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Wall Street clawed 7.8% from the company’s stock price, which ended the day at $18.55, following Puss In Boots’ lower-than-expected $34M opening weekend. Analysts acknowledged that the film suffered from the blizzard that hit the Northeast as well as an exciting World Series that included a seventh game on Friday. Still, several say they’re frustrated with DreamWorks Animation, which has lost 47.5% of its value over the last 12 months. The weekend performance is “yet another argument supporting our thesis that it is time for the company to revise its film costs structure,” says Susquehanna Financial Group’s Vasily Karasyov — who now believes Puss will gross a maximum of $136M domestically, down from his pre-opening forecast of $201M. “Average attendance per original film has declined by around 20% since 2008,” he adds, even though ”the studio still spends $135M to make a film and $170M to release it.” Janney Capital Markets Tony Wible dropped his domestic box office estimate to $153M from $195M, saying that the weekend shows “the (Shrek) franchise is completely out of momentum.” Barclays Capital’s Anthony DiClemente says he now believes Puss will gross $145M domestically, down from $165M, although ”the film could exceed our moderated estimates” if there’s positive word of mouth. But Lazard Capital Markets’ Barton Crockett says that the anemic tracking results for the film before it opened shows ”either that the marketing did not click, that the decision to open Halloween weekend did not work, or that (DWA) is suffering from more competition than before.” Whatever the problem, BTIG’s Rich Greenfield says that “Puss In Boots is by far (DWA’s) least attended film domestically since its IPO” in 2004, not including the films it co-produced with Aardman Animation. Last week, CEO Jeff Katzenberg said he’d consider the opening a success if Puss grossed at least $33.6M, the previous record for the weekend.
DreamWorks Animation Shares Fall On Disappointing ‘Puss In Boots’ Open
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Would it have made more if more screens were showing the 2D version? How many tickets were sold 3D vs 2D?
All of this talk is irrelevant. There is always s snowstorm, a Super Bowl, a Presidential debate, whatever. The fact is, there was zero demand for this movie, and Dreamworks makes bad film, esp. in Animation. They don’t choose project well aside from THE HELP, and they don’t choose good script on either side.
It certainly isn’t a reflection on the quality of the film. It’s great fun and the cinema scores of A- back that up. Something else is in play.
People are tired of the Dreamworks formula, and after the last two awful Shrek films, they’re tired of Shrek. Sure, the Shrek fans gave the film an A-, but nobody else cared to show up.
THAT’S what’s “going on”.
300 mil in costs? What’s wrong with this equation? Everything.
Why do people always think the first weekend on a kids pic in the fall can predict box office outcome? The weather and world series definitely impacted the grosses, but the will sustain itself over the next few weeks better than everyone expects. Remember when the Polar Express opened to low numbers and everyone predicted it would bomb? It wound up grossing over 170 mil. Besides, with no new family film until Happy Feet 2 (which I don’t think will be as big as the first since the “cute penguin thing” has played itself out), the film will dominate the family market.
Instead of all these excuses about snowstorms and bad marketing and Halloween release dates, maybe the problem is simply that the audiences are just tired of the Dreamworks style of films. KFP 2, Shrek 3, MAD 2, Megamind are all the most recent evidence that the type of films Jeffrey makes (pop culture, sarcastic, and shallow) just don’t resonate with audiences. Dragon was unlike other Dreamworks films in that it went much deeper than the typical Dreamworks sarcasm and self-regard and found a genuine heart and emotion which nearly all DW films (barring Shrek 1) seem to lack.
Sequels and spinoffs only compound the problem. Maybe Jeffrey will fire himself as creative head of the studio (make no mistakes about it, that is his role) and find someone who actually lets filmmakers make films. Doubtful but losing almost 50% value of the stock in a year should be a fair indicator that it’s something he and the board of directors need to consider very seriously.
I agree with this. Dreamworks was able to fool a few people early when everybody lumped all animation into the same boat, but the I think the audience has picked up on the difference in quality. The Dreamworks stuff simply has no soul: they learned all the wrong things from the success of Shrek (1). They thought we loved it for the sarcasm and the crass humor, when we actually loved it because of the likable characters and good story. They’re reaping the harvest of that misinterpretation.
Uhhhh…do you have kids? I do. I took them to see PIB yesterday. They loved it. It’s a fun movie, great look and animation, more laughs than most adult comedies offer. It will have legs and perform just fine, my kids have already gotten their grandfather to agree to take them again.
Also, I don’t know that leaning on Kung Fu Panda 2, which was the highest grossing animated film of the year, as an example of failure really makes your case. That was a great movie as well, lots of fun.
And,no, I’m not a studio shill, no dog in the fight, just a guy who sees most of the family fare because I have small children.
Funny PIB is now a Shrek product!
Yet another reason why Hollywood and Wall Street shouldn’t work together. Wall Street is too reactionary and Hollywood is becoming more and more focused on what investors think versus what the consumer wants. These two need to be separated for good.
^^^^^. THIS
But it ain’t gonna change. Money talks. And too many Wall Street people have either invested in Hollywood studios or part own Hollywood studios as sleeping partners or both.
Hollywood has always been involved with corruption of some kind whether it was the mob during Sinatra times investing in movies to make sure Sinatra worked or it was the money men who came in the 80′s.
The only problem here is that before, Hollywood had a high standard that a movie had to be, whether it was romantic feel good or Oscar bait.
Now? It’s lowest common denominator and people are turning away!
