Thursday, April 28, 2016

Full Thoughts on the Comcast/Universal and DreamWorks Merger

It's done. It's set. Comcast will acquire DreamWorks Animation for a whopping $3.8 billion...

The 22-year-old animation studio has entered yet another chapter...

As I explained in the previous post, I am all for this. Actually, a while back, I posted a poll that asked what distributor DreamWorks should turn to after their deal with 20th Century Fox ends with the mid-2018 release of How To Train Your Dragon 3. I felt, personally, that Universal would be the best of the batch...

DreamWorks, being one of the oldest non-Disney American feature animation houses, was bound to run into problems sooner or later. That's how the business goes. DreamWorks was formed in 1994, while studios like Sony Animation and Illumination came later. One of the only current studios that's older than DreamWorks is Blue Sky, which was formed in 1987... Long before they did features. Jeffrey Katzenberg left Disney after his relationship with then-CEO Michael Eisner went south, and formed his own movie studio with Steven Spielberg (another notable individual that Eisner alienated) and David Geffen. Katzenberg immediately sought to compete with Disney in the animation world. Soon, DreamWorks Animation was born...

There were some false starts, and some heartbreak, but the success of Shrek and its 2004 sequel set the studio on a hit-making path. Only two box office losses were released between summer 2004 and  summer 2012. The film that ended the streak was Rise of the Guardians, the last DreamWorks feature to be distributed by Paramount. I feel Paramount completely botched the marketing for that film, taking a whimsical fantasy for the whole family and making it look like an Avengers wannabe for tykes. It opened terribly, though its legs and word-of-mouth showed that audiences who saw it really liked it. It wasn't enough to make back that gargantuan budget, though...

Layoffs ensued, and so did a restructuring of the studio's big slate. The Fox deal began with The Croods in spring 2013, and that did very well at the box office and launched a franchise right away. Things were off to a good start! But then Turbo flopped, and then Mr. Peabody & Sherman flopped. How To Train Your Dragon 2 did very well, but its domestic gross was a bit on the disappointing side. Penguins of Madagascar did poorly, too. January 2015 brought another restructuring, 500+ employees were shown the door and the studio's 35-year-old partner - Pacific Data Images - was shut down...

Of course, people rushed to do the autopsy. Here's what I think happened, and if you've been here long enough, you'll know why I think all of those films flopped...

First of all... Why did Turbo cost $135 million to make? Why did Mr. Peabody & Sherman, a film based on a segment of a classic TV show from the 1950s that the general public under the age of 30 may not know, cost $145 million to make? Why did they blow $132 million on Penguins of Madagascar?

Other studios are smart with budgets. They know they aren't Pixar, who has the safety net that is The Walt Disney Company behind them. Illumination spends less than $80 million on their films, Sony Animation tries to stay below $90 million, Blue Sky hovers around $90-100 million. Reel FX and studios like that are even smarter, sticking near $50-60 million. DreamWorks on the other hand has spent over $130 million on their recent features, which made them real gambles.

There was a time when any CG film had instant hit written all over it. Computer animation took audiences by storm in the late 90s and early 00s, it was a real rage - I was there, too. There were very few anomalies, like the performance-capture Final Fantasy: The Spirits Within. Disney's Dinosaur opened huge, but had underwhelming legs and a worldwide gross that couldn't make back the cost to make it and the cost of setting up a special studio - The Secret Lab - to make it. Antz - DreamWorks' first feature animation release, a PDI co-production - cost quite a lot, too. Other than that, it was a hit-making machine for nearly everyone.

Pixar had back-to-back hits, DreamWorks scored big bucks with the Shrek films, Shark Tale, and Madagascar. Disney Animation's first all-CG film Chicken Little did good business stateside, its worldwide total barely doubled the picture's hefty budget. Blue Sky did quite well with Ice Age, Ice Age 2, and Robots.

Around 2005/2006 was when we started to see that a family-friendly CG picture isn't always foolproof. We saw a ton of underperformers or relatively low-grossing films in 2006, and some more in the ensuing years. Remember the good old days of movies like Barnyard, Ant Bully, Everyone's Hero, Happily N'ever After, Fly Me to the Moon, et al? The mania was over... Audiences showed that they were now going to see the CG pictures they wanted to see, not every single one.

DreamWorks continued to spend big amounts on their pictures, though.

People often bring up quality, but audiences are unpredictable. A lot of critics weren't big on something like Home, but the film opened with a strong $52 million and finished with a fine $177 million domestically. Whenever people say "Well DreamWorks, if ya made better movies!", I cringe... Quality is great, yes, but hardly a deciding factor in how a movie does on its opening weekend. The important thing that animation studios and the people who market their movies need to know is that... You need to make the movies "look good" to the audience before they come out, regardless of how good or bad or mediocre the movies themselves are. And you can sure as hell make a piece of shovelware look like a must-see. Something that will make over $50 million on opening weekend.

