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Disney to scale back Miramax- LA Daily News- 9/26/05


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  • Disney to scale back Miramax- LA Daily News- 9/26/05

    Incoming CEO plans return to low budgets

    Less than two weeks before he officially takes over the reins as CEO of the Walt Disney Co., Bob Iger said the Burbank-based conglomerate will dramatically scale down the output from its Miramax Films division now that founders Bob and Harvey Weinstein have departed.

    "Miramax under them had basically become a major studio," Iger said at the Goldman Sachs Communicopia Conference in New York. "We're still in the Miramax business, but it will be reconstructed to look more like what they started."

    Miramax initially made its mark by releasing small-budget independent films but in later years had such big-budget productions as Gangs of New York and Cold Mountain. Iger said that he now expects from four to six low-budget film releases from Miramax going forward and that, overall, Disney is "reducing dramatically" its investment in live-action films.

    He said the company's studio division experiences better returns and across-the-company leverage when it invests in such Disney-branded movies as Pirates of the Caribbean, which has two sequels in the works, including one scheduled for release in summer 2006.

    On the home-video side, Iger noted that the DVD boxed set of the hit ABC series Lost has already sold more than 1 million units and tops the sales charts. The company also released the first season of its smash Desperate Housewives on DVD on Tuesday.

    But with the home-video market being crowded with television-show titles and classic films, it's become more difficult for newer feature films to make as big a splash because of increased competition and less shelf space in stores.

    "There's a glut of product in the marketplace," said Iger, who noted that 8,000 titles will be released in 2005. "It's actually a business that's showing some growth, but it's showing more challenge for the motion-picture side of the business."

    Also on Wednesday, Disney and Verizon Communications Inc. announced a long-term, wide-ranging programming agreement. Verizon will carry Disney and ESPN programming and broadband services on the Internet.
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