Good day, ladies and gentlemen, and welcome to First Quarter 2011 Walt Disney Earnings Conference Call. My name is Kendall, and I'll be your coordinator for today. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session. Your your host for today, Mr.
Lowell Singer, Senior Vice President of Investor Relations. Please proceed.
Thanks, Kendall. Good afternoon, everyone, and welcome to The Walt Disney Company's First Quarter 2011 Earnings Call. Our press release was issued almost an hour ago, and it's available on our website at www conference call. Joining me in Burbank for today's call are Bob Iger, Disney's President and Chief Executive Officer and Jay Rizzullo, Senior Executive Vice President and financial officer. Bob is going to lead off, followed by Jay, and then we will, of course, be happy to take some of your questions.
So with that, let me turn the call over to Bob, and we'll get
Thank you, Lowell, and good afternoon. I'm pleased to report we had an excellent first quarter driven by strong creative content and our unique to the the call. We benefited from growth in advertising and our media networks and improved consumer spending at our parks and consumer products businesses. Net income was up 54 to the Q1 of 2019. We expect
to be in the range
of $1,300,000,000 on a 10% revenue increase. EPS for the quarter adjusting for comparability grew 45 to the earnings release of $0.68 Next week, we're holding an investor conference. So today, I'm going to keep my remarks brief. Using new technology to enhance the quality and reach of that entertainment and growing our businesses in promising international markets. Nothing epitomizes our commitment to quality, creativity and future growth like the recently christened Disney cruise ship, the Disney Dream.
The dream demonstrates It's how we successfully build on our legacy of great storytelling, technological innovation and first rate service to create a truly amazing guest experience as only we can. The impact on bookings for the entire fleet has been tremendous. Animation has always been at the heart of Disney and this quarter showed how incredibly beneficial strong animated films can be for the company. The Tangled, a crowd pleasing fairy tale adventure is close to $500,000,000 in global box office with Japan yet to open and has added Rapunzel Q1 of 2019. We also are extremely pleased with the performance of our parks and resorts.
Despite difficult weather conditions in the U. S. And Europe. We enjoyed increases in attendance and spending at our U. S.
Parks with new attractions coming online at our parks, our new Hawaiian Resort opening in August and the expanded Disney Cruise Line, there will be multiple additional reasons for to enjoy a great Disney vacation. Our media networks led by ESPN once again had a very solid quarter. The television history. Monday Night Football had its highest rated and most viewed season since 2006 when it moved from ABC to ESPN. Disney Channel with its expanded portfolio of original programming had its best ever first quarter in terms of total viewership.
And Q2. BBC and particularly its own stations benefited substantially from a continued improvement in advertising rates. In sum, we are very pleased with how we've the new fiscal year. We've got a strong creative strategy focused on building our brands and franchises, a talented team and call and a consistent focus on growing our businesses in rapidly changing markets. And with that, I'll turn things over to Jay.
Thanks, Bob, and good afternoon, segment across all of our businesses. Before we turn to your questions, I'd like to highlight the key drivers of our Q1 performance and discuss some of the trends and comparison issues that will influence our results for Q2 and the remainder of the year. Profits at the Media Networks were up 47 the 34% above prior year, driven in part by strong demand for NFL programming on the back of another year of extremely strong NFL Q1, ESPN added 2 BCS games, The Rose and Fiesta Bowls. After the the Disney Channel Worldwide. In addition, results benefited from higher equity income from A&E Lifetime driven by improved performance.
The At Broadcasting, results benefited from higher advertising at our owned TV stations, cost reduction in news the and Daytime Production and the Shift of the Rose Bowl to ESPN. Ad revenue at our TV stations was the At the network, scatter CPM pricing in Q1 30% above upfront levels. At Studio Entertainment, operating income improved significantly year over year, driven by reduced home entertainment distribution and marketing costs. In addition, increased home video units were driven by Toy Story 3's strong home entertainment performance its earlier international release dates compared to last year's release of UP. Results were also helped by lower film write downs.
