Dreamworks has been releasing a ton of movies lately. They even claimed a first last year by releasing 3 CG animated titles in a single year. But now the company is having second thoughts on keeping up such a hectic pace.
What will be the result of such a strategy? Will Dreamworks decide to go for more inexpensive ventures? Would there be an increase or decrease in sequels or originals? Will there be a harder push towards more cross-platform media? It seems that only time will tell.
Goodness sakes, all that money and JK clearly still has Disney issues. And Megamind was “a disappointment at the box office”? Hogwash! By year-end, it had done $144 million in North American business, and it has more than doubled its cost with the international receipts factored in.
As a guess, this might alter the fate of all those sequels that were discussed a couple months ago. Maybe two or three instead of six would be judicious.
It’s no surprise that even a cash generator like DWA has to tighten its belt, though. The business of animation might hold little interest for some folks, but ultimately it’s a make-or-break factor that determines what shows up (or not) in theatres.
I’m wondering what this means for the films on the slate that have yet to be officially announced.
Hollywood accounting is weird. 144 million seems like a lot but once you factor in pre-production, development, exhibition fees and marketing you may understand why it might still be in the red for DWA. Though I’m not sure how exactly H’Wood accounting works, by some estimates even some huge blockbusters like Burton’s Batman weren’t in the black until years after their release.
For some reason the town still has yet to learn its lesson and will sink millions of dollars into stuff that shouldn’t cost millions of dollars. I’m all for merit and such, but there’s nothing that the talent does that’s harder or more important than what tech and crew does that’s worth more than 6 figures. It’s ridiculous.
aerostarmonk: You’re right to mention the labyrinthine unreality of Hollywood Accounting, which was the first thing that came to mind upon reading that article. But it does mention box-office, not profit, as the disappointing figure. In general, there’s the “double” rule of thumb that says a film needs to generate twice its production budget in box-office receipts to recover all the costs of promotion, etc. as you mentioned.
So basically Megamind covered its $130 million cost plus $14 million domestically, and the $170 million in international receipts should put it in the black…but not until 2011 on the books. The article notes revenue from Monsters vs. Aliens, a 2009 carry-over; so it might have mentioned that Megamind, a late-in-the-year release, should have a goodly chunk of its revenue reported after the December 31 cut-off. There’s weirdness in the international distribution stuff, too, so not all of the foreign box-office haul is gravy. But it’s tough to see how the box-office figures could be called disappointing unless the reporter was expecting $200M+ domestic, which is probably unrealistic for DWA’s third release of the year.
So maybe it’s a lesson in word choice and objective reporting. If the article’s author had shed more light on the basis for the “disappointing” remark, it might have been a different story.
But back to the main point–like you, I wonder what it means for DreamWorks’ non-sequel slate, which holds much more interest. It’s encouraging that The Croods and The Guardians are still green for go. Maybe moviegoers’ “sequel fatigue” is part of the re-think. Shrek and Madagascar have both gone down in their ratios of the films’ costs versus box-office performance. This is in contrast to Blue Sky’s Ice Age movies, for which the same ratio has gone up, probably because they’ve kept production costs relatively low.
You mention the costs of talent, and that’s another interesting area. It could be that the price of pop celebrity voices bumps the budget up when it comes time to negotiate for the sequels. If memory serves, Cameron Diaz did quite well on the Shrek sequels. No doubt Mike Myers and Eddie Murphy made out well, too. It all adds up!
Thanks for your insights, aerostarmonk. It’s fun to slosh these thoughts around, including the otherwise ho-hum accounting stuff.
There was a reason why Michael Eisner didn’t want Jeffrey running the everything. I guess this and that Shrek 2 DVD release are some of the reasons why.