Monday, June 16, 2014

What's next for Dreamworks Animation after the disappointing opening for How to Train Your Dragon 2?

Dreamworks Animation has been on a cold streak recently that they just can't seem to shake. It started in November 2012, with Rise of the Guardians. The holiday-themed film cost $145 million and only made $306 million.To some that might sound like a profitable film, but odds are that Dreamworks took a loss on that one with the addition of marketing and distribution costs. After that disappointment, Dreamworks released The Croods, which is their only recent hit. The prehistoric comedy took in an impressive $587 million worldwide off a $135 million budget. However, Dreamworks ran into another disappointment in July 2013 with Turbo, which grossed a meager $282 million off a $135 million budget. And finally, Mr. Peabody and Sherman opened in March 2014 and grossed a disappointing $267 million with a budget of $145 million. Those are three films that likely lost money for Dreamworks in a very short amount of time. Not good for any company.

The common thought among box office prognosticators was that Dreamworks would finally bounce back this month with How to Train Your Dragon 2, the sequel to one of the biggest hits in the company's history. However, the film has disappointed at the box office so far, taking in $49.4 million in the US and an additional $26.1 million overseas. For a franchise film, that's a shocking result. Now, keep in mind that there is no competition for Dragon 2 and it will still likely finish with around $180 million in the US and around $460 million worldwide, but with a fan-favorite predecessor and a big budget, this film should have done a lot better.

Dreamworks Animation stock fell from $27.35 to $24.35 this morning after the disappointing performance of Dragon 2 and I'm not sure if that stock will rise any time soon. The question on everyone's mind in Hollywood is: Where does DWA go from here? The answer is that a lot of sequels and sure-fire hits are in the pipeline and less risky gambles, which could save the studio.

It turns out that Dreamworks has all of their films planned out until 2018, which is interesting. Their next film is only five months away and that film is The Penguins of Madagascar. The Madagascar franchise is one of the few left that can still make a ton of money for the studio and I'm sure that The Penguins of Madagascar will be a hit. The last Madagascar film (released in 2012) took in over $700 million worldwide and while this film will likely make less, it should still make enough profit to offset some of the losses taken from recent Dreamworks movies.

After that is when things get really dicey. Dreamworks' next film is Home, which tells the story of a little girl (Rihanna) and an young alien (Jim Parsons). The trailer was semi-annoying, but I still see the potential for a hit here. The film is hitting theaters in March of next year, a month where many original properties have succeeded in the past. If the marketing campaign is good enough, Home should be in decent shape.

June sees the release of another risky original property from the studio in the form of B.O.O.: Bureau of Otherworldly Operations. The flick sounds like a new take on Ghostbusters, which should be appealing to kids. However, it's hitting theaters in the thick of summer; one week after Paramount's Monster Trucks and two weeks before Pixar's Inside Out. That's a tough spot for the film and I really think that it would be a smart move for Dreamworks to move to a date in late July or early August.

After two risky films, Dreamworks will release Kung Fu Panda 3 in December 2015, which should make a solid amount of money for the studio. The China-set series doesn't do big business in the US, but typically makes up for it overseas, which makes Kung Fu Panda 3 a sure thing for Dreamworks. After that, the studio will debut Boss Baby on March 18, 2016. There is literally no information about that flick, so I really can't give an opinion on it.

Next, in June 2016, How to Train Your Dragon 3 will debut, which should close out that franchise. With the disappointing results for the recent sequel, I wouldn't be surprised if that film got scrapped, but in the end, it should pull in enough grosses to justify a third film. Finally, Dreamworks will release Trolls as their final film of 2016, which is apparently a movie about the toy dolls with the spiky hair. Interesting. I have no comment.

In 2017, Dreamworks will once again release three films, but the fact that one is in January is something that really interests me. The studio will debut Captain Underpants in January 2017, which might end up being a great idea. I have no clue if the film will be any good, but the film could end up thriving with little competition in the month of January.

After the release of Captain Underpants, Dreamworks will unleash a Kevin Lima Bollywood Musical in March, which sounds interesting enough and could do great business internationally. Finally, The Croods 2 will hit theaters in November 2017, which should make a boatload of money.

And believe it or not, Dreamworks has more movies on the release schedule for 2018. First is Larrikins in February, which I know nothing about. They'll follow that up in May with Madagascar 4 which should be a massive hit. And finally, Dreamworks will release Puss In Boots 2: Nine Lives and 40 Thieves, which should make a lot of money as well.

In the end, Dreamworks could survive by using some savvy business moves and experimenting with different months on the release date calender. However, if one or two more films flop, the studio could really be in trouble. Hopefully they can hold on and continue to create original animated films.

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