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‘Shrek Forever’ & ‘Dragon’ Sell Combined 10 Million Holiday Discs

13 Jan, 2011 By: Erik Gruenwedel

DreamWorks Animation’s hits Shrek Forever After and How to Train Your Dragon sold more than 10 million combined discs during the Christmas shopping season, CEO Jeffrey Katzenberg disclosed in a recent interview with CNBC.

Both titles are distributed by Paramount Home Entertainment.

The tally, while impressive in the changing home entertainment market, brought mixed reaction from one analyst who revised downward overall physical media revenue projections for the movies.

Ralph Schackart with William Blair & Co. in Chicago said the unit sales did not bode well for previous projections of 28 million discs sold overall. He lowered his previous estimate to 24 million units.

“Given that the first few months of sale for discs generate a disproportionate amount of unit sales, we believe our combined unit estimate is high and we are lowering it,” Schackart wrote in a note.

Michael Pachter with Wedbush Securities in Los Angeles was more forgiving, focusing his concern on underperforming DWA theatrical release Megamind. The analyst said the movie suffered from poor reviews, no prequel to entice viewers, and a mix of human and alien characters. He lowered the film’s domestic box office estimate to $145 million from $176 million.

Regardless, Katzenberg remained upbeat on home entertainment, saying the studio’s discs are analogous to toys, in that they are primarily purchased parents and played for their children repeatedly.

“We are a hard goods business,” Katzenberg told CNBC during the Consumer Electronics Show in Las Vegas. “[Disc] sales are down from what they were three years ago, [but] what is not down from three years ago?”


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