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DreamWorks Profit Up, but Katzenberg Notes DVD Concerns

24 Feb, 2011 By: Chris Tribbey

Megamind


DreamWorks Animation CEO Jeffrey Katzenberg had mixed news while discussing his company’s fourth-quarter financial results Feb. 24.

“We had mixed results in the home video market. [Our titles] performed very differently, which we think is indicative of the overall strength and weaknesses of the home video market,” he said during a conference call with investors. “Shrek Forever After did not perform at the same level we’ve expected from comparable DreamWorks Animation titles, including previous “Shrek” titles.

“The box office success is no longer indicative of home video success, as it has been historically.”

Shrek Forever After earned $238 million at the domestic box office, with 7.2 million DVD and Blu-ray Disc units sold by the end of the quarter, Dec. 31. Katzenberg said competition from other titles and the fact the title was a sequel contributed to underwhelming home entertainment sales. Overall Shrek Forever After contributed $72.2 million in revenue during the quarter

“On the other hand, even in a tough home entertainment environment, How to Train Your Dragon performed very well in both domestic and international markets,” Katzenberg said. “Dragon and a few other family titles released during the quarter proved there’s still an appetite for high-quality content in home video.”

How to Train Your Dragon had sold more than 7.5 million home video units by the end of the quarter, and contributed $80.3 million in revenue. It pulled in $217 million at the domestic box office. Company COO Ann Daly said the home video results for Dragon were better than that for Monsters vs. Aliens, a surprise for the company.

Overall the news was good for DreamWorks Animation, which reported a fourth-quarter profit of $85.2 million on revenue of $275.7 million, up from $43.6 million and $194.2 million, respectively, during the same quarter in 2009.

The November theatrical release of Megamind contributed $26.6 million during the quarter, mostly thanks to consumer products.

“In 2010, DreamWorks Animation became the first studio to release three feature-length CG animated films in a single year,” Katzenberg said. “How to Train Your Dragon, Shrek Forever After and Megamind together grossed approximately $1.6 billion worldwide — the company’s biggest year ever at the box office."

Monsters vs. Aliens contributed $6 million in revenue during the quarter, with roughly 9 million units sold by the end of the year. Kung Fu Panda contributed $23.4 million in revenue, primarily thanks to international and domestic television fees.

Library titles contributed roughly $67.2 million.

For the year, DreamWorks Animation reported a profit of $170.6 million on revenue of $784.8 million, up from $151 million and $725.2 million, respectively, for 2009. That was despite Megamind underperforming at the box office ($148 million domestic).

“It was a challenging year for us, and I think we learned a lot from it,” Katzenberg said.
 


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