While Disney delivers “Frozen,” Universal delivers “Despicable Me,” and Warners delivers “The Lego Movie,” DreamWorks Animation is reeling from its latest box office disappointment, “Penguins of Madagascar” after already losing money on “Mr. Peabody & Sherman,” “Turbo,” and the disastrous “Rise of the Guardians.” According to the Los Angeles Times the result is upwards of 400 layoffs, 15% of the staff.
The future isn’t looking all that bright, either. Studio co-founder Jeffrey Katzenberg hasn’t been able to find a sugar daddy multinational to buy the studio and its big summer offering, “B.O.O.,” has been postponed.
Other than a weak slate, DreamWorks has two other problems: It is dependent on the success of each film. DreamWorks makes animated films. That’s what they do. There’s very little diversification as a way to cover those losses elsewhere. The horrific collapse of the home video market is also a big factor. The Los Angeles Times blames Netflix and other streaming service, but that’s anti-science.
The home video market began its collapse long before the phenomenon of streaming began. That collapse has nothing to do with piracy or streaming or even leprechauns. Movies just aren’t very good anymore. Even most hit movies don’t rise to a level where people can’t wait to buy their own copy. Too many mainstream movies feel disposable. Too many indie movies are nothing more than parodies of indie movies.
With a $619 million worldwide gross. “How to Train Your Dragon 2” was a rare hit for DreamWorks. Yet, while it was imaginative and entertaining, it certainly wasn’t something I’d ever see again.
That’s Hollywood’s existential problem right now: movies cost so much to produce and market, most won’t break even in theatres — not even hits.
John Nolte on Twitter @NolteNC
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