I was reading over some remarks Jeffrey Katzenberg -- CEO of DreamWorks Animation
Let's go first with the common ground. Katzenberg wanted to dispel a notion some observers have voiced: that the animation market might burn itself out as the result of a supply chain that's too large. He called this the "single greatest fiction," Reuters reported. Katzenberg went on to say, "It's not as though all of these movies are the same."
I couldn't agree more. Look -- there's always an article somewhere that says "Genre X" has become too ubiquitous a commodity. Who's to say, though, that any particular project is going to fail based on that reason alone? This isn't like the supply of a certain stock, where a buyback might increase the value of the remaining shares. It doesn't work that way. Budget/marketing costs, quality of ad campaigns, distribution reach -- the list of parameters goes on and on.
I would not be hesitant about investing in DreamWorks Animation because of a perception that people will get sick of animated projects. It isn't going to happen.
Now, Katzenberg also said something with regard to the competition: "It takes a huge amount of capital and a tremendous amount of time and resources to create these films. The ability of companies to put all of those elements together are fairly few and far between."
I don't know if I agree with him on this count. I suppose there could be several interpretations to the exact meaning of his comments, but I take it to mean that he thinks DreamWorks Animation and its main competitor Pixar
I do understand that keeping ahead of the sophistication level possessed by audiences does require a lot of capital, but if I were Katzenberg, I would assume that there's always going to be a "next guy" with a "bigger idea." In other words, hubris need not apply. He should never stop worrying that DreamWorks Animation's leadership is about to be usurped. I'm confident that his shareholders don't want a complacent CEO trying to maximize the return on their collective equity. (I highly suggest Mr. Katzenberg read this commentary by Rick Munarriz.)
More on DreamWorks Animation:
What do you think of Mr. Katzenberg's comments? Let us know on the DreamWorks Animation discussion board.
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