DreamWorks Animation SKG Inc. is dreaming big.
The studio behind the hit films "Madagascar" and "Kung Fu Panda," seeking to expand beyond its core animation movie business, is making an aggressive push into television, touring musicals, theme park attractions and even a Cirque du Soleil-style revue inspired by "Kung Fu Panda."
DreamWorks' expansion comes at a time when many other Hollywood studios are retrenching and signals to some investors that the company may be positioning itself for a sale once the economy recovers. The Glendale-based film and TV producer headed by Jeffrey Katzenberg and spun off from DreamWorks SKG in 2004 is one of only two smaller publicly owned independent studios left in an industry consolidated among a handful of major players.
Katzenberg has told analysts the company is not for sale at this time but has been increasingly vocal about the company's strategy to leverage its core characters beyond the big screen.
"We think our content gives us the opportunity to connect with audiences in unique and innovative ways that have never been seen before," the DreamWorks chief executive told analysts recently.
Behind the move is DreamWorks' desire to create a more reliable revenue stream to reduce its dependence on the outcome of only about two movies a year.
With industrywide DVD sales in a slide, the studio is also facing increased outside pressure to broaden the scope of its business.
DreamWorks recently announced that it would produce an extra film every other year, boosting its biannual output. The studio is pushing into television, where its new animated series on Nickelodeon, "The Penguins of Madagascar," has quickly become a hit for the cable channel.
Although DreamWorks had long planned to diversify, its ability to do so was held back by an uneven track record at the box office, which has been a nagging concern for investors. The studio, for example, followed up its 2005 hit "Madagascar" with the 2006 box-office flop "Flushed Away," for which it was forced to take a write-down.
But with 2008's "Kung Fu Panda," which pulled in $632 million at the worldwide box office, DreamWorks now has its third film -- after "Shrek" and "Madagascar" -- that not only can generate sequels but lucrative spin-offs for television.
Over the last year, while Hollywood studios have been laying off employees, DreamWorks hired 200 people, bringing its workforce to 1,800. The studio now has 40 directors and producers on staff helping it ramp up production.
