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Results of Disney’s Star Wars and Zootopia Successes

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Studio Entertainment segment in fiscal 2Q16

The Walt Disney Company’s (DIS) Studio Entertainment segment had total revenues of $2.1 billion in fiscal 2Q16. That’s an increase of 22% over fiscal 2Q15.

As you can see in the graph below, theatrical distribution and television or SVOD (subscription video on demand) distribution were the biggest contributors to this segment. Their revenues were $732 million and $934 million, respectively. Theatrical distribution revenues rose a sharp 69% year-over-year, driven largely by the success of Disney movies, including Star Wars: The Force Awakens and Zootopia. Star Wars and Zootopia have earned $2.1 billion and $960 million, respectively, at the global box office in its fiscal year-to-date performance.

In contrast, 21st Century Fox (FOXA) saw a year-over-year decline of $68 million in revenues for its Filmed Entertainment segment in the last quarter. The declining revenues were impacted about 3% due to adverse dollar (UUP) movements and lower home entertainment and television production revenues.

Comcast’s (CMCSA) Filmed Entertainment segment saw a 4.3% year-over-year decline in revenues at $1.3 billion in fiscal 1Q16. This was driven by declining revenues from the company’s theatrical distribution and home entertainment businesses.

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Enduring value of Disney brands

The Walt Disney Company (DIS) stated at the company’s fiscal 2Q16 earnings call that its 13 movies from Marvel Universe have generated $10 billion at the global box office in year-to-date performances. The company is also expecting a successful run at the box office for its forthcoming movies Alice Through the Looking Glass and Pixar’s Finding Dory.

Disney has released 27 movies to date under the Pixar, Marvel, Disney Animation, and Lucasfilm brands. All of these movies have done an average business of around $770 million each at the global box office. This shows the enduring value of these brands. Disney stated on the company’s fiscal 2Q16 earnings call that its recent release of The Jungle Book has also proved to be a success, earning $783 million to date at the global box office. The movie was a resounding success in India (EPI) and China (FXI).

Comcast makes up 0.85% of the SPDR S&P 500 ETF (SPY). SPY also holds 0.21% of Netflix (NFLX) and has an exposure of 3.4% to the computers sector.

In the next part, we’ll see if Disney’s expansion of Theme Parks & Resorts is helping.

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