Orlando's theme parks are among the best anywhere, and none wants to be perceived as a lower-price, "discount" theme park, noting, "It'll be interesting to see what the other two do."


`Pirates’ Sequel Repeats as Weekend’s Top Film With $35 Million

“Pirates of the Caribbean: Dead Man's Chest'' was the top movie for the third weekend in a row, bringing in an estimated $35.0 million in ticket sales for Walt Disney Co.

“Pirates,'' starring Johnny Depp as Captain Jack Sparrow, has grossed $321.7 million since it opened July 7, film-tracker Exhibitor Relations Co. said today in a statement. The movie's $135.6 million debut set opening-day, two-day and weekend records.

The Disney film has helped boost ticket sales and attendance this year well ahead of last year, when sales fell 5.2 percent, the biggest drop in two decades. Sales this year are up 7 percent to $5.24 billion over the same period last year. Attendance has increased 3.8 percent, according to Exhibitor Relations.

“Pirates'' passed $300 million on its 16th day in theaters, passing the previous 17-day record of the 2005 film “Star Wars: Episode III – Revenge of the Sith,'' according to Exhibitor Relations.

“Pirates'' returns the cast of the original, including co- stars Orlando Bloom and Keira Knightley. In the sequel, characters played by Bloom and Knightley must interrupt their wedding plans to help save Sparrow from an eternity in servitude to supernatural sea captain Davy Jones.


Layoffs prove that Disney can be a truly cut-throat business

THE massacre at the Mouse House was plotted at the “happiest place in earth”, Disney’s venerable theme park in Orlando, Florida.

This is where Dick Cook, the normally cheery chairman of Walt Disney Studios, warned colleagues at the company’s executive retreat that the axe was about to fall on 650 jobs, possibly the biggest purge in Hollywood history.


After a series of cinematic disasters, including the story of an even bloodier massacre at The Alamo, it was time for Disney to get out of “adult” entertainment and back to its family-orientated roots, he proclaimed.

This week 20% of the worldwide workforce will learn they are on the “black list” Cook has been pondering since he became chairman in 2002.

Some already know their fate: last week Nina Jacobson, Cook’s deputy at Buena Vista, one of Disney’s half dozen film divisions, was told by mobile phone she had been sacked as she stood by the hospital bed where her girlfriend was giving birth to their third child.

The 40-year-old Disney producer was already having a bad week. She had been savaged in a tell-all book authorised by M Night Shyamalan, a director who has made a fortune scaring people. Shyamalan, responsible for The Sixth Sense, complained Jacobson had been unkind about his latest film, Lady In the Water, forcing him to take it to Warner Bros.

If critics are to be trusted and the film flops on opening this weekend, Cook may owe the departed executive a $140m (£76m) debt of gratitude.

Cook started at Disney in 1970 driving coal-powered locomotives at its Californian theme park and moved on to producing mildly risqué entertainments such as Pretty Woman and Good Morning Vietnam. But he now feels that its adult arm, Touchstone, has run out of steam.

His decision to “ramp up the family values” not only reflects Republican America but also two increasingly powerful outsiders: Steve Jobs, whose Pixar hits killed off traditional Disney animation before he sold his studio to Disney, and Philip Anschutz, a fundamentalist billionaire (and John Prescott’s cowboy pal) who brought the Narnia franchise to the studio.

There is another hidden hand in Hollywood: Once upon a time, perhaps in 1919 when Charlie Chaplin and Mary Pickford founded their own studio and called it United Artists, the town was run by creative people who were as much in love with movies as the fans. Now every studio is part of a larger global conglomerate whose fortunes are driven by Wall Street. (Not that it was that impressed by last week’s announcement of job cuts; Disney’s shares barely moved.)

This trend gathered momentum last year when Steven Spielberg, the spiritual heir to Chaplin, sold his Dream Works studio to Viacom’s Paramount for $1.6 billion, admitting he could not make a financial case for standing alone. Jobs are still disappearing at Paramount.

Metro-Goldwyn-Mayer, one of Hollywood’s oldest studios, which at its height used to release one film a week, was also snapped up last year, by Sir Howard Stringer at Sony. Since then 1,350 jobs have gone at MGM. In addition 400 jobs have been axed at Warner Bros in the continuing fall-out from the AOL merger.

There are those who rub their hands at the plight of Hollywood. Amir Malin, who has run several independent film companies, said “a business that should be highly profitable has become a byword for waste and extravagance”.

Others say it has always been thus.

Disney says it is now in effect dumping Touchstone, terminating future projects such the aptly-named Déjà Vu and Dead in The Water, to focus on an annual dozen “good” family films, inspired perhaps by the success of its Pirates of the Caribbean franchise.

The trouble is, say critics, nobody knows what a good film is — only that one can pay for all the flops, and reducing the numbers merely cuts the odds of hitting the jackpot.

This, and the fact that nobody truly understands Hollywood’s voodoo economics and book-keeping practices, may help explain Wall Street’s cool reception to Cook’s cost-cutting.

Anyway, nod the old Hollywood hands, it’s all cyclical and, in five years Disney will be paying over the odds to get back into the grown-ups’ club. Jacobson might even be running the company. That is show business.


Disney’s new film boss eyes family-friendly pix

As he begins his new job as president of production at Walt Disney Pictures, Oren Aviv must first define exactly what constitutes a Walt Disney picture — especially because the company wants to brand as many of its movies as possible with the venerable name.

"I'll start by telling you a few great examples," Aviv said Wednesday, a day after he was promoted from marketing chief as part of a sweeping revamp that will see 650 people lose their jobs. "They would be 'Pirates (of the Caribbean),' 'Chronicles of Narnia,' 'National Treasure,' 'The Pacifier' and 'Miracle.' If it's a great idea and it's done with quality and care, then it qualifies to be a Disney movie."

