Cinemas reopen and studios have pushed their production work to the next level in 2021 after the pandemic shut down theaters and crews globally for a long time in 2020. Later that year, however, the omicron variant put a wrench in the plans.
With Hollywood also spending more on film production and marketing, entertainment conglomerates’ studio profits in general have not been as pronounced as revenue growth; in two cases, the final profit even drops, like The Hollywood Reporterof the annual analysis shows.
“2020 is a write-off and really the first half of 2021 isn’t too different,” said John Harrison, Americas media & entertainment leader at accounting and consulting firm EY. used to go back to the theater was really Spider-Man: There’s no way homecame out in December, the square faced the omicron variant hit the United States. And that movie went on to become one of the biggest blockbusters of all time. ”
It also put Sony’s cinema unit on a stellar year. With a 90% profit improvement (or 94% when the numbers are not rounded), it led the way in bottom line profit growth, followed by Paramount, while Netflix once again posted year-over-year earnings. highest in the pack.
For the third year in a row, CHEAPThe studio’s earnings report includes an educational look at the streaming giant, the company’s competition for content, streaming subscribers, and talent with major corporations, despite its finances. it is not directly comparable to studio units in Hollywood. After all, it’s a whole company rather than a unit or segment within a larger corporation, and it’s all about subscription revenue, which the entertainment giants often recorded outside of their film division.
What remains is the fact that financial disclosures by Hollywood studios are very limited and not always easily comparable. For example, Sony covers TV networks, Disney covers live events, etc. With companies like Disney and NBCUniversal reorganizing their reporting and businesses, their latest data also includes quite different from before.
CHEAP aggregate figures for calendar years 2021 and 2020 for comparison, although Disney and Sony have fiscal year mismatches and their executive teams are focused on managing their businesses based on the financial year. Still, the studio’s earnings report provides a snapshot of a business at a time of rapid change, fueled by streaming.
Source: Income statements and SEC filings.
Netflix
Revenue: $29.7 billion 19%
Profit: $6.2 billion 35%
Streamers end 2021 with 221.8 million global subscribers but only added 18 million for the year, less than half of the nearly 37 million recorded in 2020 amid single-hit COVID-19 order at home worldwide. Revenue in 2021 grew only slightly less than a percentage point year-over-year, while operating profit growth slowed after a 77% spike in 2020. Netflix increased its content spending. $17 billion, up from $11.8 billion in 2020, which has already seen COVID production delays and touted series such as Squid fishing game, The Witcher, Emily in Paris and Money Heist and movies included Don’t look up and Red Notice as a driver of viewership. Next? More tentacles. Co-CEO Ted Sarandos said Jan. 20: “Ideas [of] The big-ticket movies people really care about coming out and becoming part of your Netflix subscription are really taking the value proposition to the next level.”
WarnerMedia
Revenue: $15 billion 23%
Profit: $4.3 billion 10%
WarnerMedia’s theatrical, TV content and game licensing business has recovered in what it calls a “partial” pandemic recovery, but some of the company’s disclosures aren’t directly comparable. with disclosures from industry peers. Revenue from this segment grew 23%, led by “TV products” which increased 30% to $8.03 billion, helped by incremental productions for The CW and HBO Max (Gossip Girl, The sex life of college girls). Theatrical revenue increased 19% to $5.24 billion after hit films like Godzilla vs. Kong (global box office gross of $468 million) and Sand dunes ($400 million) as issuance increased from five to 17. Parent company AT&T did not report a profit for the segment, but minus disclosed direct costs ($10.7 billion, up 30% ) from sales, the resulting figure, same as gross profit. , up 10 percent to $4.3 billion. Matched with a larger medium of release and broader COVID recovery, marketing expenses increased 66% to $1.47 billion, and film and television production costs increased 30% to $8.42 billion.
