If you've been watching Disney
Source: Capital IQ, a division of Standard & Poor's; fiscal year ending at the end of September of the named year. Interactive revenue was not broken out in 2004.
Another way of looking at it is in the following table:
Growth in revenue, 2004 to 2009
Source: Capital IQ, a division of Standard & Poor's.
Over the past five years, Disney has come to rely more on its media revenue and less on its studio revenue, despite having hits like the Pirates of the Caribbean series of movies, starting in 2003. This is also despite obtaining Pixar and the recently purchased Marvel (though the latter's contribution isn't in the above numbers).
The trend seems to be continuing. For the first half of fiscal 2010, ending April 3, media revenue grew by 6.6% year over year, while studio revenue grew by 2.7%, and total revenue grew by 3.6%. As percentages of the total, they remained essentially flat. That is, media revenue was 44% of the total, compared with 45% for all of 2009, for example.
I'm not sure this is such a good thing. First, advertisers are spending less on television. According to the Television Bureau of Advertising, television revenue fell by 12.8% from 2008 to 2009. Disney itself noted the difficulty in discussing last year's results, though management has noted that the situation has improved somewhat in the most recent quarter. While a few percentage points of year-over-year increases are nice to see, that doesn't make up for the large drop last year.
Second, more people are spending less time watching television. According to a report by the Yankee Group, people spent about two hours less per day on media in 2009 compared with 2008, most of that from a fall in television viewing.
This has implications not only for Disney, but also for cable operators Comcast
More and more people are watching video online. Right now, the revenue model for this is still in flux. Advertising? Subscription? A mixture of both, depending on what the customer wants to watch and is willing to pay for?
I don't know exactly how it's going to turn out, and neither does anybody else. However, Disney's shift away from studio revenue and toward media, relying more and more on television advertising and fees paid by cable operators, might have come at the worst possible time.