With zero fanfare today, execs for DreamWorks Animation and its new distributor Twentieth Century Fox announced DWA’s 2013-2016 slate which includes 12 CG animated films in 4 years. That, the execs say, is a major industry first. What they’re not saying is that it also seems like a desperation move for this public company. Wall Street is, to put it generously, skeptical about DreamWorks Animation’s prospects. Of the 13 analysts who follow the company according to Thomson/First Call data, only one has a “buy” recommendation. Seven rate it a “hold”. And five designate it either “underperform” or “sell”. The stock is up 5.8% so far this year but that’s lousy since NASDAQ where DWA trades is up 20.4%. And over the last 12 months DreamWorks Animation is down 5.4% while NASDAQ is up 27.1%.
The basic problem for DreamWorks is that its business model appears to be crumbling. One major concern is that Jeffrey Katzenberg‘s formula of making parodies of movie genres as well as sequel after spinoff has run its course – and the new slate looks like more of the same. (As opposed to Pixar’s boundless creativity.) Competition is growing in computer animation not just from Pixar but from Illumination Entertainment and Blue Sky Studios and so on. DVD sales for family fare are declining at an alarming pace. 3D didn’t live up to anyone’s expectations even though Katzenberg negotiated with exhibitors for its exorbitant pricetag. (Yes, consumers, he’s to blame.) Production costs keep rising. Merchandise sales for recent movies including Madagascar 3 were disappointing. Live shows are only so-so. (DWA took a $5M impairment charge for Shrek The Musical). And so on.