Film Production
Q3-2015: Disney revenue up 5.1%, income up 10.6%
BENGALURU: The Walt Disney Company Inc reported 5.1 per cent revenue increase in Q3-2015 (quarter ended 27 June, 2015) to $13,101 million as compared to the $12,466 million in Q3-2014 (quarter ended 28 June, 2014). Net income during the current quarter improved 10.6 per cent to $2483 million from $2245 million reported for the corresponding year ago quarter.
Of the five segments that add to Disney’s numbers, four – Media Networks, Parks & Resorts, Studio Entertainment and Consumer Products showed improvement in revenue and income, while its Interactive segments showed decline in revenues and income in the current quarter as compared to the corresponding year ago quarter.
“We’re very pleased with our performance in the third quarter, with record net income and diluted earnings per share of $1.45, up 13 per cent from the prior year. The strong results across our many diverse lines of business demonstrate the power of our unparalleled brands, franchises and creative content,” said Disney chairman and chief executive officer Robert A Iger.
Segment Results
Media Networks
Media Networks revenues for the current quarter improved five per cent to $5768 million from $5511 million reported for Q3-2014. Operating Income from this segment increased four percent to $2378 million in Q3-2015 from $2296 million in Q3-2014.
Two sub-segments – Cable Networks, and Broadcasting contribute to this segment.
Cable Networks
Cable Networks reported a five per cent growth in revenue to $4140 million in Q3-2015 from $3942 million in Q3-2014. The sub-segment reported a seven per cent increase in Operating Income to $2078 million in Q3-2015 as compared to the $1942 million in Q3-2014. The company says the increases at the domestic Disney Channels and ABC Family were due to higher program sales and increased affiliate revenue, driven by contractual rate increases. Program sales growth reflected increased subscription video on demand (SVOD) distribution revenues in the current quarter.
Operating results at ESPN were driven by growth in affiliate revenue, partially offset by lower advertising revenue. The increase in affiliate revenues was due to contractual rate increases and an increase in subscribers. The increase in subscribers was due to the new SEC Network launched in August 2014, partially offset by a decline in subscribers at certain of our networks.
Lower advertising revenues reflected lower ratings and rates, partially offset by more units sold driven by NBA playoff games. Lower rates reflected the benefit of World Cup soccer in the prior-year quarter. ESPN programming and production costs were relatively flat in the quarter as the addition of the SEC Network and higher rights costs for NBA programming were essentially offset by the absence of rights costs for NASCAR and World Cup soccer.
Broadcasting
Broadcasting reported four per cent hike in revenue in the current quarter to $1628 million from $1569 million, but reported a 15 per cent decline in operating income to $300 million from $354 million in the corresponding quarter of last year due driven by higher programming costs, lower advertising revenue and higher labour related costs, partially offset by growth in affiliate fees and higher program sales revenue from SVOD distribution. Higher programming costs were driven by increases in the average cost of primetime programming and pilot costs in the current quarter.
Lower advertising revenues reflected decreased news and daytime ratings, partially offset by higher rates. Affiliate fee growth was due to new contractual provisions and contractual rate increases.
Parks and Resorts
Parks and Resorts reported four per cent growth in revenue to $4131 million from $3980 million in the corresponding year ago quarter and a nine per cent increase in Q3-2015 operating income to $922 million from $848 million in Q3-2014. Operating income growth for the quarter was due to an increase at Disney’s domestic operations, partially offset by a decrease at its international operations.
Studio Entertainment
Studio Entertainment reported 13 per cent increase in revenue to $2040 million in Q3-2015 as compared to the $1807 million in Q3-2014, and segment operating income increased 15 per cent to $472 million from $411 million in Q3-2014.
Disney says that higher operating income was due to an increase in theatrical distribution, growth at international television distribution and a higher revenue share with the Consumer Products segment. These increases were partially offset by a decrease in home entertainment and higher film cost impairments.
The increase in theatrical distribution reflected the strong performance of Marvel’s Avengers: Age of Ultron in the current quarter compared to Marvel’s Captain America: The Winter Soldierin the prior-year quarter. Theatrical results in the current quarter also benefited from the continuing performance of Cinderella, which was released in the second quarter of the current year. These increases were partially offset by the strong international performance of Frozen in the prior-year quarter and the results of Tomorrowland in the current quarter. The growth in international television distribution included sales of Star Wars titles, while the increased Consumer Products revenue share was primarily due to the performance of Frozenmerchandise. The decrease at home entertainment reflected lower unit sales due to the performance of Frozen in the prior-year quarter compared to Big Hero 6 in the current quarter.
