Warner Bros. studio lays off 50 in Burbank
Warner Bros. Studios is the latest to feel the loss of falling home video sales, laying off roughly 50 employees last week. All the workers were based in Burbank.
Company officials declined to comment, but in a statement, the studio said it would be “undertaking limited staff reductions in our home entertainment and consumer products divisions.”
The number of employees and positions impacted would be a “relatively small percentage” of the company’s domestic workforce, the studio added.
Warner Bros. employs roughly 5,500 people in the United States.
The move comes at the same time the Walt Disney Co. shed roughly 200 jobs in home entertainment and distribution. Most of those jobs also were in Burbank.
Industry observers say the cutbacks reflect the steady downward trend in sales of home videos and continuing uncertainty about the success of video-on-demand and other methods of delivering digital copies of movies and television shows to consumers.
Warner Bros. parent Time Warner Inc., which owns HBO, CNN and the Turner Broadcasting System, has been aggressive in making movies and shows available digitally with what Time-Warner Chief Executive Jeff Bewkes has called a “content everywhere” strategy.
Last year, Time-Warner launched HBO Go, which makes content aired on the HBO family of cable networks available to subscribers on their computers and tablets. Last month, the Warner Home Entertainment Group bought Flixster, which owns popular movie site Rotten Tomatoes. In a conference call with investors, Bewkes said the company hopes to make Flixster a stronger portal for sales of digital copies of films.
Industry analysts say it is difficult to predict how things will shake out, as studios benefit from rentals through competitors such as Netflix while they promote competing digital delivery services.
“The emerging and changing distribution patterns, the changes in technology to deliver content — it is all having an effect on the whole industry,” said Paul Dergarabedian of Hollywood.com. “It’s hard to know where the industry is going to be in five years.”
In the first quarter of 2011, Time-Warner reported a profit of $653 million on revenue of $6.7 billion, compared with $725 million in profit on $6.3 billion in revenue the same period last year. The studio arm of the company has seen strong results this quarter for “Hangover Part II,” which has grossed more than $200 million.
And next month, the company will release “Harry Potter and the Deathly Hallows Part II,” the final film in its high-grossing Harry Potter series.