DreamWorks Animation will bolster its programming line-up between cinema releases with television series and Broadway theatre productions as entertainment companies prepare to protect profits amid a weak outlook for consumer spending in 2009.
The studio, renowned for the blockbuster Shrek franchise, historically relies on two new feature film releases annually, but next year, it is planning only one release, Monsters vs Aliens , its first 3D film.
DreamWorks Animation is betting big on 3D films, which could boost its profits by as much as 30 per cent in the coming years, according to executives, as the US economic recession takes its toll on the industry.
Even without the new technology, the industry has fared relatively well this year. "Movies [theatrical revenue] will be up slightly over 2007, just under $10bn and admissions will be flat or just a hair down," Jeffrey Katzenberg, chief executive of DreamWorks Animation, said in an interview. "Other than Wal-Mart and McDonald's, I don't know how many others can say that."
Meanwhile, DreamWorks has developed a television series based on its Madagascar franchise as well as a pilot based on this year's Kung Fu Panda for Viacom's Nickelodeon kids cable network and specials for network TV stations NBC and Walt Disney's ABC.
A Broadway theatre production, Shrek the Musical , is set to open this Sunday in the US and the studio is considering developing more travelling theatre companies to produce the show in the next two years, as well as create more new productions based on its films.
Combined television projects are seen generating $40m to $60m in annual incremental revenue and up to $30m more in gross profit, executives told analysts yesterday.
Theatre productions could bring in an additional $100m to $150m and $30m to $50m in gross profits as early as 2010, Ann Daly, chief operating officer of DreamWorks Animation, told analysts at a presentation. Executives said it had relied less on home video profits, which have been endangered by a maturing market and small contribution from Blu-ray discs across the industry.
It currently generates 40 per cent of gross profit, down from 55 per cent of profits from DVDs as revenue from international box offices and television projects have increased .
It also confirmed it will release a sequel to this year's Madagascar: Escape 2 Africa by 2012.
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