Consumer Products
Consumer Products Q3-2015 revenue increased six per cent to $952 million from $902 million in Q3-2014 and operating income improved 27 per cent to $348 million from $273 million in Q3-2014.
Higher operating income was due to an increase in merchandise licensing revenues and lower third-party royalty expense. Merchandise Licensing revenue growth reflected the performance of merchandise based on Frozen, The Avengers and Star Wars, partially offset by lower revenues from Spider-Man merchandise.
Interactive
Revenue from this segment fell 22 per cent to $208 million in Q3-2015 from $266 million in Q2-2014, but segment operating income was nil as compared to the $29 million in Q3-2014. The segment just managed to breakeven.
Lower operating income was primarily due to lower results from Disney Infinity and decreased sales of console game catalogue titles, partially offset by the continued success of Tsum Tsum. The decrease from Disney Infinity was due to decreased unit sales and lower average net effective pricing.
Film Production
Arka Mediaworks onboards 88 Pictures as animation studio partner on ‘The Eternal War – Part 1’
Arka Mediaworks announces that 88 Pictures, the acclaimed animation and visual storytelling studio known for its cutting-edge CGI and cinematic artistry, is on board as the animation partner for the highly anticipated Baahubali: The Eternal War, a groundbreaking two-part 3D animated feature film set in the globally beloved Baahubali universe.
Baahubali: The Eternal War represents a bold new chapter in the Baahubali saga envisioned for national and international audiences and crafted with the ambition of delivering one of India’s most ambitious and globally benchmarked animation projects to date.
88 Pictures will execute the animation production, bringing to life the film’s richly detailed worlds, epic battle sequences, and larger-than-life characters with its signature blend of artistic vision, performance-driven animation, and advanced production pipelines. Working closely with the film’s creative leadership and technical partners, the studio aims to set new benchmarks in animation quality, cinematic storytelling, and global scalability.
This animated epic follows the successful re-release of Baahubali: The Epic (the combined theatrical version of the original live-action films) on 31 October 2025 across India and the USA. During the film’s interval, legendary creator and director S.S. Rajamouli (Baahubali 1 & 2, RRR) stunned audiences with a surprise teaser for The Eternal War – Part 1. The video immediately went viral, garnering widespread national and international acclaim across LinkedIn, Instagram, and YouTube for its ambitious visual style and scale.
Produced by Arka Mediaworks and led by co-founder and CEO Shobu Yarlagadda – producer of the iconic Baahubali duology, The Eternal War brings together fantastic storytelling and cutting-edge animation.. The film is directed and written by acclaimed animation filmmaker Ishan Shukla (Schirkoa: In Lies We Trust, Star Wars: Visions – “The Bandits of Golak”) and screenplay by Scott Mosier (The Grinch). Mihira Visual Labs, the studio co-founded by Yarlagadda anchors the film’s animation, visual development, and execution.
The partnership with 88 Pictures brings significant pedigree to the project; the studio is well-regarded for its work on high-profile international titles including DreamWorks’ series Trollhunters, the HBO Max original series Gremlins: Secrets of the Mogwai, Disney’s animated short An Almost Christmas Story to name a few.
Yarlagadda shared, “We are happy to onboard 88 Pictures as the animation studio partner for our prestigious and most expensive animated film from India. We believe that their expertise and capabilities will allow us to produce a first-of-its-kind, world-class animated feature film from India.”
88 Pictures founder & CEO Milind D. Shinde said, “Baahubali changed the way cinema is perceived and became a defining milestone that turned the tide for Indian live-action filmmaking. Expanding the franchise into an entirely new universe—at a never-seen, never-done scale—through an animated feature created in India for a global audience is set to redefine how the world views Indian animation. We are truly thrilled to be part of this landmark project and to bring it to life under the visionary direction of Ishan Shukla, guided by the experience and leadership of acclaimed producer Shobu Yarlagadda.”
Shukla expressed, “Eternal War requires a level of visual and emotional precision that can only come from teams who truly understand both craft and intent. Working with 88 Pictures, alongside Mihira Visual Labs, has been a deeply collaborative experience. This association brings together technical excellence and creative sensitivity, enabling us to translate an ambitious vision into a compelling cinematic reality.”
Baahubali: The Eternal War – Part 1 is scheduled for release in 2027