Were it not for the Northeast snowstorm, “Puss In Boots” probably would have made $40-$41 million in it’s opening weekend.
Had there been no Northeast snowstorm, and had the World Series ended before Friday (October 28th), the box-office total might have been around $45 million.
I think you’re right. I gaurente you that it would have made $40 million had it not been for the snowstorms. I expect a really small decline next weekend as lots of people who wanted to go but were snowed in will make thier way.
Hollywood is such a bunch of idiots. One bad opening due to weather and baseball and any number of unrelated factors and they declare the whole film a failure. It will probably do well over $200 million when all is said and done.
of course it’s a Shrek product! Why do you think it was made? Because the audience desires to see a funny cat with a sword? It was building on the Shrek franchise by having a prominent character from 3 of the films get his own franchise. It’s just a shame that audience’s association with Shrek did it no favours at all. Hopefully this well reviewed film gets a second chance.
So Puss In Boots wins the next two weekends (which will be fairly easy given the lack of family titles until November 18th), and it does Madagascar 2 money overseas. That would put the film in the top 15 worldwide for the year. Given that the movie costs less than most tentpoles and Shrek actually drives more toy sales than Tron, Hop, or Smurfs (combined), I would actuall buy calls on DWA. My guess is whomever these brilliant analysts are sandbagging for is buying calls on DWA too.
Ummm…do you realize that Dreamworks Animation is independent of Dreamworks? Clearly you don’t.
Writing from Australia i have to say i am surprised by the level of pessimism in the US domestic market. PIB just set a record weekend gross and will make $150 million in the US and probably another $300 million internationally. It will most likely go on to sell a few million DVD’s (kids under 10 are not habitual downloaders) at $20 a pop. All up over 12 months it will probably make around $600 – 700 million disregarding other licensing and merch. Is that really a failure?
I think people need to chill out a little and wait until the full picture emerges before declaring it a failure or success.
Let’s clear something up here. David’s article is not about what PIB will do over the course of its lifetime.
This article is about IMMEDIATE RESULTS vs. EXPECTATIONS. The film was expected to bring in a certain profit. Those profits bring yields to investors. Those expectations weren’t met, so there are some angry investors out there.
That’s it. PIB probably will bring in a healthy profit when all is said and done. But that doesn’t satisfy flighty, impatient investors. They will have pulled their money out of DWA by DVD street date.
Oh, boo hoo. My heart bleeds for these pampered 1%’ers. I’m supposed to care if Hollywood goes broke while they live like kings?
Hang in there doomsayers. Wait til act 3!
obviously you have not seen kungfu panda 1 and 2. More heart and good storytelling than any Pixar movie.
Obviously you haven’t seen any Pixar movies.
I thought computers were getting more powerful and was supposed to ease the work of their users, so how do they spend 135 million in an animation pic? Are Voice Actors asking that much now that it pushes the budget over a 100 million? If a Computer Animator, Sound Technician, ect, gets paid a $100/hr, he would have to work 1,350,000 hrs to earn 135 million.
Computers are more powerful, but they still don’t draw. Humans draw with computers, but the humans still need to get paid. If a 90 minute movie has 150,000 frames in it, an animated feature has 150,000 completely rendered images in it. If you don’t want each of those 150,000 rendered images to look like crap (the hair should look like hair, the eyes should glisten like real eyes, the geometry and physics of props feel real, etc.), you have to employ many people to create each frame (not just one guy working 1.35 million hours). The amount of work is far greater than any live-action picture; which is why most animated features take three years to complete. That is 6,000 hours of work per crew member, and if you haven’t stayed to watch the end credits of an animated feature, you should. It will give you perspective on how many people it takes to make each frame possible. $135M for a 90 Minute animated feature is not really outrageous. $215M for a live-action western is outrageous, but $135M is about par.
I tell you one reason it could have underperformed – no self respecting teen boy who got dropped off at the theater wants to say “one ticket for Puss-in-Boots please” in front of a line of people.
Good point, Titleist. They should have just called it “Puss”.
Why in the world do these movies cost so much to make? The amounts are ridiculous! Also, why was there an expectation that this movie had to tie the previous record to be a success? That’s also ridiculous.
All these Wall Street analysts and their $40-50 predictions (wrong-0!) and now they’re dumping on DWA. Needless to say, these idiots don’t know shit about prognostication. This film will roll til the end of Nov. and do it’s damage where they always do–Internationally.
The people in Hollywood really don’t get it do they?
Of all the industries in all the world, I thought the last one to lose touch would be the movie business. But it has.
For one thing, people are tired of getting burned by horrific movies. People are sick of George Clooney playing George Clooney, and Jennifer Anniston playing Jennifer Anniston. People are sick of no-talents like J-Lo. And nobody is content to just look at Angelina Jolie pouting and looking sultry for two hours, contrary to what you think. Yet you just keep churning out trash after trash after trash starring these tired people.
Movie theaters are simply awful now. They are cheap, and the walls are paper thin and people are rude. They are all in vast parking lots in godawful shopping centers or on the tops of mountains or out in the middle of nowhere. And the previews? Jesus H. Fing Christ people. Why do you think that audiences want to sit through 20 minutes of bone jarringly maddening movie previews that are an assault to the senses?
It’s more than the World Series. It’s a million things and if you don’t watch out, you’re going to end up just like all the businesses that abused their customers until they said “enough”. Blockbuster and Netflix for example.
You people had better get back to the business of making a movie an overall experience instead of testing just how much people will put up with to see one of your movies which is where you’re at right now.