|By Raj Giri||November 01, 2012 | Comments|
Revenues from our Consumer Products businesses decreased 20% to $15.8 million from $19.8 million in the prior year quarter, primarily due to a decline in Licensing revenue, with one fewer video game release in the current quarter.
* Home Video net revenues were $6.4 million as compared to $8.3 million in the prior year quarter. The 23% decline in revenue reflected a reduction in average unit price and an adjustment to our allowance for returns that were partially offset by an increase in shipments. Although shipments increased 36% to 933,100 units, a majority of this growth was derived from lower priced new release and catalog titles; the resulting change in product mix contributed to a 16% reduction in average price to $11.01. A $1.7 million adjustment to our allowance for returns was made to reflect lower sell-through rates, primarily from our prior period releases, and increased our reserve for returns to 50% of gross retail revenue as compared to 21% in the third quarter last year.
* Licensing revenues were $7.1 million as compared to $9.0 million in the prior year quarter. The 21% decline was primarily due to reduced sales of video game and novelty products. Royalties earned from the sale of video games declined by $1.2 million primarily from one fewer release, WWE All Stars, in the period. WWE All Stars was released in March 2011 and will not be refreshed in the current year. Shipments of our franchise video game, WWE' 12, also declined 5% in the quarter to 127,000 units, resulting in a 22% decline year-to-date. Royalties from the sale of toys, however, increased 16%, or $0.5 million, reflecting the introduction of our Brawlin' Buddies toy by Mattel with strong domestic retail support.
* Magazine publishing net revenues were $1.6 million as compared to $1.9 million in the prior year quarter, reflecting lower newsstand sales in the current year quarter.
Revenues from our Digital Media related businesses were $7.5 million as compared to $6.9 million in the prior year quarter, representing a 9% increase.
* WWE.com revenues increased to $4.8 million from $3.7 million in the prior year quarter, primarily due to increased rights fees associated with the licensing of original short-form content to YouTube. The related programming agreement with YouTube commenced in February, 2012. Sales of online advertising were down slightly from the prior year quarter.
* WWEShop revenues declined to $2.7 million from $3.2 million in the prior year quarter primarily due to a 21% decline in the volume of online merchandise sales to approximately 54,000 orders. The average revenue per order increased 2% to $47.77.
During the quarter, WWE Studios recognized revenue of $1.9 million as compared to $3.7 million in the prior year quarter, reflecting the timing of releases from our pre-2010 movie portfolio. There were three feature films released in the current quarter, Barricade, No Holds Barred, and The Day as compared to one release, Inside Out, in the prior year quarter. No Holds Barred was distributed as a remastered DVD edition of a 1989 theatrical release. The Day was distributed as a limited theatrical release. Revenue generated by this movie will be recognized as participation statements are received. As such, no revenues were recorded for this movie during the quarter. The quarter was characterized by a $4.6 million reduction in film losses as the prior year quarter included a $5.1 million impairment charge related to our self distributed films. Excluding the impact of that charge, WWE Studios' movie portfolio generated a loss of $1.5 million compared to an adjusted loss of $1.0 million in the prior year quarter.
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