Our Parks segment delivered strong double digit operating income growth, driven primarily by higher guest spending as well as increased room nights and attendance. Margins grew by 2 20 basis points despite increased expenses from labor cost inflation and higher pension California Adventure Expansion. Domestic attendance came in 2% above prior year levels. Higher admission pricing in part due to a reduction in discounting and higher food and beverage spending helped drive an 8% increase in per capita guest spending. Occupancy across our domestic hotels came in 4 percentage points above prior year levels at 85%.
Average room spending was up 4%. Results also improved at our international parks with higher guest spending in room nights in Paris and Hong Kong. Looking ahead, domestic room reservations for Q2 are currently running 3% above prior year levels. At earnings release. Earned licensing revenue was up 12% year over year.
Higher results also reflected the inclusion of Marvel licensing and publishing business and improved performance at our Disney Stores North America. Operating performance in the Interactive Media segment was in line with prior year. Solid results from our self published games, particularly Epic Mickey and Toy Story 3 were offset by the consolidation of Playdum. Playdum's the Q1 of 2019. Ladies' results were largely driven by purchase accounting, which will continue to impact results for the remainder of the year.
We We continue to be very pleased with advertising and park trends and remain excited about our product lineup for the remainder of the year. Separate from these Trends. However, there are a few comparability issues I want to bring to your attention that will impact our Q2 reported results. At Media Networks. ESPN's results will be impacted by the cost of adding 3 BCS games as well as airing the Cricket World Cup by our ESPN Star Sports Joint Venture.
Studio Entertainment faces tough comps given last year's release of Alice in Wonderland in Q2 the Q2. And we have no as we have no comparable release planned this quarter. In addition, home video comparisons will be difficult given that UP Q2 of last year. I also want to remind you that the timing of the Easter holiday will impact our parks Resorts results falling entirely in Q3 this year versus last year when 1 week of the holiday period fell into Q2. Our Q2 results will also include costs associated with the January launch of our new cruise ship, the Disney Dream.
During the Q1, we've continued to repurchase shares. For the fiscal year so far, we've purchased over 28,000,000 shares for approximately $1,000,000,000 Our 2011 is off to a very good start, and we look forward to discussing our strategy and initiatives in more detail with you next week at Investor Conference. With that, I'll turn the call back to Lowell for Q and A.
Thanks, Jay. As everyone knows, we will be hosting an Investor Conference next week, and that investor conference will be webcast. At the conference, management will address variety of key strategic issues. As such, to the extent possible, we'd like to use today's call to address your questions about our Q1 results and the current trends since we don't plan to focus on those topics next week. We are certainly allocating time during next week's conference to answer your broader strategic questions.
So with With that preface, operator, we're ready to take the first
the
the Endley. Please proceed. Thank you. Good afternoon. Jay, I just want to go back to your comments on ESPN Advertising.
I think last the Q1. You said that ESPN was pacing double digits and you put up a plus 34 or a plus 27 adjusted. So just trying to see if to the You benefited for some licensing film share in the quarter given how strong your product lineup has been. But you've spent the last kind of 2 years rightsizing the cost structure there. So any Any help you could give us on sort of how much cost sort of annualized in terms of overhead savings you've taken out of the studio over the last 2 years, so we can think about sort of the underlying profitability
Thank you, Ben. Let me take your first question about advertising. I don't want to be more explicit than the And up double digits for ESPN. I don't we really are not in the habit of giving explicit guidance, and I think we'll leave it at that. Relative to the studio returns.
There clearly were particularly in our distribution, Bob and I have talked a lot about how we have reoriented our distribution organization and our marketing organizations to really span all of the channels the film's release. And part of the benefit of that has been felt in the home entertainment segment where we really have produced Both the marketing and distribution costs of taking our product to market. So, it's not the savings the I'm not going to get into, there are different numbers of releases and different products in the market every year and How we market them, I don't want to make a commitment about what how that cost is going to annualize.
Ben, this is Bob. I'll add one thing about ESPN the And that is that, while we're not going to give any more details about pacings from a percentage perspective, it's safe to assume the the sectors. There's certainly real strength in automotives, in retail, in telcos, in various forms of consumer the the in programs like SportsCenter and PTI. So they're seeing a very, very strong marketplace.
