Jon Erlichman, speaking on Bloomberg’s “In the Loop”, said that the criticism that has been dogging Dreamworks Animation Skg Inc (NASDAQ:DWA) is that they have had some underperforming films, even with ‘How to Train Your Dragon 2’ grossing about $400 million at the global box offices. This is substantiated by the slew of movies (such as ‘Turbo’ and ‘Mr. Peabody’ and Sherman) that have fallen short of expectations in recent times.
Now, the focus is on being a company that will not only be involved in films, but in original TV productions, which is assisted by their deal with Netflix, Inc. (NASDAQ:NFLX). They have also acquired AwesomenessTv, a large network of YouTube, LLC channels, in a bid for the teen client base. However, Erlichman pointed out that in spite of all these measures, Dreamworks Animation Skg Inc (NASDAQ:DWA) remains dependent on what happens at the box office.
“The movie industry needs an entirely new business model”, Jeffrey Katzenberg, the CEO of Dreamworks Animation Skg Inc (NASDAQ:DWA) was quoted as saying at the Milken Conference. The movie industry is hampered by the existing business model of a three-month run at the movie theatre, where the theatre chains insist on exclusivity, to be followed by on-demand airing, and HBO and Netflix, Inc. (NASDAQ:NFLX) availability. Given these limitations, the push is for original and new content to be freely available, and this is what Katzenberg is looking for.
Erlichman also discussed the personnel hiring aspect of Dreamworks Animation Skg Inc (NASDAQ:DWA), mentioning that The Walt Disney Company (NYSE:DIS)’s veteran Mark Zoradi has been hired to be Chief Operating Officer at Dreamworks Animation Skg Inc (NASDAQ:DWA). Zoradi has been part of many aspects at The Walt Disney Company (NYSE:DIS), and is seen as an ideal candidate, given Dreamworks Animation Skg Inc (NASDAQ:DWA)’s steps towards moving beyond film.
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