Katzenberg touts DWA, Par partnership

CEO: 3D ticket price premiums to reach $5 in 18 months

NEW YORK -- DreamWorks Animation CEO Jeff Katzenberg on Tuesday expressed confidence in his firm's distribution partner Paramount and signaled little interest in a new one.

"We have had a very good relationship with Paramount ... and I don't think anybody could do a better job for us," he said during a keynote luncheon appearance at the 6th annual Jefferies Global Internet, Media & Telecom Conference.

He did, however, emphasize that observers have suggested the 8% distribution fee that DWA pays could be lower -- at 6% or 7%. "We don't know," and he has no news at this stage, said Katzenberg about a potential change to the Paramount fee structure.

Some observers have suggested that Time Warner's Warner Bros. or another film studio could replace Paramount as DWA's distribution partner once the current relationship comes to an end.

"Paramount has done an outstanding job," Katzenberg said, pointing out that ex-DreamWorks executives work in various parts of Paramount.

Addressing recent questions about DWA's international performance, he said Paramount has helped the company do well there compared to peers, too. He said that DWA's last eight releases performed 20% above Disney/Pixar internationally, and the firm has done 10% better than Fox.

Katzenberg also predicted Tuesday that 3D movie ticket price premiums will ultimately reach $5 over the next 18 months, and he took issue with Hollywood's obsession with opening weekend boxoffice performance.

He said last year price premiums for 3D stood at about $3, and now are at about $3.30-$3.50 with still "zero price resistance." He called the $5 premium that he envisions "the right price level."

Asked whether DWA could get to a point where it releases three films every year instead of five during a two-year period, Katzenberg said that is a longer-term goal, but the company isn't rushing things or committing to that kind of schedule yet.

Asked about TV show projects beyond current Nickelodeon hit "The Penguins of Madagascar," Katzenberg touted the November launch of a Nick show based on "Kung Fu Panda" and development work on another Nick show based on "Monsters vs Aliens" character B.O.B.

The DWA CEO also said his firm is currently developing a TV series based on "How to Train Your Dragon" and upcoming feature "Megamind."

"Everything about 'Shrek' has been a blessing," the DWA boss said when asked about the upcoming final installment of the franchise. "We will get off to a very good start."

But he also took issue with Hollywood's "obsession" with opening weekend performance, citing "Dragon" and even live action hit "The Hangover," which also had a slow opening.

"We got off to a soft start, and we were disappointed" that DWA didn't appear to have found the right marketing strategy for "Dragon," he said. But the film has since become a genuine hit, he added.

Asked about "Megamind," Katzenberg said DWA will take the film and cast to Comic-Con this year given that its themes should resonate with fanboys.

Katzenberg told the Jefferies conference that incremental 3D production costs have come down from $15 million to an estimated $10 million this year.

The company is also pioneering new tools with Intel that will be ready over the next 18 months. "This next-generation multi-core computing will be an equally big game changer for us" as 3D, Katzenberg said.
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