Sound crazy? It might, especially when you consider the vibrancy of the comic book business and consumers' appetites for pop-culture fare. And yet, there are at least two reasons for the company not to cash in directly: IDW and APE Entertainment. DreamWorks has licenses with both publishers.
IDW is publishing books based on DreamWorks' adaptations of the various Jay Ward characters (i.e., Rocky and Bullwinkle, Mr. Peabody and Sherman, etc.), while APE has licenses for Kung-Fu Panda and Penguins of Madagascar, and has published a four-issue Megamind miniseries. Trade magazine ICv2 has confirmed that DreamWorks intends to keep honoring both agreements.
Smart move, Tim says. Comics publishing is getting riskier; as more titles flood the market, readers may cut back in response. ICv2 reports that in December, only three of the top 300 books sold 100,000 or more copies to stores. Only one eclipsed that threshold in January.
In licensing to IDW and APE, DreamWorks mitigates the risk of entering the comic book business at the wrong time while still cashing in on some of the brand equity of its intellectual property. A prudent mix investors should appreciate, Tim says.
Now it's your turn to weigh in. Have you read any of DreamWorks' licensed titles? Or would you rather see DreamWorks cashing in directly, as Time Warner and Walt Disney have? Please watch the video to get Tim's full take on the state of the comic book business, and then leave a comment to let us know where you stand.
Be a retirement hero
Happy endings aren't always the stuff of Hollywood and comic book legend. Write your own fairytale ending by learning how to buy shares in solid businesses and keep them for the long term. Unsure of how to get started? In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.