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DreamWorks Animation Sees $100m Revenue This Year From Netflix, Other TV Deals

CEO Katzenberg projects a 'steady state' of $200 million in TV revenue by 2015

DreamWorks Animation said it expects to generate $100 million in revenue in 2013 from its TV portfolio, including from new licensing deals for TV content with Netflix and German broadcaster Super RTL, with topper Jeffrey Katzenberg projecting a “steady state” of $200 million annually from television biz by 2015.

DWA plans to produce nearly 1,200 new TV series episodes over next five years based on its box-office franchises, future films and characters from the Classic Media library, which DreamWorks Animation acquired last year, Katzenberg said on a conference call with Wall Street analysts Tuesday.

“Television is a transformative line of business,” he said, adding that subsequent licensing deals with international networks “will give us a significant footprint across the global TV landscape.”

About $50 million of DWA’s 2013 TV revenue will be generated by Classic Media, which includes such properties as “Archie,” “Fat Albert,” “Rocky and Bullwinkle” and “The Lone Ranger.”

The total $100 million for the year includes DWA’s existing TV series licensed to Viacom’s Nickelodeon, including “Kung Fu Panda,” “Penguins of Madagascar” and “Monsters vs. Aliens,” as well as “DreamWorks Dragons” to Turner Broadcasting’s Cartoon Network. Also in that figure is revenue from DWA-owned holiday specials, such as “Frosty the Snowman.”

Asked how much the Netflix deal represents of DWA’s TV revenue, Katzenberg said it will at least double the size of the  television business and will allow the unit to operate at a very high margin. The TV business will have gross profit margins around 30%, which is close to what DWA has for its feature film business, he said.

In 2012, DreamWorks Animation reported total revenue of $749.8 million and a net loss of $36.4 million. Company’s earnings statements report consolidated revenue for film and TV lines of business.

Among DreamWorks Animation’s next new TV titles will be a show based on animated film “Turbo,” skedded for July 17 release. Other DWA properties include Shrek, Madagascar and Kung Fu Panda; the company hasn’t disclosed details of additional shows it plans to produce in the future.

On Monday, DWA announced a multiyear pact with Netflix, which has ordered more than 300 hours of new programming based on the studio’s box-office franchises. Under the deal, Netflix will have exclusive rights to DWA series in the subscription TV window in the 40 markets it operates.

DreamWorks Animation earlier Tuesday announced a five-year output deal with Super RTL, a kids’ broadcast network based in Cologne, Germany, which commences September 2013. That deal encompasses more than 1,100 episodes of half-hour programming and will include the new TV series covered in the Netflix agreement. In addition, Super RTL will gain access to the Classic Media library, which spans animation properties over the last 50 years.

Katzenberg said the TV business revenue estimates do not include the “substantial benefit” new television series will have on  DWA’s products business and the long-term value of that library content.

In addition, Katzenberg called out a second area of potential upside through acquisition of AwesomenessTV, a YouTube content provider. Since DWA acquired AwesomenessTV about 60 days ago, the youth-skewing content provider has boosted YouTube subscribers 40%, from 14 million to 20 million, and boosted total video views 43% from 800 million to 1.1 billion over six weeks.

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