Earnings: Disney Interactive Revenues Up 13 Percent But New Segment Turns In A Loss

While everyone else looks at the big picture—The Walt Disney (NYSE: DIS) Company runs into the economic version of the law of gravity—we've been waiting for a different set of numbers: Interactive Media, reporting as a segment for the first time and the results are mixed. Interactive Media revenues rose 13 percent to $313 million, but segment operating income dropped $58 million to a loss of $45 million.

Overall, the company reported an 8 percent drop in revenue to $9.5 billion from $10.4 billion the previous year and a 32 percent decrease in profit, to $845 million from $1.25 billion. Disney earned 45 cents per share for the holiday quarter, down 29 percent from 63 cents last year; analysts polled by FactSet Research (via MarketWatch) expected Disney to post a profit of 52 cents a share on revenue of $10.1 billion.

The new segment represents the Disney Interactive Media Group, headed by Disney digital vet Steve Wadsworth and formed last year by the merger of the Disney Interactive Group with video gaming unit Disney Interactive Studios, and "certain new business initiatives." The chief operating businesses are Disney Online and DIS. It does not include the results for ABC.com, ESPN.com, among others—that means it does not reflect a large portion of the company's revenue from digital media sales. When the segment results came up during the earnings call, CEO Bob Iger said the company would continue to invest in video games and that the virtual worlds and mobile content areas are closer to profitability. More after the jump.

The company attributed the decrease "primarily" to a decline at Disney Interactive Studios " as higher sales volume was more than offset by an increase in unit cost of sales and higher marketing expenses in the current quarter." DIMG also manages Disney-branded mobile and provides the tech infrastructure for ABC.com, ESPB.com, Disneyshopping,com, the theme parks online, etc. DIMG gets paid for those services but the sites are managed from their respective groups and their results are included in the relevant segments.

Through last year, DIS and WDIG results were folded in with Consumer Products and Media Networks, respectively; new business initiatives were reported in corporate and unallocated shared expenses. Along with earnings results today, Disney filed an amended annual report for the year ended Sept. 28, 2008. The change provides a peek into the company's interactive activity over the past 28 months. Some items of note:

—FY08: Interactive Media increased revenues 47 percent to $719 million from $490 million in FY07. DIS contributed the bulk of the increase— $160 million—due to new self-published video games (an important initiative for the company) for High School Musical, Hannah Montana andTurok. (The previous year's releases were Pirates of the Caribbean, Spectrobes and Meet the Robinsons.) Disney Online's revenue increased $71 million aided by the first year of full revenue from virtual world Club Penguin.

But costs, including video game and internet content development, rose 25 percent for the fiscal year, to $974 million. For instance, Disney Online benefited from Club Penguin on the rev side, but it was also the first full year of carrying the virtual world's costs, while the increased emphasis on developing video games meant more investment. The $258 million loss was tempered by an unlikely source—lower costs for mobile services following the shut down of the Disney MVNO in the first quarter—and decreased 11 percent over FY07.

—Not a profit center yet: During eight quarters in FY08 and FY07, Interactive Media operations showed a profit only once—$13 million in Q108, on revenues of $276 million.

—New businesses: Think Digisynd, Ideal Bite. A Disney spokesman wasn't naming names but added some explanation: "The emerging businesses referenced are a number of small acquisitions and some internal projects that allow us to participate in new forms of interactive media content and services. The businesses are managed separately from the rest of DIMG and are seen as incubation investments."

CLIP Citizen photojournalism site Scoopt to close

Posted by Helena Deards on February 4, 2009 at 10:12 AM

Citizen photojournalism site Scoopt will be no more after February 6, its parent company Getty Images has announced.  The site, which was created in 2005 and bought by Getty Images less than two years ago, will continue to exist until March 6th although no new images will be accepted. Getty spokeswoman Molly McWhinnie said that the decision would allow the company "to focus our energies on more of our core products".

Scoopt allows amateur journalists to contribute their works, which are then sold on to publishers.  The photographer keeps copyright whilst Scoopt gets an exclusive 12-month license, and profits from the sale of an image are split 50/50 between the two.  Getty Images currently also has a deal with social media site Flickr whereby selected Flickr images are featured on the Getty Images platform.

The demise of the site could perhaps be seen as unexpected in an era where citizen journalism and photojournalism have an increasing presence in all manner of publications.  However now that amateur journalists can go straight to the public via sites such as Twitter and TwitPic (last month's Hudson plane crash for example), perhaps it shouldn't come as a surprise that the middle man is no longer needed.  But Scoopt's editorial aspect is what TwitPic lacks, that which allows users tolook at images and trust in their origins - and this is perhaps the real loss to the world of photojournalism.

CLIP Phanfare's Photon: The Best Photo App for the iPhone Yet?

Phanfare is one of the lesser known photo sharing services on the Net, but its new iPhone app is putting the company back in the spotlight. This new app, dubbed 'Photon' (iTunes link), might just be the best photo sharing app we have seen on Apple's phone. Thanks to a smart integration with the company's cloud storage and online gallery features, as well as some nice enhancements to the iPhone's own camera features, this free app looks like a clear winner to us.

In our round-up of photo sharing services last year, we wrote that Phanfare turned out to be a surprisingly good and well designed service. Photon now takes this service and puts almost all of its functionality on the iPhone.

At its core, Photon is the easiest way to browse through all of your photo albums on the iPhone. Thanks to the Phanfare desktop app and plugins for most of the popular desktop photo apps, you can upload all your pictures to the service. Free accounts come with 1GB of space, while unlimited accounts cost $55 a year. Phanfare also offers a wide array of photo printing services.

Features

Photon's interface is similar to that of Apple's own Photo app for the iPhone, but Phanfare's app comes with a number of crucial new features - besides the obvious advantage of being able to access all of your pictures from the phone. The built-in camera app, for example, comes with an image stabilization feature, as well as a self timer.

In addition, you can apply effects like grayscale, sepia, or auto levels to your pictures. For slideshows, you can upload your own music to Phanfare, but you have to do so through the company's website. The app also lets you crop your pictures and add captions to your images.

Of course, you can also publish new galleries to your public Phanfare sites, and invite friends and family to view your new pictures online.

Because the app caches your images on the phone, most of Photon's features even work when you are offline. You can choose how much disk space on the phone you want to dedicate to the cache.

One feature we did miss from the app was the ability to zoom into your pictures, though Andrew Erlichson, Phanfare's CEO, tells us that this will be included in the next release of the app, which should be available within the next four weeks.

Import

Phanfare's desktop app is also quite well thought out, though it doesn't quite match the polish of the company's iPhone app. It does, however, present the easiest way to batch-upload your photos to Phanfare. After that, you can use plugins for iPhoto, Picasa, and a number of other services to upload your pictures instead. You can also import your images from Snapfish, Shutterfly, Kodak Gallery, and SmugMug.

Verdict

Phanfare's Photon is currently the best photo sharing and photo management app on the iPhone. It is important to note that Photon puts less emphasis on social feature than other services like Radar, which we reviewed last week. Instead, it concentrates mostly on giving you easy access to all of your photos, while also providing you with the option to share them with your friends.

Phanfare's CEO Andrew Erlichson strongly believes that the iPhone and other smartphones will disrupt the traditional point-and-shoot photo camera market in the long run and will allow new players like Apple to get a foot into this market. This app is Phanfare's first step in following the market in this direction by marrying the iPhone's camera feature with a very capable cloud storage and photo sharing service.