As Disney switches its focus to more family-oriented pictures, Aviv has been charged with releasing 10 live-action and animated films per year under the Disney name, along with two or three adult-skewing pictures under the Touchstone Pictures label.


Asked if he would put a film into production before first deciding if it fell under the Disney or Touchstone banner, Aviv said: "No. I'm very clear as to what defines a Disney movie, and the movies themselves will help shape those definitions. We'll take each project as it comes."

Ratings classifications alone will not delineate a Disney movie. Although the Disney label will not go on any R-rated movies, it can embrace everything from a G to a PG-13.

"We had a movie called 'The Rookie,' that was rated G, while 'Pirates' is PG-13," Aviv said. "To us, anything that's not an R has broad appeal, that you can take the whole family to — that to us has always defined a Disney movie, and that definitely hasn't changed. What we're looking for is to make movies based on great ideas that have appeal across the board."

Aviv's predecessor Nina Jacobson, who was ousted Tuesday, cultivated a reputation for nurturing eclectic directors, such as Wes Anderson and the Coen brothers, who might not fit Disney's current emphasis on tentpole family films. Recently, she'd been talking of getting Disney into the potentially lucrative horror genre, possibly releasing those movies under the revived Hollywood Pictures label. Aviv didn't rule out continuing to explore that genre, either — "if the idea is great and the script is great."

Aviv hasn't yet had a chance to begin a review of projects in development or to meet with Disney-based producers. But given that he's moving over from the marketing arm, where he'd been serving as president, he already knows most of the players on the lot. 

"I just got this job. As soon as I get my sea legs, I'm sure I will meet with everyone," he said. "I've been very fortunate that I have terrific and close relationships with people on the studio lot where I've been for the past 15 years. I'm also very familiar with the filmmaking talent throughout the town, and I look forward to working with and meeting with everyone."

On the less pleasant side, Aviv hasn't begun to consider how Disney's companywide cutback of 650 jobs could affect the production side. "Honestly, I can't answer because I just literally walked in the door," he said.

His new post does come with one guaranteed perk. "From now on," Aviv joked, "if a film doesn't work, I can blame marketing."


Disney to reorganize, run leaner

California's Walt Disney's Studios plans to reorganize its live-action film division, combining domestic and international marketing, a report said.

Marketing efforts are expected to be consolidated under Mark Zoradi, president of Buena Vista International, the overseas distribution division. Zordi has extensive experience marketing films abroad, which is a primary concern since U.S. movie attendance has flattened in recent years, the New York Times reported.

Merging the worldwide marketing team would allow for cost efficiencies and the elimination of redundant jobs.

Disney's profits have fallen the past two years, despite the successes of "Pirates of the Caribbean: Dead Man's Chest" and "The Chronicles of Narnia," and the company fell to No. 5 in box-office share in 2005 from No. 1 in 2003, the Times said.

The number of films released each year would most likely be reduced to about 12 or 13 films by 2008, down from the 14 to 20 films in the past, sources said. Those might include Disney and Pixar-branded animated films, Miramax Films, Touchstone and Walt Disney Pictures releases.


ESPN and Disney helping grant wishes to ailing children

With all due respect to Dick Vermeil, Adam Morrison and David Beckham – there should be no crying in sports.

After all, these are just games. And at the end of the day, none of it really matters.

At least compared with the 10 stories ESPN will air in its latest project, “My Wish.''

One of those stories is 11-year-old Steven Castro, who has been battling Crohn's disease for four years. He's been in and out of the hospital numerous times and requires constant medical supervision to control the life-threatening condition.

“There are good days and bad days,'' said his father, William.

Recently, the New York Yankees fan had a very good day, thanks to the Make-A-Wish Foundation.

Steven always wanted to meet his favorite player, Derek Jeter, and the charity made that dream come true when it flew him to New York to meet his hero.

There, he spent an hour-and-a-half on the field during batting practice with Jeter, Jason Giambi, Jorge Posada and the rest of the Yankees' players before his family was treated to a Yankees-Florida Marlins game.

“Walking on the field and meeting the players was a great experience,'' the Lake Worth, Fla., youth said. “I was so happy I was speechless.

“Derek was exactly like I expected he would be. He was nice to everyone. He wasn't mean to my sisters, or anything.''

In addition to Steven's story, ESPN is scheduled to air nine other stories of inspiration. The children, all with life-threatening medical conditions, had their sports wishes come true for a day. ESPN teamed with Disney and the Make-A-Wish Foundation on the stories, which will be told by Chris Connelly.

Other segments will include the story of Johnny Mazza, an 11-year-old Largo, Fla., boy who has lived through a bilateral lung transplant. He got to spend time with Jeff Gordon inside the Hendrick Motorsports compound in Charlotte, N.C., then watch the Coca-Cola 600.

Then there's Charlie Pena, a 12-year-old boy from New York City with sickle cell anemia who helped run the Philadelphia Eagles' offense for a day of spring practice.

“Viewers will run the gamut of emotions because you're really happy for the kids, but at the same time you feel what they have to go through every day of their lives," said senior coordinating producer Stephanie Druley.

Like always, there will be some who will criticize ESPN for teaming up with its parent company and the Make-A-Wish Foundation, and for producing what some might call schmaltzy journalism.

After all, criticizing ESPN has become about as en vogue as picking on Britney Spears.

But I'd much rather see the net spending its resources on stuff like this than on another bad movie or television show featuring a bunch of newspaper talking-heads.

And, yes, it's OK to cry for these kids.


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