Iger: Disney to trim live-action movies

UPDATE: DreamWorks to boost DVD premieres production

By Jennifer Netherby -- Video Business, 9/21/2005

SEPT. 21 | Incoming Walt Disney Co. CEO Bob Iger said Wednesday that his studio has cut its live-action movie slate going forward, partly to acknowledge the changing DVD market.

Iger was speaking at Goldman Sachs Communicopia Conference in New York along with other entertainment executives. The conference comes a week after Merrill Lynch held a similar conference in Pasadena, Calif., with the same companies.

Iger said the new Miramax without Bob Weinstein and Harvey Weinstein will release just four to six low-budget, independent films each year, which will greatly reduce the studio’s overall live-action slate.

Disney also is focusing more on creating Disney-branded live-action films, such as Pirates of the Caribbean, which have greater value in the market, he said.

Iger said the studio believes that high-definition DVD will boost growth in home video. He blamed the recent slowing of the video industry on a glut of releases.

“It’s actually a business that’s showing some growth, but it’s showing more challenge for the motion picture side of the business,” Iger said.

TV is still a high point, and Iger said Disney expects to sell more than 1 million units of ABC TV series Lost on DVD.

At the conference, Time Warner CEO Richard Parsons said his studio also is experiencing strong growth on TV DVD sales but has seen a growth slowdown on new releases and library film releases.

On the flip side, Viacom and News Corp. are both still projecting continued strong growth in their DVD businesses, despite industry slowdowns.

Viacom co-president and co-chief operating officer Tom Freston said Paramount Home Entertainment, which ramped up its TV and movie release slate this year to more than 200 titles, will put out even more DVD releases next year. Freston said the studio also sees more opportunities to re-release films both in new special editions and in versions with lower price points.

“We’re looking at several years of good, solid growth out of the DVD business,” he said.

News Corp. chairman and CEO Rupert Murdoch attributed 20th Century Fox Home Entertainment’s DVD success not just to the studio’s successful film slate, but also to controlled inventory and “not getting overexcited on shipping.”

Murdoch didn’t mention by name rivals DreamWorks Home Entertainment and Disney, both of which have reported higher-than-expected returns on releases this year. DreamWorks warned investors in the second quarter on Shrek 2 and Shark Tale, which hurt its earnings. Disney/Pixar likewise reported higher returns on The Incredibles.

Speaking on Thursday, DreamWorks Animation CEO Jeffrey Katzenberg said the studio is looking at building its DVD premiere business over the long-term, including finding somewhere overseas to set up a production base for that business.

“The direct-to-video business certainly is a place where we see lots of opportunity, particularly with these franchises,” he said, referring to upcoming planned DVD premiere spinoffs from Madagascar and Wallace and Gromit. “I think it is a place where you’ll see a lot of activity for us.”

In terms of DVD sales, Katzenberg said he believes 2005 will likely be the year that catalog sales peak.