Thanks for the color, guys. Okay, Ben. Thank you. Operator, next question please.
Your next question comes from the line of Spencer Wang with Credit Suisse. Please proceed.
Thanks. Good afternoon. I guess for either Bob or Jay, in the event that there is a work stoppage for either the NFL or the NBA, Can you just walk us through how that would impact expenses recognized? And would there be impact on affiliate revenues just given the programming covenants. And then just one housekeeping question on the quarter for Jay, I guess.
If you ex out the New Year shift in the year ago quarter. What would attendance have been up year over year? Thank you.
We have provisions in our NBA and NFL contracts the They deal with potential for loss of games for a variety of different reasons, including work stoppage over labor disagreement. But We do not make the details of those provisions public, which is our obligation to the league, just as we don't make the Much of the detail of these contracts public. I think that you're pretty familiar with the program covenants that we have with the cable operators where we don't recognize revenue until we achieve a certain level In terms of live programming, we don't make the details of that available either in terms of the number of hours of live programming or the components that we have to deliver. So I think the
attendance there wasn't any New Year's impact between the 2 years.
Okay, great. Thanks.
Yes. All right, Spencer. Thank you. Operator, next question please.
Your next question comes from the line of Jessica Reif Cohen with Bank of America Merrill Lynch. Please proceed.
Thank you. Can Can you tell us what retransmission consent is up to now? And if you could include reverse comp, that would be great? And how much further improvement can you make in fiscal 'eleven and fiscal 'twelve. And I wanted to follow-up, I think Jay said that the dream the opening of the dream drove Cruise bookings.
Can you give us any color on what the impact was on overall bookings? Because obviously there's the Q4. And Dream is a bigger ship with higher prices. And if I could just throw one last one. Bob, you mentioned in the shareholder letter this year.
You actually discussed the Shanghai Park and I was just wondering if the deal has actually been finalized.
I'm glad I wrote down the three parts of your question or the three questions. Retransmission consent, we've cut some deals and reverse compensation. We've cut some deals already, Time Warner being, I think, the most obvious. There will be more deals to come. We fully Back to gain retransmission consent payments from distributors as deals that are currently in place expire.
And We can't give you a sense for when those are, but there are negotiations going on just about all the time, nor can we the I'll tell you the percentage of deals that we've already completed or the amount of revenue that we're bringing in. I don't we may give you some range Once all these deals are done, what it might mean in terms of steady state revenue improvement, but we'll discuss that next week at the Investor Conference. The Second question about the Dream. Jay, I think mentioned in his opening comments that bookings for 3 all three ships were quite strong. They They're running over 80% for the year.
The Dream itself is 89% booked for the year. So there considerable interest in our cruise business. We believe that the fact that the dream is so booked, particularly during new ship to our other ships and our other itineraries. It's been very positive for us. And we've to people who are already sailing on the dream who want to come back.
We've on Shanghai, we've signed multiple agreements with the Shanghai Shanghai government and our prospective partners for Shanghai Disneyland. We had received prior to signing the preliminary approval from the Beijing or the central government. And we're now awaiting a final or formal approval from the Beijing government before we make a formal announcement and actually break ground, and we're not going to speculate when that will be.
The Thank you.
Thanks, Jessica. Operator, next question please.
Your next question comes from the line of Doug Mitchelson with Deutsche the bank. Please proceed.
Thanks so much. Let's see if I can straddle the question here between next week and next week. If you look at fiscal 'one to fiscal 'two, parks dropped in EBIT about $600,000,000 or so, took about 4 years after that to get back to their prior profit Fiscal 'eight to fiscal 'ten again dropped almost $600,000,000 EBIT, but you just improved $66,000,000 domestically So the question is, it looks like you're more on pace to recover in 2 years and it looks like you're hitting an inflection point at the parks in the recovery. And one, is that accurate? Do you sort of feel the Q1 of 2019.
And 1, is that accurate? Do you sort of feel that momentum? And 2, if so, if it looks like it could recover faster than last time, is there anything you could point Any particular factors that is driving that? Thanks.
