DreamWorks Pictures, also known as DreamWorks,LLC, DreamWorks SKG, DreamWorks Studios or DW Studios, LLC, is an American film studio which develops, produces, and distributes films, video games, and television programming. It has produced or distributed more than ten films with box-office grosses totalling more than $100 million each. Its most successful title to date is Shrek 2.
DreamWorks began in 1994 as an ambitious attempt by media moguls Steven Spielberg, Jeffrey Katzenberg, and David Geffen (forming the SKG present on the bottom of the DreamWorks logo) to create a new Hollywood studio. In December 2005, the founders agreed to sell the studio to Viacom, parent of Paramount Pictures. The sale was completed in February 2006. In 2008, DreamWorks announced its intention to end its partnership with Paramount and signed a US$1.5 billion deal to produce films with India’s Reliance ADA Group. Reliance provided $325m of equity to fund recreating Steven Spielberg’s DreamWorks studio as an independent entity. The movie studio is 50% owned by Reliance which is led by Anil Ambani.
DreamWorks’ animation arm was spun-off in 2004 into DreamWorks Animation SKG. Its films were distributed worldwide by Paramount, but the animation studio remained independent of Paramount/Viacom.
The company was founded following Katzenberg being fired from The Walt Disney Company in 1994. At the suggestion of Spielberg’s friend, the two made an agreement with long-time Katzenberg collaborator Geffen to start their own studio. The studio was officially founded on October 12, 1994 with financial backing of $33 million from each of the three main partners and $500 million from Microsoft co-founder Paul Allen.
DreamWorks Interactive is a computer and video game developer founded in 1995, as a subsidiary of DreamWorks SKG.
In 1998, DreamWorks released their first full-length animated feature, Antz.
In 1999, 2000 and 2001, DreamWorks won three consecutive Academy Awards for Best Picture for American Beauty, Gladiator and A Beautiful Mind (the later two with Universal).
On February 24, 2000, Electronic Arts announced the acquisition of DreamWorks Interactive from DreamWorks and merged it with EA Pacific and Westwood Studios. DreamWorks Interactive became EA Los Angeles (EALA).
DreamWorks Records, the company’s record label (the first project of which was George Michael’s Older), never lived up to expectations, and was sold in October 2003 to Universal Music Group, which operated the label as DreamWorks Nashville. That label was shut down in 2005 when its flagship artist, Toby Keith, departed to form his own label.
The studio has had its greatest financial success with movies, specifically animated movies. DreamWorks Animation teamed up with Pacific Data Images (now known as PDI/DreamWorks) in 1996, emerging as the main competitor to Pixar in the age of computer-generated animation and creating some of the highest grossing animated hits of all time, such as Antz (1998), The Prince of Egypt (1998), Shrek (2001), its sequels Shrek 2 (2004) and Shrek the Third (2007); Shark Tale (2004), Madagascar (2005), Over the Hedge (2006), Flushed Away (2006), Bee Movie (2007), and Kung Fu Panda (2008). Based on the films’ success, DreamWorks Animation has spun off as its own publicly traded company.
In recent years, DreamWorks has scaled back. It stopped plans to build a high-tech studio, sold its music division, and has only produced a few television series, Las Vegas, Carpoolers, and On the Lot, for example.
David Geffen admitted that DreamWorks had come close to bankruptcy twice. Under Katzenberg’s watch, the studio suffered a $125 million loss on Sinbad: Legend of the Seven Seas, and also overestimated the DVD demand for Shrek 2. In 2005, out of their two large budget pictures, The Island bombed at the domestic box office, while War of the Worlds was produced as a joint effort with Paramount which was the first to reap the profits.[5]
In December 2005, Viacom’s Paramount Pictures agreed to purchase the live-action studio. The deal was valued at approximately $1.6 billion, an amount that included about $400 million in debt assumptions. The company completed its acquisition on February 1, 2006.
On March 17, 2006, Paramount agreed to sell a controlling interest in the DreamWorks live-action library (pre-09/16/2005; DW Funding, LLC) to Soros Strategic Partners and Dune Entertainment II. The film library is valued at $900 million. Paramount retained the worldwide distribution rights to these films, as well as various ancillary rights, including music publishing, sequels, and merchandising—this includes films that had been made by Paramount and DreamWorks (the music publishing rights were later licensed to Sony-ATV Music Publishing when that company acquired Paramount’s Famous Music subdivision). The sale was completed on May 8, 2006.
In June 2008, Variety reported that DreamWorks was looking for financing that would allow it to continue operations as an independent production company once its deal with Paramount ended later in the year. Most of the backing would come from an Indian investment firm called Reliance ADA Group. The DreamWorks trademarks are owned by DreamWorks Animation, and the new company would need their approval to use the trademarks. In September 2008, it was reported by Variety that Dreamworks closed a deal with Reliance to create a stand-alone production company and end its ties to Paramount.
On March 12, 2007, DreamWorks Animation announced it would release all of its films, beginning with Monsters vs. Aliens (2009), in RealD stereoscopic 3D.
On February 9, 2009, DreamWorks entered into a long-term, 30-picture distribution deal with The Walt Disney Company by which the films will be released through the Touchstone Pictures banner over the next five years. The deal came after negotiations broke off with Universal Pictures just days earlier. However, this deal does not include Indian rights, which will be handled by Reliance, nor does it include DreamWorks Animation, whose films will still be distributed by Paramount.