A lot of good movies tank, a lot of bad movies tank... It's all about how it looks. Then there's legs, which you also have to consider. Warner Bros. probably didn't need to worry about anything when their Batman v Superman opened with $166 million domestically, but then started worrying when the weekend-by-weekend drops turned out to be very, very steep. Most animated films don't usually have this problem, but in order to make back a $100 million+ budget... Make it look good so that it opens with $50 million+!

In the wake of the collapse, DreamWorks saw two box office breathers with Home and Kung Fu Panda 3. The upcoming Trolls and Boss Baby will be part of their current "lower budget" plan, though really... $120 million is lower budget than the costs of the previous endeavors?

I feel that Fox has botched the marketing for their films. Even successes like How To Train Your Dragon 2 and Kung Fu Panda 3. The former should've burst past $60 million on opening weekend, it didn't, and the marketing people went against the studio's wishes - spoiling Valka in the trailers. The TV show existing didn't help, either. ("Why pay to see that when we can see it on TV for free?!") The latter? It just looked "eh" from the trailers, turned out to be good, but at $500 million, it's not as big as its predecessors. Should've been bigger elsewhere though, especially with the Chinese gross being splendid.

I wasn't sure how long DreamWorks would last with this strategy, because the more flops, the more restructurings and layoffs. We don't want that, they don't want that, but something just had to happen... And it did.

Comcast bought them, Universal Pictures will distribute the studio's films, and Jeffrey Katzenberg is out of the feature animation division.

First off... Universal is a marketing MONSTER with animation. Despicable Me, Illumination's first feature out of the gate, made $251 million domestically (off of a strong $56 million opening) and over $500 million worldwide... On a roughly $70 million budget. Illumination's founder and head Chris Meledandri knows a thing or two, given his success at Blue Sky and his other animation endeavors, and also some kick-in-the-teeth experiences... Most notably the box office flop that was Don Bluth's Titan A.E. Illumination hasn't spent more than $80 million on a single film of theirs. Only one did so-so numbers, and that was Hop. Everything else did quite great, but again, the bar isn't too high for them...

I'm sure Illumination's two releases this year, The Secret Life of Pets and Sing, will do equally fantastic business both domestically and worldwide. They know how to reel in the audiences. Fox, on the other hand, has shown that they have trouble with that.

Anyways, like I said, it's not 2003 anymore. Stuff like Trolls, Boss Baby, and Larrikins aren't guaranteed to pull $500 million out of a hat just like that. It's time to bring those budgets down, because you can produce cool and amazing-looking work for $60-70 million. It's been noted in several articles that Meledandri, who really is pretty much another John Lasseter in this industry in terms of financial success, will oversee DreamWorks and figure out what to do with their pipeline.

I have no idea when he'll or they'll take action. DreamWorks' distribution deal with Fox is still set in stone, and as confirmed recently, Universal won't take that crop of films. Whatever is slated to open after Dragon 3 will be the first of the Universal-distributed DreamWorks films... But when will Meledandri's involvement in production start? The companies are supposed to merge by the end of this year, so... Will we be seeing Universal/DreamWorks films distributed by Fox? That sounds kind of strange on paper.

If Meledandri is involved from the start, my guess is that we'll see a shift when The Croods 2 enters production. A lower budget for it will be called for, maybe around $100 million. The release date ought to change too, since the Millennium Falcon is now parked in its frame.

Then there's the biggest question... How will this all affect the quality of DreamWorks' output?

As I've said here before, Illumination is hit-or-miss with me. Despicable Me, I think, is their only genuinely good film. Though similar to a lot of recent animation in a lot of ways, the filmmakers still had a lot of fun with it and milked the heck out of the cartoony/Looney Tunes-y spy-vs-spy premise, and plus the story wasn't half-bad and the characters were very likable. I still enjoy it on repeat viewings. Hop's a kiddie flick, The Lorax throws out the strengths of the Dr. Seuss book and is just a loud, colorful rental. Despicable Me 2 lacked the charm of the first film and felt dull, Minions? No different. Pets looks fun, Sing looks interesting, Grinch could be alright.

However, it looks like a lot of key people will remain at DreamWorks despite Katzenberg's exit, such as Presidents Mireille Soria and Bonnie Arnold. They probably have a different idea of what to do with features than the heads at Illumination, so I don't know if DreamWorks' films will start to feel more like Illumination's or not.

John Lasseter and Ed Catmull head up Walt Disney Animation Studios and Pixar, and I feel both houses have their own voices. They may share some similarities, being cousin studios and all, but I've never seen them as "the same". To me, all Lasseter does is ensure that the stories are good, but he keeps the studios separate entities. Zootopia is through-and-through a Disney animated movie, Inside Out is through-and-through a Pixar movie. It's not like they are assigned to make one type of movie. Pixar got ribbing for pictures with "simpler" stories like The Good Dinosaur and Brave, while people go gaga over Disney stories that are "Pixar-like" and "complex", like Wreck-It Ralph and Zootopia.

I don't buy that mindset.

