While live action isn't a nightmare for DreamWorks Animation SKG, this company definitely prefers CGI. DreamWorks Animation has produced more than 20 computer-animated family-friendly features -- including high-earning hits such as Shrek the Third, Shrek 2, and Madagascar. (Its Shrek 2 is one of the highest grossing films of all time at the domestic box office.) The studio's movies are distributed and marketed by Twentieth Century Fox. 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.
The studio releases about five CG animation feature films every two years. In 2012 DreamWorks Animation released Madagascar 3: Europe's Most Wanted, which performed well at the box office. The previous year it released two successful films, Kung Fu Panda 2 and Puss in Boots. All of its movies, beginning with the release of Monsters vs. Aliens in 2009, are released in stereoscopic 3D.
The company previously had a distribution partnership with Paramount Pictures, but that deal ended in 2012. (Paramount had won the rights to distribute DreamWorks Animation's movies when it acquired related company DreamWorks in 2006; Paramount relinquished ownership of DreamWorks in 2008.) In 2012 DreamWorks Animation signed a five-year deal with Twentieth Century Fox that runs from 2013 through 2017.
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).
DreamWorks Animation's headquarters, where the majority of its employees work (including most animators and production staff), is located in Glendale, California. The company has a second facility in Redwood City, California. In 2012 the company expanded in Redwood City with a new, larger campus (measuring 200,000-square-feet) designed to accommodate the company's growth plans; DreamWorks Animation plans to add some 200 workers over the next three years.
The studio is also expanding overseas, specifically in China. Such plans were unveiled in 2012, when it announced that it intends to build a studio in Shanghai. In fiscal year 2011 more than half of the company's revenues came from outside the US.
The company's earnings decreased in 2011 when compared to 2010. In 2011 it reported total revenue of $706 million and net income of $86.8 million, vs revenues of $784.8 million and net income of $170.6 million in 2010. A major factor for the earnings slide was that DreamWorks Animation released two films in 2011, compared with three films in 2010. Another key reason for the drop was due to weak holiday demand for DVDs in 2011.
In 2012 the company announced plans to acquire Classic Media as part of an ongoing diversification strategy. It is buying the firm for $155 million in cash from Boomerang Media Holdings, a portfolio company of private equity firm GTCR. Classic Media owns the rights to a portfolio of family-oriented entertainment brands, including recognizable characters such as Casper the Friendly Ghost, Gumby, Underdog, and Rocky & Bullwinkle. The deal will give DreamWorks Animation a library of 450 titles and more than 6,100 episodes of animated and live-action programming, as well as comic book archives and media rights to the titles in the Golden Books library.
Jeffrey Katzenberg and David Geffen, both founders of the former parent company DreamWorks (along with Microsoft co-founder Paul Allen), control nearly 70% of the total voting power of DreamWorks Animation.