Walt Disney Cashes In from iTunes: 5 Million Copies of Cars Sold Online
The Walt Disney- Apple partnership seems fruitful for both giants: since the launch of their joint business in September, Walt Disney saw its movies downloaded in stellar numbers.
No wonder WD signed an exclusive contract with Apple, since one of Disney’s board members is Steve Jobs himself (by contrast, Amazon's movie service began with distribution deals with seven studios — but not Disney).
At the beginning of the deal, Jobs said more than 75 films will be available on iTunes from Walt Disney Pictures, Pixar, Touchstone Pictures and Miramax. New releases will be priced at $12.99, when pre-ordered and during the first week of sale, or $14.99 afterward. Library titles will be sold for $9.99 each.
Two months later, Walt Disney pictures are cashing in big time: more than 500,000 movie downloads during this period have brought the company more than $4 million, according to Apple Insider.
The Apple-Walt Disney business boosted the latter’s profits to more than $782 million, exceeding analyst expectations.
Walt Disney Co. also said it sold over 5 million DVD copies of Pixar's "Cars" in the first two days it was available for purchase at stores, putting the film on track to be the industry’s top seller in the U.S. during the 2006 calendar year. Earlier this week, it added "Cars" to iTunes along with "Pirates of the Caribbean: Dead Man's Chest," both of which are available as downloads for $12.99.
"We expect to see a holiday boost for Cars merchandise, which has been one of our biggest lines of the year, with retail sales around $1 billion," Disney chief executive Robert Iger told analysts during the company's fiscal fourth quarter conference call on Thursday.
Disney predicts that online movie sales will generate $50 million in the first year of the scheme. It looks like Apple is selling nearly 9,000 movies every day through its US-only service.
The company also confirmed is has received enquiries from the US financial regulator, the Securities and Exchange Commission, related to stock options grants at newly acquired Pixar.
Over the last year, approximately 85 million of the entertainment corp's TV shows, movies and short films have been played or downloaded on iTunes, disneychannel.com, and abc.com. In addition, Iger announced that approximately 12 million ABC TV programs have been purchased since October, 2005 via iTunes.
"We have done extremely well on the iTunes platform," he said. "We have launched on two other movie platforms and given some of the announcements that have been made this past week, we believe we will have opportunities to sell movies and television shows on many other new platforms."
Despite beating Wall Street's estimates and doubling profits from the year-ago quarter, shares of Disney fell $1.20 or more than 3.5 percent on Friday amid growth concerns over the 2007 calendar year.
Within the first week of the partnership, which was announced during Apple's "It's Showtime" event on September 12, Disney announced that it had sold 125,000 movies and cleared $1 million in revenue. Since then, the numbers have continued to grow over the last eight weeks, averaging roughly 62,500 movies sold per week since the partnership's inception.