How did you spend last weekend? Were you out shopping, by any chance? Perhaps down at the local Target
DreamWorks Animation issued a release promoting the performance of Shrek 2 for the first weekend of November. Slightly more than 12 million units of the home video were sold. DVDs predictably dwarfed the VHS tapes as a percentage of units moved, with 11 million discs now in the hands of consumers. In terms of gross dollar amounts, the company estimates that it raked in $185 million. In contrast, the first Shrek feature moved about 7 million discs and tapes during its initial three-day debut.
There's no question that DreamWorks Animation is here to stay and that it offers some serious competition for Pixar
Will DreamWorks turn into a force similar in magnitude to the Pixar brand? It's a tantalizing question, and difficult to answer. There is obviously a lot of interest in animated fare judging by the public's taste, which means that the supply of computer-generated cartoons is going to increase in the next several years. In theory, movies don't have to be a zero-sum game, but in reality they are; conglomerates such as Viacom
Of course, anyone who purchased shares of Pixar years ago as a speculative bet has been well rewarded. The difference here is that times are not the same, and there's no guarantee that the love of Pixar-like products will sustain itself into the future. There's also the threat that Pixar could enter a phase of maturing growth (which certainly isn't likely, but all cons must be explored when it comes to investing).
Still, I think both Pixar and DreamWorks Animation are worthy long-term bets. Pixar is a strong brand, but DreamWorks is off to a great start as a company now beholden to the demands of Wall Street. It will be fascinating to see what investor sentiment tells us about the prospects for both.
More animated articles on DreamWorks Animation and Pixar:
Pixar , Time Warner, and Best Buy are all recommendations in Motley Fool Stock Advisor , a newsletter which will give you excellent ideas for market-beating investments. Check it out today, risk-free for six months.
Fool contributor Steven Mallas owns none of the companies mentioned.