Why Buzz and Woody Aren't Shrek

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It's not easy being green -- especially for an ogre dethroned at the multiplex. The fourth installment of DreamWorks Animation's (NYSE: DWA  ) Shrek series currently tops the box office, but compared to its predecessors, its initial take seems more lackluster than blockbuster. Fellow Fool Rick Munarriz argues that moviegoers' relative disinterest in Shrek Forever After could bode poorly for Disney's (NYSE: DIS  ) upcoming Toy Story 3. But before Disney shareholders despair, they ought to consider a few key differences between the two major animated franchises.

Animation ogre -- er, overload
Toy Story made history as the first fully computer-animated feature film when it premiered in 1995. Four years later, 1999's Toy Story 2 earned a plum spot on the list of sequels that improve on their originals. Both films still hold perfect ratings of 100 at movie-review-aggregator site Rotten Tomatoes.

The original Shrek arrived in 2001, poking gleefully anarchic fun at Disney's fairy-tale classics, and earning more than $266 million and a 90% fresh score from Rotten Tomatoes. Shrek 2 did even better in 2004, raking in a whopping $436 million while still maintaining an 88% fresh rating from critics. But the wheels started to come off the pumpkin coach with 2007's Shrek the Third; it still made a kingly $320 million, but its flabby story and quickly dated gags made critics hold their noses, plunging to 41% freshness.

With goodwill for the franchise thoroughly spent by three cranked-out films in just six years, it's no wonder audiences aren't rushing to embrace film No. 4 -- especially given the lingering odor of Third's disappointment. If reviews had hailed Shrek Forever After as a return to form, maybe its big green antihero would have enjoyed a bigger opening weekend. But thus far, it's only limped to a 52% fresh rating.

Dusting off the toybox
In short, every single movie in the Shrek franchise has debuted in the gap between the last Toy Story film and the new one. As Shrek, Donkey, and friends have apparently worn out their welcome in an effort to shovel audiences' cash into DreamWorks' coffers, viewers have built up their anticipation for more adventures of Woody and Buzz Lightyear. The Toy Story films still enjoy healthy sales on home video, and the characters have spent more than a decade becoming staples of real kids' toyboxes and a whole flotilla of Disney merchandise. More importantly, the fun of the first two Shrek films has been tarnished in hindsight by their increasingly rote sequels, while the Toy Story films still enjoy a reputation as timeless family classics.

This may have something to do with Disney's and DreamWorks' differing approach to movies. In a 2007 Wired profile, DreamWorks Animation chief Jeffrey Katzenberg trumpets his preference for quantity over quality -- as many films as possible cranked through the pipeline, each stuffed with bigger, broader, crasser gags. ("It's great," the article quotes Katzenberg as saying about a sequence in progress from Madagascar, "but what I think you need to do is have her kick him in the nuts.")

In contrast, Toy Story creators at Pixar have become famous for their painstaking standards for quality, polishing their stories to perfection even under murderous deadlines. Unlike DreamWorks' mixed efforts, just about every entry in Pixar's 15-year history of feature films has enjoyed resounding critical and commercial success.

Toy Story 3 isn't a guaranteed smash. The law of averages suggests the studio has to stumble sometime, and a long-in-development second sequel to a 15-year-old film is as good a place as any. Meanwhile, recent DreamWorks entries such as Kung Fu Panda and How to Train Your Dragon have drawn praise from critics as big creative leaps beyond the studio's earlier work, suggesting that Pixar can't afford to rest on its considerable laurels.

Still, just because the moviegoing public seems to have chased Shrek back into the swamp, Disney shareholders shouldn't automatically assume that they'll toss Woody and Buzz into the garage-sale bin as well.

Which do you prefer: Pixar's pursuit of perfection, or DreamWorks' fast and funny style? Which makes a better investment, and why? Sound off in the comment box below.

Disney and DreamWorks Animation are Motley Fool Stock Advisor picks. Disney is also a Motley Fool Inside Value selection. Try any of our Foolish newsletter services free for 30 days.

Fool online editor Nathan Alderman is unconvincingly rendered and questionably animated. He holds no financial position in either company mentioned here, although you're welcome to see all his holdings. You've got a friend in the Fool's disclosure policy.

Read/Post Comments (6) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 03, 2010, at 1:23 PM, BadCopNoDonuts wrote:

    Toy Story 3 will probably set a new record of some sort. I saw the preview. It's likely to dominate the summer movie season.

  • Report this Comment On June 03, 2010, at 2:08 PM, PhulishMortal wrote:

    Count me in the Pixar camp.

    Dreamworks' stuff is OK, but not really anything particularly special. I saw Shrek (the original) and enjoyed it. I haven't seen any of the sequels, though, and I can't say I feel any sort of void in my life.

    Pixar, though, has created masterpieces. Finding Nemo? Monsters, Inc? Toy Story? Gems, every one. Story and characters come first, with gags of lesser importance. That makes for enduring movies and loyal fans. On top of that, if you watch any of the "Making Of" features on Pixar DVDs, you cannot help but come to the conclusion that most of the employees put a lot of themselves into their work and enjoy it immensely and passionately. (Of course, I don't suppose anything that reflects poorly on the company would be included anyway.)

  • Report this Comment On June 03, 2010, at 2:28 PM, TMFKris wrote:

    Good timing with summer release. Kids will be just out of school and revved for fun. A few weeks later they'll be bored and their parents will be ready for a movie-provided respite.

    Kris (TMF copyeditor)

  • Report this Comment On June 03, 2010, at 4:16 PM, crazyims wrote:

    How about some useful information such as where the earnings are now ($178 million as of Monday), what the street forecasted and will Shrek be like Dragon and meet forecasts or not? How is the add on sales going - I see more Shrek adds for McDonalds than I see Toy Story trailers on TV.

    If you want to talk movie details then I ask what is a Barbie doing in Andy's toybox?

  • Report this Comment On June 03, 2010, at 4:39 PM, gsabc wrote:

    DWA won't be successful long-term unless Katzenberg et al realize that people want storylines and characters they can empathize with and animation that doesn't look like something off their XBox. I'll take Pixar's quality of story and animation over DreamWorks'' quantity and "go for the gross" story gags any time. Shrek's Oscar over Monsters, Inc. was solely an anti-Eisner vote.

    There's a reason why it has been eleven years since Toy Story 2. Pixar has been waiting for the right plot and will not make a sequel without one, no matter how successful the original. DWA would have just whipped out a derivative story and plunked down the same old gags within two years at most.

  • Report this Comment On June 03, 2010, at 7:45 PM, esxokm wrote:

    I think Disney shareholders do have to worry about the performance of Shrek as it relates to Toy Story 3.

    Before the new Shrek, I would have agreed that Toy Story 3 was assured of megahit status. Now, will it simply come in as a mere "hit"?

    In theory, there should be so much demand for the project because of the time between sequels and the adoration equity intrinsic to the story.

    However, if Shrek only made $70 million-odd dollars in its opening, does this mean there is now a limit for Toy Story 3's potential? It is possible, and absent any other information -- and acknowledging that none of us here can predict the future -- I think some concern on the part of Disney shareholders is warranted.

    Of course, in the end, it sort of doesn't matter. As of today, the stock still hasn't been changed that much post the Pixar purchase...and I don't think Toy Story 3 will help the situation.

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