With that, I think Meledandri will just run things, but DreamWorks will still make DreamWorks movies. Illumination is defined by googly, wacky comedies with fun designs, whereas DreamWorks... DreamWorks is a unique studio in that they don't really have much of a house style, and have changed direction over time. The Prince of Egypt is certainly no Croods, Shrek is certainly no Rise of the Guardians, and Shark Tale is certainly no How To Train Your Dragon!

But they certainly have had their phases. The mid-2000s was mostly snarky, pop culture joke-laden comedies. Late 2000s to mid-2010s? A mix of fun comedies (Madagascar sequels, Monsters vs. Aliens) and family adventures (Kung Fu Panda, How To Train Your Dragon). After the collapse in 2014, Katzenberg got more involved in the features and wanted to set them on a path to make silly romp movies for "children and their mothers", limiting the studio creatively in my opinion. The best animated features live on as cinematic classics because they appeal to everyone, not just a target audience. Disney knows/has known this, ditto Pixar and other makers of great, long-lasting animated films.

Katzenberg's now out, so I can only imagine what the new path will be...

So now, the current crop from now until 2018...

Trolls could be a fun fantasy-musical if done right. Its teaser is no indicator of the finished product, as confirmed by some people who are working on the film. However, reports of the actual footage shown at CinemaCon haven't been positive.

Boss Baby is being directed by Tom McGrath, who I think did well with the Madagascars with his directing partner Eric Darnell, not so much Megamind. Austin Powers scribe Michael McCullers is writing, so that could bring some spark to the picture. The premise is goofy and out-there, so hopefully they do something fun for everyone with it.

Captain Underpants? If they can keep unabashedly gross-out humor fresh from an hour and a half, and have a decent story to go with it all, cool.

The Croods 2? One was set in a visually breathtaking world and had a great first third, but became a noisy sugar-bowl garden-variety kidpic after that, doing little to nothing with its characters. Room for improvement.

Larrikins is the one that excites me the most, a quirky The Gods Might Be Crazy-style musical set in the outback, with music from Tim Minchin among other things. This could be something of a Rango-like blast for them, that is, if they stick to the weirdness of it.

How To Train Your Dragon 3... The team behind it want to go an even darker route with it, staying true to the spirit of the second film. Kung Fu Panda 3, I think, chickened out a bit after the rather dark Kung Fu Panda 2. I don't want that for Dragon 3, but thankfully Kung Fu Panda 3's story - while rushed - had great ideas and genuinely good moments, so let's hope the story here is great.

In the end, let's hope for the best for the moon boy studio...


  1. Antz - DreamWorks' first feature animation release, a PDI co-production - cost quite a lot, too

    Actually, there's some confusion about what Antz's budget was. Official interviews with Dreamworks staff put it at $42 million, though that presumably doesn't count marketing or advertising. The Internet Movie Database lists it as $60 million, which is about the same as Shrek and Dreamworks' other early movies. Wikipedia, on the other hand, places it at $105 million.

  2. I wonder if "one sequel and one original a year" thing will happen or Universal will change that new rutine

    1. I think they'll stay the course.

    2. Actually, I think they'll stick to a third lower budget film. This is why I believe that Everest(or whatever Oriental DreamWorks is making)should be a 2018 release in the states, making it the last FOX-DreamWorks release. I made a whole prediction chart on the last article, so I don't feel like reposting it here.

  3. I think that the Dreamworks eras (like the disney eras) are of mark by their distribution parent, When dreamworks skg was the owner it was the golden era, then when Paramount came it was the silver era, with fox was the dark/bronze era (because the box office flops) and now with comcast it could be a renassinse...

  4. I dont understeand how the budget thing works?? i think that if they can do lower budgets they will do but it is not enought to pay the whole movie i think

  5. Dreamworks sometimes made great movies, sometimes funny movies, sometimes ok movies and sometimes bad movies.

    great: shrek,antz, kung fu panda, httyd,puss in boots and rise of the guardians.
    funny: Madagascar, Over the hedge, monster vs aliens, megamind, penguins of madagascar and home
    ok: croods, turbo, mr peabody, bee movie
    bad; shark tale XD

    (i dont count the hand draw and the co-productions)

  6. Best. News. Ever! I can't wait to see what will they bring to the table. Also, what is your opinion on Batman v Superman, The Jungle Book, the new trailer for Kubo and the Two Strings and last week's The Simpsons' Couch Gag Geting the Disney Treatment, as well as A New, Action-Packed 'The Secret Life of Pets' Trailer and The First TV Spot for 'Finding Dory'?

    1. Kubo trailer review is getting a full post, hang tight - very busy week for me. Didn't see 'Batman v Superman' or 'Jungle Book', still need to check out the Eric Goldberg 'Simpsons' couch gag, 'Finding Dory' TV spot was cool, 'Secret Life of Pets' trailer was so-so to me.

    2. Good luck getting to see the Simpsons' latest couch gag and both of these films when you see then!