It’s no secret that DreamWorks SKG, the new multimedia company formed by Steven Spielberg, Jeffrey Katzenberg and David Geffen, has been looking at several possible investors and business partners for their new multimedia studio.
One likely candidate emerged last week as executives from Korean conglomerate Samsung were spotted entering DreamWorks’ temporary offices at Spielberg’s Amblin Entertainment offices – based on the Universal Pictures lot. While DreamWorks declined comment, as did Samsung, sources later confirmed that Samsung representatives met with the DreamWorks team, along with agents from International Creative Management, who also declined comment.
Meanwhile, information obtained by Variety last week revealed DreamWorks’ ambitious blueprint for building a multimedia studio, with investment plans and profit estimates reaching into the next century.
Indeed, what the Samsung execs probably learned was that DreamWorks aims to release three animated films and 24 live-action feature films by the year 2000. Once it has set up offices, DreamWorks plans to eventually employ as many as 500 people, with corporate salaries and general administration costing $40 million.
The company’s plan projects that by 2003, its estimated earnings before interest payments, taxes and depreciation will be $665 million. By that time, the DreamWorks SKG Studio is planning to expand into TV animation, publishing, interactive movies, themed location-based entertainment, live entertainment and theater and merchandising.
The DreamWorks plan elaborates on its goals in five areas: live-action feature films, animation, music, television and interactive software.
Here’s the breakdown:
*Live-action feature film: With Spielberg guiding DreamWorks’ efforts, the new studio’s release schedule calls for three films in 1996, five in 1997, seven in 1998 and nine annually beyond 1999. The trio is estimating an investment of $800 million before the films begin generating net cash at the turn of the century.
Sources also say that the troika will continue to look to Amblin Entertainment president Walter Parkes and exec VP Laurie MacDonald to oversee film. Several producers and filmmakers are said to have been in talks with the company, including producer Denise Di Novi, who would not comment last week.
* Animation: DreamWorks is engaged in a talent hunt for animators and hopes to release its first animated feature by Christmas 1998, with one every year by 2000. The plan is said to call for an investment of $200 million, with animated features generating a profitable cash flow by 2003. Katzenberg is heading the animation effort. Sources said the company has plans to do its first major animated film, based on “The Ten Commandments.”
* Music: Headed by David Geffen, DreamWorks is ready to sink $25 million into its independent music label, although advances from a distribution deal could lower that number.
Sources say DreamWorks is close to a distribution deal with Geffen Records. Geffen’s contract with the label he founded 15 years ago (and sold to MCA) expires in April, but a DreamWorks/Geffen deal would keep the relationship alive.
DreamWorks predicts its music business will produce profitable cash flow by 1996.
* Television: DreamWorks has its joint venture with Capital Cities/ABC, sharing equally in capital, revenue and expenses. The joint venture is putting up $190 million and, according to the company’s plan, it hopes to air five primetime series and four firstrun syndicated shows by 2002. Rather than pursue the hour-long series, as Spielberg has done in the past, DreamWorks will emphasize half-hour sitcoms.
Speculation also persists that Robert Jacquemin – the former head of Disney’s domestic distribution wing, Buena Vista TV – will eventually land at DreamWorks in connection with the company’s TV operations. Both Jacquemin, currently working as a syndication consultant, and Katzenberg have remained mum regarding such a move, with several TV veterans having been mentioned as candidates for the post.
* Interactive: To develop interactive games and software, DreamWorks has said it will either purchase an existing company, set up a joint venture with an established player or create a new company.
One likely candidate for purchase or joint venture by DreamWorks is Knowledge Adventure, a California software company that produces children’s interactive titles, in which Spielberg is already an investor.
DreamWorks is estimating a $75 million outlay for its interactive ventures, but like other entrants in the new and volatile interactive business, the company is not predicting when or how profits would be returned.
Whether Samsung turns out to be a partner in DreamWorks remains to be seen. One delicate area may be DreamWorks’ affiliation with Matsushita, parent company of Universal/MCA as well as Amblin and Geffen Records. The historical enmity between Korea and Japan is well known, as is the intense competition in the consumer electronics arena between Korea’s Samsung and Japan’s Matsushita.
Samsung – with more than $16 billion in annual sales – has a division in Seoul called Dreambox, which includes all film-related businesses, including ancillaries such as homevideo. Samsung is also the sole supplier of programming for CATV, Korea’s only pay TV channel.
Adam Sandler and Brian Lowry in Los Angeles and Gwen Robinson in Tokyo contributed to this report.