Disney’s Consumer Products and Interactive segment
The Walt Disney Company’s (DIS) Consumer Products and Interactive segment had revenue of $1.1 billion in fiscal 3Q16, a rise of 1% year-over-year (or YoY). The segment had an operating income of $324 million in fiscal 3Q16, a fall of 7% over fiscal 3Q15. This fall was the result of falls in its merchandise licensing and retail businesses.
The factors that resulted in a fall in revenue for the company’s merchandise licensing business reflected a negative impact of currency fluctuations and a difficult comparison to higher merchandise licensing revenue for Frozen in fiscal 3Q15.
Disney’s Consumer Products and Interactive segment saw improvement in its games business in fiscal 3Q16, driven by a fall in costs as the company exited its Infinity games business.
As the above chart indicates, licensing, publishing, and games made up 68% of the company’s Consumer Products and Interactive segment, with revenue of $776 million in fiscal 3Q16.
Disney’s acquisitions and Consumer Products business
Disney’s Consumer Products business has also benefited from the acquisitions of Marvel, Lucasfilm, and Pixar. Disney has always maintained that a core part of its business strategy is effectively monetizing its intellectual property. Disney’s acquisitions have further added to its intellectual property portfolio.
At the MoffettNathanson Media & Communications Summit early this year, the company stated that monetizing the intellectual property created through its Marvel and Lucasfilm acquisitions contributed to the growth of its Consumer Products business.