Dreamworks Animation Hoping to Mine ‘Madagascar’ TV Success on DVD

The Penguins of Madagascar Operation: DVD Premiere

By : Erik Gruenwedel | Posted: 09 Feb 2010
egruenwedel@questex.com

Dreamworks Animation (DWA) is expected to grease its bottom line with today’s retail release (Feb. 9) of The Penguins of Madagascar Operation: DVD Premiere, as the studio earmarks a third Madagascar theatrical release in 2012, an analyst said.

Specifically, Dreamworks Animation is greenlighting TV series based on its lucrative films as a means to maintain consumer awareness in the franchise and mine incremental revenue, according to Pali Capital analyst Richard Greenfield.

Madagascar (2005) and Madagascar: Escape 2 Africa (2008) generated nearly $374 million in combined domestic box office and represented two of the studio’s more successful packaged media releases.

Indeed, last winter DWA bowed a DVD release of Merry Madagascar, the day after its NBC airing.

“The Penguins of Madagascar” TV show was originally produced as a 26-episode series for Nickelodeon, which promptly upped its order to 52 episodes before the first airing, Greenfield said.

He said a second season, in addition to a TV series based on 2008 theatrical hit, Kung Fu Panda ($215 million domestic box office), is slated to air later this year.

The Penguins DVD, which is distributed by Paramount Home Entertainment, includes nine episodes from the current TV season and two from the original, carries a $26.99 SRP but is available at Amazon, Wal-Mart, Best Buy and Target from $11.86.

The disc is being co-marketed by McDonalds through its Happy Meal and related toy program.

With the success of the TV series, which is also broadcast in 60 countries, Greenfield said DWA is expecting strong sales for the DVD, whose profits the studio splits with Nickelodeon.

“DWA’s ability to monetize Penguins on DVD will be an important data point as we look to model earnings in 2011 and beyond,” Greenfield wrote in a note.

Separately, the analyst said DVD profit from the uncensored Feb. 23 release of MTV reality series “Jersey Shore” ($21.95 SRP) should positively impact the cable network’s first-quarter operating income.