Studio avoids 3-D competition with later release
Looking to get out of the way of 3-D competition, DreamWorks Animation is pushing back the release date of “How to Train Your Dragon” from November 2009 to March 2010.
News came as DreamWorks Animation reported a $94.1 million fourth quarter profit on revenue of $290.2 million, due primarily to “Shrek the Third” DVD sales.
Studio, which will start releasing all its films in digital 3-D next year, moved “Dragon” because it was close to Fox’s “Avatar” and Disney’s “A Christmas Carol”; together, those pics will be taking up the limited number of 3-D screens.
It’s the second DreamWorks toon to be moved because of “Avatar.” Previously, 2009’s “Monsters vs. Aliens” was moved from May to March, before Fox delayed “Avatar” to December.
DreamWorks Animation topper Jeffrey Katzenberg admitted Tuesday that he considered putting “Monsters” back in May after the shift but decided to stay with March for other reasons.
“The international marketplace is also a big consideration for us in terms of the other 3-D releases already in place for summer 2009,” he explained.
Shift means that DreamWorks Animation will have three releases in 2010, with “Shrek Goes Forth” set for May and the Ben Stiller-produced “Masterminds” coming out that November. But in 2009, the studio will have only one release, with a yearlong drought between “Monsters” and “Dragon.”
During the quarter, “Shrek the Third” sold 15.6 million units and generated $179.4 million in revenue — very healthy but far behind the homevideo perf of “Shrek 2,” which generated $360 million on 34 million units.
Katzenberg attributed the weaker results to the general slowdown in the DVD market, the glut of high-profile releases such as “Spider-Man 3,” the third “Pirates of the Caribbean” pic and “Transformers,” as well as increased competition from videogames.
“Bee Movie” hasn’t yet generated any revenue for the company following a so-so box office perf of $126 million domestic and $159 million overseas. However, DreamWorks said the film was likely to end up being profitable after its homevid release.
That’s partly attributable to a higher than average payment for TV rights, which Katzenberg said came thanks to star Jerry Seinfeld’s stature on the tube, as well as payments from Toshiba for the company’s allegiance to HD DVD.
Execs declined to confirm the widely reported $100 million payment that DreamWorks Animation received from Toshiba to ally itself with HD DVD last summer, though Katzenberg did grant that “we have been well compensated for our support.”
Now that Toshiba has given up on the format, it’s not clear when and whether DreamWorks Animation will make the switch to Blu-ray. Katzenberg said he is still waiting to talk with Toshiba execs about whether they expect his studio to release “Bee Movie” on HD DVD; the pic hits the homevideo market March 11. But he did confirm that the demise of the format won’t impact Toshiba’s payments to DWA.
“We made a deal,” he said. “They honored the deal, and we have honored it.”
Other major contributing factors to DreamWorks Animation’s bottom line included the ABC special “Shrek the Halls,” which brought in about half of the studio’s $63.8 million earned from library and “other” titles.
Additional revenue for the quarter was driven by the company’s 2006 hit, “Over the Hedge,” which contributed about $13.4 million for the quarter, primarily from international pay TV as well as its catalog performance in the homevideo market. Through the end of 2007, “Over the Hedge” had reached an estimated 15 million units shipped on a worldwide basis given actual returns and estimated future returns.
“Flushed Away” added $8.1 million in revenue. “Madagascar” added $24 million, due primarily to domestic broadcast TV rights, and “Wallace and Gromit” made just $1.5 million.
Main revenue driver for this year will be “Kung Fu Panda,” which bows in May. Many industryites are expecting it to do especially well with licensed products on top of its B.O. perf. A sequel to “Madagascar” will be released in November.
DreamWorks Animation stock closed up 2% at $24.44 before earnings were announced Tuesday. Investors seemed generally pleased with the earnings report, as the stock was up 5% in after-hours trading.