Thanks, Doug, for the question. I would say the I think that we I think it's clear that we have what we've been saying for the last couple of quarters about implementing a strategy to bring us back to our normalized pricing at as we are waiting for demand to come back, it has clearly manifested itself again in this quarter, as we discussed last quarter. And so we're certainly on a trajectory that we expected to be on and talked
the
the combination of continuing to add great product to our parks around the world, as well as the The interest in travel definitely coming back and the sense that we Incredible value in the way we've priced our products is manifesting itself in a lot of the Bob mentioned what's going on in our cruise business, just blowing the doors off in terms of demand and interest. And we're seeing Nat and the volume as we gave out the numbers in both our domestic parks as well as in Hong Kong and in Paris. So it's very broad based, but the speed and rate of trajectory, I don't want to take a guess about that.
If I look
We're still seeing Doug, a consumer that's shopping for value and that's still shopping late. There isn't a significant change in booking window So, for instance, so you still have an environment that, while less challenged than it was certainly a year ago, it still has its challenges. Another thing that I think is interesting and we've pointed this out before is that if you look back at the early part of the last decade the When we obviously experienced some difficult recession and other significant events like 9eleven and Middle East War, we're much better position today than we were then in terms of the mix of value price rooms, where back then we had a larger percentage of premium price the West Resort in Orlando. And so we're more accessible and we're more excessively priced than we And it doesn't have to do with discounting, it just has to do with the inventory that we currently are making available. I think that's a Positive thing.
Great. Thank you very much.
Thanks, Doug. Operator, next question please.
Your next question comes from the line of Michael Nathanson with Nomura. The
Thanks. I have one for Jay and affiliate fees and one for Bob and Marble. Jay, it looks like I think affiliate fees grew about 9% this quarter. And I wonder, is Is there anything unusual in this quarter that now what will peak for the year? Was there anything one time in the Philippines growth this quarter?
The Thanks, Michael. Just a couple of things. I wouldn't call it anything unusual, but remember the We are now operating on Warner agreements and subs have resumed their the And that has contributed to increased affiliate fees. I wouldn't call those unusual, but they're definitely contributing
the Okay. And then Bob, when you bought Marvel, one of the things you talked about was taking control of the international licensing on Marvel. And now that you've had it for a good part of the year. I wonder if you could just update us on what you've seen on the licensing side from Marvel directly under Disney's
Well, we're pleased with the integration that we've done internationally, moving out basically third party agents and the Disney licensing people. We've been working really hard with Marvel to basically get up to speed With all the Marvel properties and their general approach to licensing in the marketplace, we had in the market last year as a new product Ironman. And from a licensing perspective, that was slightly less than we would have liked it to have been, still a very strong product. Coming into the market for 11 is Thor and Captain America and then of course in 2012 Avengers, which features we all know Captain America the And we're very, very excited about that as a potential franchise for the company. So a lot of the work that we've been doing is essentially Managing what I'll call day to day under now one company roof and preparing ourselves for the what We believe, great prospects for franchises in the future, notably, Avengers and then hopefully, ultimately, Iron Man after that.
We We feel good about their product pipeline and we feel good about the work we've been doing to learn more about Marvel and the overall licensing opportunities and obviously the Put the organizations
together. Okay.
Thanks. Thank
you. Operator, next question please. Your next
question comes from the line of Richard Greenfield with BTIG. Please proceed.
Hi. Thanks for taking the question. So on theme parks, you both I think, Bob, you started out by asking or mentioning that weather both domestically and internationally played a factor in the quarter, and yet you were the And then 2, I think Tom Staggs was quoted in the last week answering a question related to the impact of the Universal basically saying, it's safe to say it didn't help us, but it didn't really hurt us. And we're just hoping maybe you could And on how much of an impact do you think Harry Potter has had on you? And do you think as that starts to wear off in terms of the newness of that park, the Will that actually benefit results going forward in the next few quarters?
Thanks. We had a trifecta in terms of weather in the rain in Southern California. And we had a major Northeast blizzard right after Christmas that shut all the airports down across the Northeast the made it impossible to travel. We fully expected that there would be a lot of people from that area who would be going down to Orlando as a for instance. But we I cannot quantify exactly what it is that we lost from a revenue perspective.
