While live action isn't a nightmare for DreamWorks Animation SKG, this company definitely prefers CGI. DreamWorks Animation has produced about 20 computer-animated family-friendly features -- including box office hits such as the 3-D adventure film How to Train Your Dragon and the movies in the highly lucrative Shrek series. Other titles include Kung Fu Panda 2 and Monsters vs. Aliens. The studio's movies are distributed and marketed by Paramount Pictures. DreamWorks Animation earns most of its revenues from distributing its films in theaters and ancillary markets such as home entertainment and cable and broadcast TV. In 2004 former parent DreamWorks spun off DreamWorks Animation as a separate company.
Paramount's distribution partnership with DreamWorks Animation runs through 2012. (Paramount won the rights to distrbute DreamWorks Animation's movies when it acquired DreamWorks in 2006; Paramount and DreamWorks parted ways in 2008.) DreamWorks Animation releases one or two CG animation feature films per year. Its 2010 hit How to Train Your Dragon capitalized on the resurgent 3-D technology, and exceeded expectations at the box office. The title opened as the #1 film, and after its fifth week in the theaters it nearly hit $200 million in domestic sales. The success of that title, in addition to its two other 2010 releases (Megamind and Shrek Forever After) lead to increases in revenues and net income for the year. The studio's next movie, Kung Fu Panda 2, also fared well at the box office when it was releaed in 2011.
Its series of Shrek movies, however, is DreamWorks Animation's most successful franchise to date. While the latest installment of the series, Shrek Forever After, made $238 million in the summer of 2010, it was a modest success when compared to the series' earlier films. Shrek the Third, released in 2007, took in $122 million in its opening weekend, breaking the franchise's own record for best debut ever for an animated film. Despite its success, it failed to beat Shrek 2's overall performance: that film was previously the highest-grossing animated film of all time, before being surpassed by Toy Story 3 in 2010.
While feature films are the company's bread and butter, DreamWorks Animation also earns royalty-based revenues from the licensing of its characters to consumer product and home entertainment companies. For example, an online virtual world game based on Kung Fu Panda was launched in 2010. Previous licensing revenues came from animated TV series (such as The Penguins of Madagascar on Nickelodeon) and live performances (including Shrek the Musical on Broadway).
Jeffrey Katzenberg and David Geffen, both founders of the former parent company DreamWorks (along with Microsoft co-founder Paul Allen), control approximately 70% of the total voting power of DreamWorks Animation. Katzenberg serves as the company's CEO, and is also a director; Geffen resigned from the board in 2008.
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