The DreamWorks Animation chief sounded like he’d prefer to have a root canal than talk to analysts about how his studio hopes to avoid another failure like Mr. Peabody & Sherman — which just resulted in a $57M write-down for Q1. Three of the studio’s past four films failed to deliver, Jeffrey Katzenberg noted, which he blamed on “inconsistent execution” and other factors tied to marketing and scheduling.
As the market for kids’ films becomes more competitive, “we have to focus on the creative side of the business” to find “ideas that have the broadest global appeal” and stand out as must-see experiences. “Playability honestly is just not enough today. … We feel a different level of criteria in terms of the ideas we’re picking and the marketing of the ideas.” He’s hot on sequels and says DWA has more in the pipeline than ever, with plans to release at least one a year.
As for nonsequels, “we are triple looking at them for big concepts. … They have to check off a lot more boxes than they did in the past.” Next year’s BOO: Bureau of Otherworldly Operations qualifies with its “big visuals, kind of a Ghostbuster-ish idea. … It feels like a very big idea, a very marketable idea.”
Peabody & Sherman cost $145M, but DWA assured analysts that upcoming films beginning this November with Home will cost $125M or less — not including “incentive-based compensation” (look out). With $261M from worldwide box offices, including $108M domestically, Peabody & Sherman pretty much matched Turbo. It had a “materially larger” impairment charge, President Lew Coleman says, because it cost more to make and Turbo benefited from more sales of licensed merchandise. But Katzenberg says that distributor Fox doesn’t have to worry. “They will be fully recouped.”