By the way, in California, we may have made up for the Some of it once the rain stop because you get a lot of local attendance, particularly during the holiday season when kids are out of school, but it's just really difficult to quantify. I I'll let Jay take a stab at Harry Potter land. Yes. Except I will say that they built a great property down there, not meant to the an advertisement for the competitor. And I believe that when a competitor puts a good property in the marketplace, it brings more property to the market more people to the market.
So I think it stimulates attendance to Orlando. We all know that that's good for us because we usually get a good piece of all visitation to Orlando.
Right. Just continuing on that, I mentioned that our domestic parks were up 2 Orlando was actually up more than 2%. So the impact, if there is any of what the Bob is probably being swamped by what Bob described that to the extent that it brings more people to the market, we do get a big share of that. The On your other question related to weather impacts, I only give you this insight. Needless to say, local people are more the the the the
It really isn't, to be
honest with you.
And Jay, I'm sorry,
you said that domestic was up 2% in total, but Orlando was up more than 2%. Was California actually up as well?
The California Park was slightly down for the quarter.
Thank you.
Thanks, Rich. Operator, next question please.
Your next question comes from the line of Anthony DiClemente with Barclays Capital. Please proceed.
Good afternoon. Congratulations on the outstanding quarter. I have two questions. One's on ESPN and the other the parks. Just wondering, ad pricing in the scatter market, I'm just wondering, your ratings are way up and So trying to just disaggregate pricing and units and wondering if you're seeing the premium versus upfront pricing widen As we move forward in time here.
And then I have a follow-up.
Well, I know scatter pricing at the network is up about 30 the slightly more difficult thing except my comments earlier about ESPN's advertising marketplace, obviously, are relevant here. They're just Having a gangbuster advertising revenue quarter right now, and we believe that's going to continue. Was there a second part of that question that I missed?
No, the That was it. I have a different question on parks. Jay, I think you said that Q2 room reservations at the parks Give us a more normalized estimate or roughly what would that 3% equate to? I don't know if it's possible if you could normalize the Easter comp.
Yes, there's not a big room night move on the Easter comp in terms of occupancy. Basically, it's more on the rate and spending side and the day visitor side that affects the weeks of Easter the quarter. The occupancy is not that different, so I wouldn't make a big adjustment for it.
Okay. All right.
See you next week.
And the OI I move as I've discussed in previous quarters of the Easter shift is about $20,000,000 Round numbers.
Thank you. Yes.
Thank you. A couple of questions. 1, Jay, on the balance sheet, projects in progress increased $800,000,000 Is that the cruise ship and other assets went down $700,000,000 Could you just give us an idea of what's happening there? And then in In terms of the hotel bookings at the theme park, they were up 3%, as Anthony just said, they were up 5% on the last conference call. Wondering what the difference is for the slowdown?
I mean, It sounds like trends are excellent. So is it just that pricing is much higher than it was a quarter ago?
Pricing is high let me To answer your question, reverse order pricing is higher than it was a quarter ago. That probably doesn't account for the difference between the 53. Remember, you're Q2 on quarter, and we've been increasing our occupancy and bookings over the last 4 or 5 quarters. The I wouldn't read a big difference between 35 at this point anyway. And on your first question, It is yes, it's the cruise ship and it's the Miramax sale.
Okay. Thank you.
Thank you, Alan. Operator, question please.
Your next question comes from the line of James Mitchell with Goldman Sachs. Please proceed.
The question. Can you talk a little bit more about the consumer products revenue growth? Just looking at the Q, you had very good headline revenue growth in that division, but a chunk of it came from the Marvel acquisition.
Yes, there was revenue due to the consolidation of the Marvel acquisition, But there was an offset in sort of core underlying consumer product performance because of the increase the film share that gets recognized at the studio. But the fundamentals of consumer products were pretty much across the board. The licensing comparables were up, Both were up. The Disney Store revenue has been up. And then Marvel both the Marvel licensing business and the publishing business being included in the results all accounted for the increase in overall CP.
