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This story first appeared in the June 20 issue of The Hollywood Reporter magazine.
Having been forced to take write-downs on his past two original movies, Turbo and Mr. Peabody & Sherman, DreamWorks Animation CEO Jeffrey Katzenberg has promised Wall Street the company will lean more heavily on established franchises, saying, “Getting our feature film business back on track is our number-one priority.” How to Train Your Dragon 2, set to open June 13, could be a strong first step toward that goal. Insiders say the $145 million-budgeted sequel needs to gross in the $700 million worldwide range for DWA and distributor Fox to consider it a clear hit; hopes are high because the first Dragon grossed nearly $500 million in 2010 and Dragon 2 opens in a summer without much kids fare and no Disney/Pixar opponent.
To bolster its 2014 further, DWA moved up The Penguins of Madagascar, the fourth film in the franchise, from March to Nov. 26, postponing its next original movie Home, about an alien visit to Earth, to the spring. Even though DWA has begun diversifying in recent years — striking a 2013 deal with Netflix for 300 hours of programming, acquiring YouTube network AwesomenessTV and launching a book imprint — it remains heavily dependent on its movies, resulting in wild stock swings. But that could be changing. Although 71 percent of DWA’s revenue came from feature films in 2013, says analyst Tony Wible, “in 2015, we have only 48 percent of the company’s revenue coming from current films. That’s roughly 50-50 — a huge transition. You’re not rolling the dice on Turbo; instead, you’re cutting a deal with Netflix.”
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