DreamWorks Animation Launches Effort To Re-Position Itself As A Television Power
Are Investors Too Optimistic About DreamWorks Animation?
The company told analysts this afternoon that it will produce 1,200 TV episodes over the next five years, which CEO Jeffrey Katzenberg says “will give us a significant footprint across the global TV landscape.” DreamWorks Animation is “now on a path to becoming one of the biggest producers and distributors” of television following yesterday’s agreement to create 300 hours of programming for Netflix and today’s deal to make up to 1,100 half-hours for Germany’s Super RTL, which he calls “transformative.” All told, “it’s a big opportunity and a big undertaking.” Katzenberg adds that the company should see $100M in revenues from TV this year, about half of which will come from titles in the Classic Media library bought last year. Beginning 2015 the company expects to see at least $200M in TV revenue per year with gross profits of around 30%, close to what it sees from its films. Revenue from the Netflix and Super RTL deals won’t vary depending on the performance of different titles. The numbers don’t include benefits from sales of licensed merchandise, the library value of shows, or progress from its recently acquired online video service AwesomenessTV. The company isn’t ready yet to create a separate business line for television, but will consider the change. DWA shares are up about 1.8% in after market trading.