Needless to say, this to the strength of Toy Story 3 on the licensing side and the Disney Store side and largely on the Disney Store side, though the comparables on our renovated stores are quite strong compared to what they were prior to renovation.
Thank
the Thanks, James. Operator, next question please.
Your next question comes from the line of Tuna Amobee with Standard and Poor's Equity Group. Please proceed.
Thanks for taking the question. Now I don't know if this sounds like a strategic question, Bob, but the It seems like basically it's a battle between Apple and Android enabled operating system. So when you think about your strategy there and given obviously crucial position Apple hold the Steve Jobs Holding the Company. Is it fair to say at this point that you're kind of more inclined to go with the Ios operating system in terms of kind of the device interoperability That you're talking about here or are you more like experimenting with pretty much everyone out there in terms the
I'm thinking of just saying yes. The I am going to spend a fair amount of time next week talking about our digital media strategy overall, but I don't want I'll be dismissive of your question. There isn't one company, Apple or any other company for that matter that's driving our strategy. What's driving the strategy is really the incredible developments we're seeing on the technology the When added to great content and brands provide for more opportunity than we've ever seen before and more opportunity for the consumer as well, not just the To consume more media, but to do it in more places and with more convenience and access the Navigation and Interoperability. The decisions we're making in terms of what media that we distribute our product are made based on a variety of We want to be in a good place on a good platform where there is good navigation and decent access to revenue and our brand and our products are the potential so that the underlying technology or the underlying capital behind the effort is such that the platform is going to be around for a long time.
The And we're looking both domestically and internationally for opportunities to essentially create more competition among distributors. When you have great content. The more out there in terms of your ability to distribute that content to consumer, the better off you are. And then There's another factor or a couple of other factors that are important. 1, piracy.
There's no question that being available, well priced, Well timed to the market is one of the best ways to combat piracy, and we have got to continue to be mindful of that because the absence of being available in In a world where there's great technology and great content can be very dangerous. And then I think it's also important for us to be relevant. When you're on these new platforms. You just appear to be more relevant to the consumer, and I think that is both brand enhancing and business So I don't know that I'm choosing iOS and Android and getting into all those details. We might get into more a little In more detail with you next week, but I'd be glad to discuss and will discuss in much more detail our thoughts about what's going on in the marketplace in terms of digital media and changing consumer behavior and all the different opportunities that a company like Disney with brands Disney, Pixar, Marvel, ESPN ABC, all the opportunities that we're seeing.
It's pretty interesting time. It's important
to the It's important to
be out in front and to be experimental because we haven't discovered yet the silver bullet or the business model that's going to prevail,
That's helpful. Just a quick follow-up. So you rolled out authenticated ESPN, which seems like a groundbreaking milestone for you. And when you think about Disney Channel, for example, and is that something That could also be on the table for authentication or is that pretty much hampered by the potential advertising monetization for that particular channel? Just kind of trying to get a sense of Disney Channel and others that could follow along the same time.
We think we'll have opportunities to authenticate a number of our channels. The deal that we cut that was obviously the big And one of the first was with Time Warner just for ESPN. We've been pretty vocal about the fact that the multichannel or the expanded basic cable service is of great value to the consumer, particularly when you consider the substantially increased investment in original programming that's available on all those channels. So you're right now getting a lot more quality and a lot more choice and it's a pretty good we think it's a pretty consumer proposition. If we can add to that authentication, which is giving the consumer the ability to watch that channel in the More places as we did with ESPN, so that you can turn a laptop on in Los Angeles if you're a Time Warner customer or in New York and watch ESPN.
That's the That's a big deal because all you're doing is value you're creating enhanced value for the package that's being offered the consumer and for the distributor. So we are extremely supportive of Dedication and believe that this is just the beginning of a trend that we'll be seeing not just for ESPN, but for multiple Disney the so called cable television properties.
Thank you.
Thanks, Judah. Operator, next question please.
Your next question comes from the line of David Miller with Karas and Company. Please proceed.
