Every studio has its ups and downs. The folks at DreamWorks are ready for some ups.

The company will release just six films this year, that so far include no mega-hits and one major animated disappointment: “Sinbad: Legend of the Seven Seas.”

“This is a transitional year for us,” shrugs DreamWorks Pictures honcho Walter Parkes. “It’s a cycle. When you’re busy producing, your development always suffers.”

But there are hints of an up cycle with the 2004 slate of 11 pics and names like Tom Cruise, Tom Hanks, Steven Spielberg, Michael Mann, the “Shakespeare in Love” team of John Madden and Tom Stoppard and an ogre named Shrek (see separate story).

Nine years after opening its doors in 1994, the company’s still trying to get a handle on how to generate a steady flow of product.

While the company aims at eight to 10 pics per year, execs stress that the studio’s business plan has never pressured the film division to meet an annual quota.

But that’s not to say it wants to have another 2003.

“This year we said, OK, let’s batten down the hatches and look for a more constant supply of films,” Parkes says.

DreamWorks plans to more heavily tap into its sources for product: Projects developed internally by Parkes and Laurie MacDonald, other pics shepherded by production prexy Michael DeLuca; DreamWorks Animation; first-look pacts with producers including Spyglass Entertainment; and co-productions with other studios.

“There’s no reason why we shouldn’t be able to have four of those sources represented in a given year,” Parkes says.

Although DreamWorks Animation also saw a reduced output this year, that will expand next year with “Shrek 2” and “Sharkslayer,” as well as animated NBC series “Father of the Pride.” By 2005, it will start distribbing three toons per year.

“This year was always going to be a lower-volume year for us, in order to prepare for the level of production we’re at now,” says DreamWorks Animation topper Ann Daly. “Next year looks to be a much better year for us. We feel so good about the movies we are making now. We’ve got a big future ahead of us.”

Talking to DreamWorks execs is like a chorus of “Home on the Range”: Seldom is a discouraging word heard.

“Studios can overreact when their films don’t work,” DeLuca says. “But the game plan at DreamWorks really works.”

MacDonald agrees: “We don’t want to make a movie before its time. We’ll wait until all the elements are in place. Our development drives our distribution, not the other way around.”

And while other studio honchos say they’ve learned hard lessons from the year — shy away from sequels, don’t hire directors with final cut — the DreamWorks team say they’re not making any serious course corrections internally.

“We can afford to have a thin year. A thin year is preferable to having one filled with big-budget failures,” Parkes says.

Of course, it may be useful for other studios to think about why DreamWorks had a year like ’03.

There are three key reasons the studio doesn’t develop much.

  • First, Parkes and MacDonald are, per their fans, hands-on, if not downright meticulous. Their detractors say they hoard the best projects, leaving little creative control to others.

Over the years, the development of DreamWorks’ pics has rested on their shoulders. But there’s still the question of whether they can serve their functions as studio execs when they’re so busy producing.

Between shepherding five pics in 2001 and producing seven films for 2002 (including “Minority Report” at Fox and “Men in Black II” at Columbia), the duo hadn’t had a lot of time to develop any pics for 2003.

Most of the studio’s low-budget pics this year — “Biker Boyz,” “Head of State” and “Old School” — were produced by DeLuca, one of the few DreamWorks execs to have a title. (In general, DeLuca’s strengths are his relations with talent and his interest in producing lower-budgeted but commercial pics.

  • Second, the studio had planned a series of ancillary deals to augment the Parkes-MacDonald output, but most of those fell through.

For example, former CAA co-chairman Jack Rapke, helmer Robert Zemeckis and Steve Starkey in 1997 signed a five-year overall deal with DreamWorks. The output from that new company, ImageMovers, resulted in two movies, “Cast Away” and “What Lies Beneath” and a number of failed development deals.

  • Aside from filmmaker pacts, the company seems to have given up on some of its creative game plans: In its early days, DreamWorks announced the idea of creating a “family of writers” in which scribes would get gross points. This plan never came to fruition.

When Steven Spielberg, Jeffrey Katzenberg and David Geffen announced the company in October 1994, they promised it would be “a home for talent.” They also promised it would create a physical state-of-the-art studio and that all its films would be unique.

So far, its 1,300 employees are split between a “campus” in Glendale and Amblin’s southwestern stuccoed offices on the Universal Studios lot in Studio City. Its films lense elsewhere.

And creatively, there is no distinctive link between “American Beauty,” “Old School” or “Prince of Egypt” — or to distinguish them from any other studio’s output. DreamWorks’ increasing interest in co-productions help underline that fact.

The company’s 2003 domestic B.O. tally to date is $228.5 million (and that includes receipts collected from last year’s hit “Catch Me If You Can”). “Sinbad,” with a budget of $60 million, was its only summer offering; it generated $26 million in domestic coin.

