Comcast 2014 Annual Report Download - page 72

Table of Contents
Home entertainment revenue decreased in 2014 primarily due to the strong performance of our 2013 releases, including
Despicable Me 2 and Fast and Furious 6
. Home entertainment revenue remained flat in 2013 primarily due to a decrease in the
number of releases in 2013 compared to 2012 offset by the strong performance of Despicable Me 2 and Fast and Furious 6.
The overall DVD market continues to experience declines due to the maturation of the standard-
definition DVD format, piracy, and
increasing shifts in consumer behavior toward digital distributors, and subscription rental services, all of which generate less
revenue per transaction than DVD sales.
Other
We also generate revenue from producing and licensing live stage plays, from distributing filmed entertainment produced by third
parties and from a movie ticketing and entertainment business.
Other revenue increased in 2014 primarily due to the inclusion of Fandango in 2014, which was previously presented in our Cable
Networks segment. Other revenue increased slightly in 2013 primarily due to an increase in revenue generated from our stage
plays.
Filmed Entertainment Segment – Operating Costs and Expenses
Programming and Production Costs
Programming and production costs include the amortization of capitalized film production and acquisition costs, residual and
participation payments, and distribution expenses. Residual payments represent amounts payable to certain of our employees,
including freelance and temporary employees, who are represented by labor unions or guilds and are based on post-
theatrical
revenue. Participation payments are primarily based on film performance and represent contingent consideration payable to
creative talent, third parties that have entered into cofinancing agreements with us and other parties involved in the production of a
film.
Programming and production costs decreased in 2014 and 2013 primarily due to lower amortization of film costs associated with
the lower costs of our 2014 and 2013 film slates compared to their respective prior years.
Other Operating and Administrative Costs and Expenses
Other operating and administrative costs and expenses include salaries, employee benefits, rent and other overhead expenses.
Other operating and administrative expenses increased in 2014 primarily due to the inclusion of Fandango in 2014, which was
previously presented in our Cable Networks segment. Other operating and administrative expenses increased in 2013 primarily due
to the realization of a receivable in 2012 that was previously reserved for as uncollectible.
Advertising, Marketing and Promotion Expenses
Advertising, marketing and promotion expenses consist primarily of expenses associated with advertising for our theatrical releases
and the marketing of DVDs. We incur significant marketing expenses before and throughout the release of a film in movie theaters.
As a result, we typically incur losses on a film prior to and during the film’
s exhibition in movie theaters and may not realize profits, if
any, until the film generates home entertainment and content licensing revenue. The costs associated with producing and
marketing films have generally increased in recent years and may continue to increase in the future.
Advertising, marketing and promotion expenses decreased in 2014 and 2013 primarily due to fewer significant theatrical releases
compared to their respective prior years.
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Comcast 2014 Annual Report on Form 10
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