Yes. Hi, good afternoon. Bob, could you detail
the
the change obviously in DVD sell through as it applies to really all genres out there. And has it forced you or Rich Ross and Rich process team, etcetera, to rethink negative costs and to rethink how films are
quarter for Toy Story 3. The overall home video marketplace for the industry has conference continues to soften. We've been relatively well positioned because of the strength of the brand, the nature of the titles that we And as we've said a number of times, the fact that we tend to make movies that people want to own so their kids can watch Multiple times. We also are librating our content or managing our libraries very well, so that when We bring certain product out. We create events by bringing them out and defy logic, so to speak, in terms of the marketplace.
So look, Toy Story was a successful title Internationally, certainly the sell through rates on a when you consider the conversion and the size of the box office substantially different than the marketplace we saw years back. Interestingly enough, what Toy Story 3 What we did was it increased sales of Toy Story 1 and 2, which was we found very interesting.
Right.
The library title that I What was really interesting is we brought Beauty and the Beast back in Blu Ray in the fall and that was extremely well proceeds. We bring these out as events and we package them very well in our stores and retail with a variety of different consumer products and that's been a winning proposition. We've also We've seen a fair amount of success with some of our direct to video titles. And interestingly enough, over the last the 3, 4 years, they've been fairly steady in terms of performance and we have not seen the erosion of those kind of titles that we've seen with some of the certainly the live action titles. In terms of the overall impact of home video to the movie business, we've been steadily reducing the number of movie titles that we make in a year.
We, as you know, are talking about well under 10 the Disney branded titles a year that will include certainly a Pixar title and hopefully a Disney animation title per year. Add to that a couple of Marvel titles per year and then we'll be distributing the DreamWorks titles. The We like the level that we're talking about in terms of total investment. And we're going to look as part of that mix to make big blockbusters that have the budgets, because not only we believe they work as movies, but they work as franchises for the company and as company wide or business wide Pirates, a great example of that. And we're also going to build into that mix relatively inexpensive titles, Disney branded, but much lower project.
I think I don't want to speak for the whole industry, but I think for our studio and they know this well, it's extremely wise the To take a very eyes wide open approach to the trends they're seeing in the marketplace and react accordingly in terms of expense and then also react accordingly in terms of how the product is brought to marketplace in terms of pricing and windows and nature of the packages and the offering. And we'll get into that a lot more next week.
Okay. Thank you.
Thanks, David. Operator, we have time for one more question Good night.
Your last question comes from the line of John DeNiedis with UBS. Please proceed.
Hi. Thank you for squeezing me in. You guys saw some margin expansion in the Broadcasting segment. Given the lower ratings at ABC, how are you thinking about programming investments moving towards the upfront? Thanks.
Well, obviously, John, we've been talking a couple of quarters now about having Our ratings supported by better programming on ABC. We've also been investing in ABC So I think that we continue to want to create and own great programming for the ABC Network. It is for us a platform to create content that can be
the
follow our principles of great creative product leading the way for the company. So we will continue to invest in that. You the news and daytime. And we continue to work both sides of the Make no bones about it. We want to have great creative products out there and we're investing behind it.
And, Pui, we have new the I mean, we have someone new in the role of Prime Time, Head of Prime Time for ABC, Paul Lee.
And he and
I have talked a fair amount because he's in a job that I had many, many years ago. And I the Advised him that in heading to the upfront and in the middle of pilot season that it's about making great shows, it's not about making the a lot of that, meaning, in development, it's not about volume, it's about quality. And that doesn't mean that you are looking to Make a lot of pilots. I don't think that's wise, particularly in a time that's really competitive for talent. It doesn't help when you water down the field.
And I think he's being really disciplined and it's very early, but I like the product that he's developing and we'll get a chance to the
John, thanks. And thanks again, everyone, for joining us today. Note that a reconciliation non GAAP measures that were referred to on this call to equivalent GAAP measures can be found on our Investor Relations website. Let me also remind you that certain statements on this call may SECURITIES. We make these statements on the basis of our views and assumptions regarding future events and business performance at the time we the and we do not undertake any obligation to update these statements.
Forward looking statements are subject to a number of risks and uncertainties, and actual results may differ call. Securities and Exchange Commission. This concludes today's call. Thanks again, everyone.
Thank you for participation in today's conference. This concludes the