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DreamWorks SKG Re-Ups Universal Distribution Through 2010

12 Nov, 2003 By: Erik Gruenwedel

Vivendi Universal Entertainment's (VUE) announcement that it has extended through Oct. 2010 an exclusive worldwide distribution deal for all DreamWorks SKG theatrical and home video product means more than window dressing to distribution arm Universal Studios Home Video (USHV).

Originally formed in 1995, and extended in 2001 through 2006, failure by VUE to secure the distribution deal until the end of the decade with DreamWorks could have been costly to USHV.

DreamWorks product accounted for more than 26 percent ($36.4 million) of VUE's 2002 combined U.S. rental revenue of $1.4 billion and slightly less than 26 percent ($33.8 million) of its $1.3 billion home video sales, according to Video Store Magazine market research.

Recent DreamWorks home video releases include Minority Report, Road to Perdition, The Ring, Shrek, Almost Famous, The Contender and American Beauty.

Ron Meyer, president and CFO of VUE, characterized the partnership with DreamWorks, which included theatrical co-productions of Gladiator, A Beautiful Mind, Seabiscuit and next month's Dr. Seuss The Cat in the Hat, as a “tremendous mutual success.”

A VUE spokesperson, who would not disclose financial terms of the agreement, denied DreamWorks was shopping future distribution pacts elsewhere and said the extension created a sense of “continuity” between the two companies.

“I don't think that was ever in question,” said the spokesperson. “It was a matter of making sure that all the people [and] deals we really value remain in place.”

A DreamWorks representative declined comment.

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