BENGALURU: MGM Holdings Inc (MGM) reported 4 per cent drop in revenue to US$ 233.47 million in Q3-2014 from US$ 242.90 million in Q3-2013. Income for the period rose 72 per cent to US$ 28.59 million in Q3-2014 from US$ 16.59 million in Q3-2013.
Here below are edited excerpts of MGM’s financial report for the quarter ended 30 September 2014.
MGM says that as expected, revenue was lower due to the significant revenue it generated from its franchise film, Skyfall, which began its worldwide pay television and SVOD distribution in the prior year’s third quarter. This was largely offset by revenue performance in several areas in the current year’s third quarter, including higher revenue from MGM’s home entertainment distribution business, led by the worldwide distribution of RoboCop, plus higher revenue from its successful new television content and incremental revenue from previously released film content.
Theatrical Revenue
MGM’s Worldwide theatrical revenue was US$ 6.5 million for the three months ended 30 September 2014, an increase of US$ 3.9 million as compared to US$ 2.6 million for the three months ended 30 September 2013.
Theatrical revenue for the current year’s third quarter primarily included international revenue for Hercules from certain territories where MGM controls the distribution rights. However, it did not recognise a substantial portion of the worldwide theatrical revenue for If I Stay, Hercules and 22 Jump Street, which are accounted for on a net basis after deduction of theatrical advertising and other related distribution costs. Net revenue from co-produced films is classified as other revenue from film and television content (see below). In comparison, theatrical revenue for the prior year’s third quarter primarily included the tail-end of the international theatrical distribution of The Hobbit: An Unexpected Journey.
Home Entertainment
Worldwide home entertainment revenue was US$ 41.7 million for the three months ended 30 September 2014, an increase of US$ 7.3 million as compared to US$ 34.4 million for the three months ended 30 September 2013. Home entertainment revenue increased in the current year’s third quarter due to the worldwide home entertainment distribution of RoboCop, which commenced in June 2014, plus the continued international distribution of The Hobbit: The Desolation of Smaug. In comparison, MGM did not have a significant home entertainment release in the prior year’s third quarter, which primarily included revenue from the continued international home entertainment distribution The Hobbit: An Unexpected Journey and Skyfall worldwide. The company says that it is also keenly focused on strategies to maximise home entertainment revenue for its library, including targeted promotions such as the MGM 90th anniversary promotion in the current year. In addition, it has a steady pipeline of new film and television content that continues to generate home entertainment revenue, including recently released titles such as The Hobbit: An Unexpected Journey internationally, Carrie, Skyfall and its successful television series, Teen Wolf and Vikings, which have performed well in both physical home entertainment and EST.
Television Licensing
Worldwide television licensing revenue was US$ 150.6 million for the three months ended 30 September 2014, a decrease of US$ 15.2 million as compared to US$ 165.8 million for the three months ended 30 September 2013. Television licensing revenue was lower in the current year’s third quarter primarily due to significant revenue from Skyfall in the prior year’s third quarter, including its domestic pay television premiere on Epix and its initial pay television and SVOD availabilities in several territories internationally. The prior year’s third quarter also included the initial international television licensing of The Hobbit: An Unexpected Journey. Partially offsetting this decline was higher revenue from new television content in the current year’s third quarter, which primarily included MGM’s continued international television licensing of three successful current television series, Teen Wolf, Vikings and Fargo. In addition, MGM says that it generated revenue from several new film releases, including the initial international pay television and SVOD availabilities of The Hobbit: The Desolation of Smaug, the domestic pay television premiere of Carrie on Epix, and VOD revenue for RoboCop.
Other Revenue
Other revenue from film and television content was US$ 13.6 million for the three months ended 30 September 2014, a decrease of US$ 10.7 million as compared to US$ 24.3 million for the three months ended 30 September 2013. Other revenue primarily included net revenue for MGM’s share of the distribution proceeds earned by its co-production partners for co-produced films for which its partners control the distribution rights in various distribution windows, including theatrical, home entertainment, television licensing and ancillary businesses. Net revenue from co-produced films is impacted by the timing of when a film’s cumulative aggregate revenues exceed its cumulative aggregate distribution fees and expenses. The decrease in the current year’s third quarter primarily reflected a higher number of titles moving through first-cycle distribution windows for which MGM record’s revenue on a gross basis as opposed to a net basis.
Ancillary Businesses
Total revenue from MGM ancillary businesses, which include MGM branded television channel operations, interactive gaming, consumer products, music performance and other revenue, was US$ 21.1 million for the three months ended 30 September 2014, an increase of US$ 5.3 million as compared to US$ 15.8 million for the three months ended 30 September 2013. This increase was primarily due to the timing of revenue from MGM branded television channels.
