Walt Disney Company (DIS)

Home Entertainment

In the domestic market, we distribute home-entertainment releases under each of our motion picture banners. In the international market, we distribute home-entertainment releases under each of our motion picture banners both directly and through independent foreign distribution companies. In addition, we develop, acquire, and produce original programming for direct-to-video release. The Company recently reorganized its home-entertainment operations into one worldwide home-entertainment unit.

The domestic and international home-entertainment window typically starts four to six months after each theatrical release with the issuance of a variety of physical and electronic versions of each title (including, but not limited to DVD, BluRay and Electronic formats). We have recently begun to distribute our films in the home-entertainment market electronically, including via iTunes and other distribution services.

Domestically, most titles are sold simultaneously to both “rentailers,” such as Blockbuster Inc., and retailers, such as Wal-Mart Stores, Inc. and Best Buy Co., Inc. In the international home-entertainment market, titles are either released simultaneously in the rental and retail channels or with a rental window before the retail window, depending on local market regulations, DVD hardware penetration, and demand for DVDs. The international market has experienced a trend in the compression of, or in some cases the disappearance of, the rental window.

As of September 30, 2006, under the banners Walt Disney Pictures, Touchstone Pictures, Hollywood Pictures, Miramax, and Dimension, 1,362 produced and acquired titles, including 1,129 live action titles and 233 cartoon shorts and animated features, were available to the domestic home-entertainment marketplace and 2,912 produced and acquired titles, including 2,227 live action titles and 685 cartoon shorts and animated features, were available to the international home-entertainment market.

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      The domestic and international home entertainment window typically starts four to six months after each theatrical release with the issuance of DVD and VHS versions of each title (primarily DVD). Domestically, most titles are sold simultaneously to both “rentailers,” such as Blockbuster Inc., and retailers, such as Wal-Mart Stores, Inc. and Best Buy Co., Inc. Upon a title’s home entertainment release, consumers are afforded the option to rent for a limited period of time, typically two to seven days, or purchase the titles outright (“sell-through”).

      In the international home entertainment market, titles are either released simultaneously in the rental and retail channels or with a rental window before the retail window, depending on local market regulations, DVD hardware penetration and demand for DVDs. The international market has experienced a trend in the compression of, or in some cases the disappearance of, the rental window.

      As of October 1, 2005, under the banners Walt Disney Pictures, Touchstone Pictures, Hollywood Pictures, Miramax and Dimension, 1,174 produced and acquired titles, including 1,005 live action titles and 169 cartoon shorts and animated features, were available to the domestic home entertainment marketplace and 2,508 produced and acquired titles, including 2,029 live action titles and 479 cartoon shorts and animated features, were available to the international home entertainment market.