This year may not be a total writeoff, however.

“Old School” collected $76 million domestically; the other pics so far may have been misses, but they weren’t flops.

The studio says it will end up breaking even on the Chris Rock pic “Head of State,” which was produced for $35 million and generated $38 million in domestic ticket sales.

There are still two more releases to go, Woody Allen’s “Anything Else” and the year-end “House of Sand and Fog.” (In addition, DreamWorks will distrib “Millennium Actress” this year through its new niche banner, Go Fish).

The execs say a big output is not a top priority — and apparently major investors like Paul Allen accept that mandate.

Instead, the key considerations are storytelling and keeping firm control over development. The studio says it won’t greenlight a film until it has all the elements in place.

The honchos aver that DreamWorks could have had “Terminal” and “Collateral” ready for 2003, but they wouldn’t have starred Hanks or Cruise. Mimi Leder and Gore Verbinski had previously been attached to helm the latter project before Mann. “The Lookout” also has been in active development since 2000.

“That’s the difference,” DeLuca says. “At other studios you can get movies made faster, but at DreamWorks we like to get who we want and make the movies we want to make.”

Only the animation division is showing any signs of change.

“Sinbad” may be the last animated film DreamWorks will produce for years that targets young males. Nearly all of its future animated releases revolve around the adventures of cute talking animals.

And the company will no longer make a traditionally animated toon — every one of DreamWorks’ animated pics in development is CGI, rather than hand-drawn. “Sinbad” was the last.

“We made a change from 2-D to 3-D a couple of years ago with our selection of movies we planned for release in 2004 and 2005,” Daly says, attributing the switchover to changing consumer tastes and the new creative opportunities 3-D offers. “Shrek 2” has been in production since 2000, while “Sharkslayer” started in 2001.

Company has spent the last 18 months training more than 200 artists in how to create 3-D-animated toons, with many doing so for the first time.

“There was a tremendous amount of trepidation on the part of the artists and myself,” Daly says. “This has never been done before. But it’s working out.”

DreamWorks’ slate this year boasts only six releases, but it’s also a co-producer on Universal’s “Seabiscuit” and “The Cat in the Hat” and Paramount’s “Paycheck.”

It has two pics upcoming in 2003: the Woody Allen comedy “Anything Else” and the drama “House of Sand and Fog.”

Next year will be more chock-a-block. Among the 2004 projects:

  • The first few months of the year feature the low-budget comedies “Win a Date With Tad Hamilton,” Will Ferrell’s “Anchor Man: The Legend of Ron Burgundy,” the Ben Stiller-Jack Black comedy “Envy” and “The Ugly Americans” (whose name will change).

  • The company will have two animated pics: “Shrek 2,” a summer sequel to the 2001 juggernaut, and the October bow of the animated underwater mob comedy “Sharkslayer,” with the voices of Will Smith, Robert DeNiro, Renee Zellweger and Angelina Jolie. The title will change. Pic was originally skedded for a November release, but would have competed against Pixar and Disney’s “The Incredibles.”

  • Also in the summer will be the Steven Spielberg-helmed airport comedy “Terminal,” starring Tom Hanks and Catherine Zeta-Jones; and the Michael Mann thriller “Collateral,” with Tom Cruise as a hitman.

  • Later in the year, “The Ring 2”; the Ben Affleck comedy “Surviving Christmas”; and “Tulip Fever,” a John Madden-helmed romancer starring Jude Law and Keira Knightley that’s set around Holland’s tulip trade during the 17th century. Miramax is co-producing.

  • Also on the roster are two Par co-productions: “Lemony Snicket: A Series of Unfortunate Events,” an adaptation of the popular children’s book with Jim Carrey toplining and “The Stepford Wives,” starring Nicole Kidman.

Looking ahead to 2005, the studio is readying its first musical, an adaptation of Sondheim’s “Sweeney Todd”; the David Benioff-scripted actioner “Alpha” and David Fincher-helmed heist thriller “The Lookout”; sequels to “Gladiator” and “Old School”; remakes of “Ikiru,” “The Party” and the Korean horror pic “A Tale of Two Sisters”; and the comedies “Date School” and “Dinner with Schmucks.”

It will also co-produce Cameron Crowe’s “Elizabethtown” with Par and U’s “Meet the Fokkers,” a sequel to “Meet the Parents.”

In 2005, DreamWorks Animation offers up “Madagascar” and “Over the Hedge,” while also distribbing Aardman Animation’s “The Wallace and Gromit Movie.”

And together with U, DreamWorks is co-producing Baz Luhrmann’s “Alexander the Great,” with Dino and Martha De Laurentiis.