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DreamWorks Animation sees Q1 lift from ‘Puss’

Revenue, profits rise as toon gets o'seas boost

DreamWorks Animation plans to decide whether it will reup its relationship with Paramount Pictures, pair up with another studio or start self-distributing its films by Labor Day, toon studio chief Jeffrey Katzenberg told analysts Wednesday.

Discussions will begin after “Madagascar 3: Europe’s Most Wanted” bows June 8 and plays out of competition at the Cannes Film Festival.

“All options” are still on the table, Katzenberg told analysts while discussing the company’s first quarter earnings. Last year, it tapped Disney vet Chuck Viane to help the company consider the costs of getting into the distribution game. “That option is something we’re fully exploring and taking a look at,” Katzenberg said.

Much attention has surrounded the kind of distribution fees Katzenberg is looking to land from a studio partner — it currently pays Par 8% of revenue, a figure the studio wants upped.

But Katzenberg stressed that the “value of the deal shouldn’t and cannot be based on what the distribution fee is,” citing other revenue-generating opportunities through consumer products, theme parks and other ventures. “The fee doesn’t get you to the bottomline.”

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In discussing DWA’s latest results, the company finally had a quarter to be upbeat about as profits rose during the first three months of the year, boosted by the success of “Puss In Boots.”

The toon studio reported a 26% rise in revenue of $136 million, that helped increase first quarter profits to $9.1 million, up from $8.8 million during the same frame last year.

That’s an improvement over back-to-back quarters of declining profits — down 51% in the third quarter last year, and a steep 71.5% in the fourth. Revenue also has declined the last two quarters.

Puss In Boots” generated $73.6 million during the quarter, primarily from homevid sales and international box office. Film has earned $554 million at the worldwide box office, since its October release.

On homevid, the “Shrek” spinoff has sold 3.8 million units through the quarter, with 1 million of those coming from digital transactions during the first four weeks. An estimated 20% of those came from online VOD and digital sales.

Homevid also helped “Kung Fu Panda 2” earn $14.1 million, which has moved 5.5 million units to date. Meanwhile, “Megamind” generated $5 million during the quarter from international pay TV and homevid. “Shrek Forever After” contributed $2.5 million and has sold 10 million units on homevid.

DWA’s library of pics, which now includes’ “How to Train Your Dragon,” earned $27 million, while its non-film businesses collected $13.5 million, mostly from “Shrek the Musical,” that earned $6 million.

After “Madagascar 3,” DWA has “Rise of the Guardians” out in November — the first of five original films DWA will release over the next two years. They include “The Croods,” “Me and My Shadow,” “Turbo” and “Peabody and Sherman,” which Katzenberg see as “new franchise properties for the company” in a market that the exec called “pretty attractive” for family fare given the lack of titles. However, he cautioned that “what defines a family film, I don’t know anymore. Last Memorial Day, ‘The Hangover 2’ became a family film.”

Both “Madagascar 3” and “Guardians” cost $145 million to produce, around 15% more than other toons from the company.

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