If there was any sign about how serious Universal is about its animation slate, it was two weeks ago at CinemaCon, when the studio devoted half of its nearly two-hour presentation to Chris Melendandri and his Illumination Entertainment label’s upcoming projects including The Secret Life of Pets, Sing, The Grinch, Despicable Me 3 and a short Mower Minions.
Comcast adding DreamWorks Animation into its mix to the tune of $3.8B is going to make the conglom’s stake in the animation sector even more serious. While that’s an understatement as Wall Street analysts marvel about the potential synergies for DWA at Uni in regards to theme park attractions (Uni already licenses DreamWorks’ Shrek and Illumination’s Despicable Me Minions at its parks), TV and digital products; in order for any of these ancillaries to work, these films have to click at the B.O. or all else is for naught.
Well, Uni has nothing to worry about.
Look at the following: A DWA-Illumination partnership has the proven potential to outstrip Disney’s annual animated slate in any given year.
Last year, between Minions and Home, DWA and Illumination made $1.5B from their animated pics which bests the $1.2B Disney made at the worldwide B.O. from Inside Out, The Good Dinosaur and Strange Magic. In fact, going back to 2010 when Despicable Me was released, both DWA and Illumination’s animated fare combined outstripped the global B.O. made by Disney’s annual slate in five out of the six years, according to our calculations. The most generated box office year from the combination of DWA and Illumination was in 2010 from four titles (How to Train Your Dragon, Shrek Forever After, Despicable Me and Megamind) which grossed $2.1B to Disney’s two —Toy Story 3 and Tangled–which amounted to $1.65B. All of this is according to figures calculated by Deadline.
Such success going forward hinges on DWA and Illumination keeping a steady annual supply of three to four event movies. DWA has Trolls on Nov. 4 via its deal with 20th Century Fox (which it has had since 2013) while Illumination has The Secret Life of Pets on July 8 and Sing on Dec. 21. Altogether between the two labels, four for this year.
In all fairness to Disney, this year to date they’re currently beating DWA respectively with Zootopia at $916M to Kung Fu Panda 3‘s $504M. In addition when it comes to Oscar winners in the bests animated feature category since its inception in 2001, the Mouse House rules with 11 Oscars out of the last 14 years — a testament to the studio’s standard of quality over quantity. Disney has two more toon features left for an annual total of three: Finding Dory on June 17 and Moana on Nov. 23. Since 2010, Disney has averaged two-to-three films per year, except for 2012 when 3D re-issues of Finding Nemo and Beauty and the Beast raised them to seven animated titles that grossed $1.28B. DWA and Illumination still beat them that year with three films grossing $1.4B.
As both Disney has shown with its own animation label and Pixar, and Fox with Blue Sky and DWA, two varied labels can certainly live and profit under the same roof. And with Universal’s marketing muscle — look no further than how they canvassed every billboard, Twinkies and Band-Aids box with Minions — the sky’s the limit.
Also a gain for Uni is
A few more notes to the chart above: There weren’t any Pixar releases in 2014, nor were there any original Disney animated titles in 2015.
DWA’s footprint in the Chinese market, which the Jeffrey Katzenberg-run studio penetrated with the Kung Fu Panda trilogy grossing $272.5M. Earlier this year, the last chapter stood as the country’s highest grossing animated feature ever ($154.3M), but was recently surpassed by Zootopia ($234M). DWA has Oriental DreamWorks, a Shanghai-based joint venture studio with Middle Kingdom-run backers. And in China’s booming theatrical space, that’s a key asset to own particularly as Uni is planning to open an $8B theme park in Beijing, which is set for 2020 to compete with Disney’s $5.5B Shanghai park which is opening its turnstiles in June. Under its distrib deal with Fox, DWA has the rights to release its movies on TV in China.
Of course, production costs are key when it comes to a DWA-Illumination partnership. While Illumination has made its movies for an average price tag of $70M before P&A, DreamWorks’ opulent spending (2014’s $422M marked their second highest budget spend on movies since 2010’s $460M) on both star-driven and offbeat toon product led to staff cuts, a slowdown in their releases and write-downs on Rise Of The Guardians, Turbo and Mr. Peabody And Sherman.
Following the success of Shrek in 2001, DreamWorks made a then unprecedented sequel deal with the pic’s voiceover talent Mike Myers, Eddie Murphy and Cameron Diaz, paying them $5M a piece. This after the trio deferred their salaries on the first installment, ultimately making $3M a piece. Whether such lucrative deals would be commonplace on DWA features going forward in a shared sphere with Illumination is questionable. With a number of titles in development from Captain Underpants to Edgar Wright’s untitled shadows movie, it’s uncertain at this time whether budgets will be lowered on DWA’s fare. The company is too buried currently in the merger regulatory process.
While DWA has a distribution deal with 20th Century Fox through the end of 2017, it’s not an absolute given yet that all DWA product tranfers to Uni effective Jan. 1, 2018. Details are still in flux with Fox having already dated Tim Minchin’s Australian flavored Larrikins on February 2016 and How to Train Your Dragon 3 on June 29. DWA’s deal with Fox was announced in August 2012, replacing the distribution deal it had with Paramount since 2006. At first DWA considered distributing its own films before going with Fox. Under DWA’s agreement, they pay Fox 8% of revenue from B.O. and DVD sales, the same fee that they shelled out to Paramount. One of the perks under that deal was that Fox received a lower fee for digital distribution at 6%, including VOD, digital rental, and electronic sell-through. DWA also retained the right to distribute movies on U.S./Canada TV channels, a source of revenue, a stream they split with Par.
Below is a look at DWA, Illumination Entertainment and Disney’s upcoming animated release schedule:
Kung Fu Panda 3 (DWA via Fox): $504M worldwide
The Secret Life of Pets (Uni/Ill), July 8
Trolls (DWA via Fox) Nov. 4
Sing (Uni/Ill) Dec. 21
Finding Dory June 17
Moana Nov. 23
Boss Baby (DWA via Fox), March 10
Captain Underpants (DWA via Fox) June 2
Despicable Me 3 (Uni/Ill) June 30
The Grinch (Uni/Ill) Nov. 10
The Croods 2 (DWA via Fox) Dec. 22
Cars 3 June 16
Coco Nov. 22
Larrikins (DWA via Fox) Feb. 16
How to Train Your Dragon 3 (DWA via Fox) June 29
Untitled franchise movie (Uni/Ill) July 13
Gigantic, March 9
Toy Story 4 , June 15
Untitled Disney Animation, Nov. 21
Untitled franchise film (Uni/Ill) July 3
Untitled Disneytoon Studios, April 19
The Incredibles 2, June 21
Untitled Disney Animation Nov. 29
Untitled franchises film (Uni/Ill) July 10
Untitled Pixar, March 13
Untitled Pixar, June 19
Untitled Disney Animation, Nov. 25
Edgar Wright’s untitled Shadow project
Bollywood Superstar Monkey (working title)
B.O.O. Bureau of Otherworldly Operations
Puss in Boots 2: Nine Lives & 40 Thieves