Sony
Revenue: $10.2 billion 24%
Profit: $1.8 billion 90%
There’s a lot to cheer for Sony and its Pictures division. Theatrical revenue spiked 120 percent to $1.1 billion thanks to hits like Spider-Man: There’s no way home and Venom: Let There Be Carnage. $7 billion, thanks to increased show deliveries and Netflix’s licensing deal for Seinfeld, to begin late 2021. The segment’s channels increased revenue 29% to 2.6 billion dollars as advertising recovers from the pandemic in 2020 and Sony acquires cartoon streaming house Crunchyroll. All of that trumps a 38% drop in home entertainment revenue due to COVID-driven product shortages and higher movie marketing costs.
NBCUniversal
Revenue: $9.4 billion 16%
Profit: $884 Million 12%
NBCUniversal has reorganized its reporting units, with a new studio division that includes not only film but also television production and distribution. Revenue grew 16 percent, thanks to 15 percent content licensing earnings of $7.6 billion, and 65 percent theatrical spike to $691 million after the pandemic hit 2020, thanks to support of people like F9: The Fast Saga (exceeding $725 million at the global box office) and Sing 2 ($333 million worldwide made it the highest-grossing animated film released last year). Home entertainment and other revenue rose 3% to $1.2 billion. But unit profits fell as operating costs rose 21% to $8.6 billion, as programming and manufacturing costs jumped 26% to $6.8 billion following the 2020 COVID hiatus and operating expenses. Marketing fees rose 24% to $1.08 billion “due to theatrical release numbers.”
Disney
Revenue: $8.1 billion 8%
Profit: $281 million | 50%
Following the reorganization of the streaming age, analysts consider the “selling/licensing content and other business” business for Disney Media and Entertainment Distribution as the equivalent. closest to its old studio unit. It includes “the sale of TV series content and movies in the TV/SVOD and home entertainment markets, distribution of films in the theatrical market,” music licensing, and the theatrical business. (Disney+ subscriptions are not included in this.) 2021 operating profit here, calculated in CHEAP, fell to $281 million as lower sales and higher costs, such as theatrical marketing, tended to increase with more theaters. Revenue fell 8%, although theaters recovered 87.3% despite major titles, such as Black Widow, released daily on Disney+. The company’s top stage artist is Shang-Chi and the Legend of the Ten Rings ($432 million globally). But “fewer theatrical releases and production delays have limited the ability to sell film content in distribution stores after theatrical release,” Disney noted in a regulatory filing. Along with that, home entertainment revenue is down 33.1% in 2021 and TV/SVOD distribution revenue is down 6.2%.
Paramount
Revenue: $3.1 billion 19%
Profit: $368 Million 71%
In 2020, the first year after the Viacom-CBS merger, the group’s studio unit more than doubled profits. Last year, the company was still on the upswing thanks to a 20% increase in revenue and a 15% drop in costs to $2.7 billion. Theatrical receipts came in at just $241 million, but that number jumped 34% thanks to the pandemic recovery. ONE Quiet place Part II as its biggest performer ($297 million to date), followed by PAW Patrol: The Movie ($144 million). Licensing and other revenue grew 19% to $2.83 billion thanks to deals with its own streamer, Paramount+ and third parties, plus licensing of titles from Miramax , in which it acquired a controlling stake in 2020. On February 15, the company revealed a rebranding after its historic studio’s name. “We are pioneers of an exciting new future, focused on streaming,” said CEO Bob Bakish.
Source: Income statements and SEC filings. Most companies report operating profit, but Paramount reports adjusted operating income before depreciation and amortization, and NBCUniversal reports adjusted earnings before interest, taxes, amortization, and amortization. WarnerMedia does not distribute income to its relevant segment, so THR has deducted the disclosed direct costs from the reported revenue. Profit and revenue figures in billions are rounded and focused on calendar year 2021 versus 2020, although Disney and Sony use different financial years.
A version of this story appeared in the February 23 issue of The Hollywood Reporter Journal. Click here to sign up.
