Dreamworks Animation Skg Inc Overview Film Studies Essay

Dreamworks life history Skg Inc Overview Film Studies EssayDreamWorks SKG was founded in 1994 by triplet entertainment enthusiasts, Steven Spielberg, Jeffrey Katzenberg, and David Geffen (The Cornell Daily Sun). The SKG appended to the title is representative of the premier letter of each of their last names. DreamWorks SKG is involved in a flesh of entertainment segments much(prenominal) as conduct, medicinal drug, and television. At the duration of its creation, all three individuals were involved in word picture toil. Jeffrey Katzenberg had been recently fired as a studio chairman at The Walt Disney Company, Steven Spielberg had temporarily suspended his lucrative enjoin career, and David Geffen was involved in subscribe to production as well as the record industry. Each of the individuals had something to offer, Spielberg with his experience in making live-action movies, Katzenbergs animation movies, and Geffen with his music back background (Reference for Business).F inancially, the company began with two ane thousand thousand dollars, supplemented with various steep-tech partnerships. A portion of the initial money, $500 million, was contributed by a very kindle Paul Allen, co-founder of Microsoft. Spielberg, Katzenberg, and Geffen also contributed roughly $33 million to the initial money (Reference for Business).During the first few years in business, DreamWorks success was like a roller coaster. Its first snap, The Peace act uponr, was released in 1997, and only reached $12 million on opening weekend. In the years to follow, DreamWorks released several more than successful films such as Mo recitation Hunt, Deep Impact, and Antz. In an attempt to delve into former(a) entertainment segments, DreamWorks released two television shows High Incident and Champs, which were failures. However, in 1996 DreamWorks released spin around City for ABC, which turned out to be rather successful (Reference for Business).By the late 90s and early 2000 s, DreamWorks was pumping out very successful films, many earning fourfold awards such as American Beauty, which received Best Picture at the Oscars in 1999. In 2000, DreamWorks created a new division called DreamWorks lifespan, which produced animated hold films. With the release of Shrek in 2001, DreamWorks started competing head-to-head with Disneys animated movies. In 2004, DreamWorks life history became its give publicly traded company (Reference for Business).COMPETITIVE STRATEGYThe revenue generated by the film industry is massive, with very few players liable for the total. In 2008, the U.S. box spotlight generated nearly ten billion dollars (Ars Technica). The eight major film companies responsible for most of the gross revenue include DreamWorks SKG, Fox Entertainment Group, MGM Holdings Inc., NBC Universal, predominate Motion Pictures Group, Sony Pictures Entertainment, Time Warner, and Walt Disney Motion Pictures Group (Motion Picture Access). Most of the antece dently mentioned film companies are involved in a variety of film production methods including live action, digital animation, animation/live action, hand animation, and stop-motion animation. recognize action films account for the majority of the gross revenue generated domestically, at $8.6 billion with a little over 87% of the share. Digital animation accounted for $1 billion and held over 10% of the share. The early(a) film production methods accounted for the remain 2.4% (The Numbers). Many of the eight major film companies have a foot soldier that produces animated movies. The companies include Fox Entertainment Group with Blue vend Studios, Sony Pictures Entertainment with Sony Pictures biography, Time Warner with Warner Bros. sustenance, MGM Holdings Inc. with MGM energy, and Walt Disney Motion Pictures Group with Walt Disney Pictures (Motion Picture Access).DreamWorks Animation, on the other hand, is its own publicly traded company, strictly dedicated to animated fi lm production (DreamWorks Animation SKG). With this advantage, DreamWorks Animation is attempting to outperform some of the broadly-oriented rivals in that segment. DreamWorks Animation has complaisant this by partnering with various high-tech companies such as Pacific entropy Images (PDI) (Reference for Business). These partnerships allowed DreamWorks Animation glide path to advanced imaging engineering science without the be of recreating the technology in-house. In addition, DreamWorks Animation uses a unmatched governance to create its animations that allows for abase woos (Linux.com). Lastly, DreamWorks Animation can better serve the animation commercialize because of its primary localise on animation. Therefore, DreamWorks Animation is using a stamp down Differentiation strategy to penetrate the film production market.STRATEGY workIn order to be successful in the animated film segment, DreamWorks Animation has made several strategic actions. To begin with, in 199 5, DreamWorks SKG purchased a portion of Pacific Data Images, and collectively the two companies created the movie Antz, which was released in 1998. With the success of the movie, in 2000, DreamWorks SKG acquired most of PDI. The partnership with PDI created competitive advantage for DreamWorks because of the street smart technology they had available for use. DreamWorks has continued to make use of this partnership, and the conglomerate is frequently referred to as PDI/DreamWorks (Reference for Business).Several years later DreamWorks Animation was spun-off from DreamWorks SKG to induce a separate company with the sole purpose of creating animated movies (Reference for Business). This action was to centre on a segment in which the other, larger, film companies only had subsidiaries. By creating a on the whole separate publicly traded company, DreamWorks Animation has a unique advantage in that it can way on what it does overstep, animated movies. In the film industry, the t arget market for animated films varies greatly from that of live-action. This creates an environment where DreamWorks Animation can avoid being trampled by larger companies and focus on a smaller market. DreamWorks Animation has exploited this niche to become a leading player in film animation.DreamWorks Animation has cut costs by creating a unique system for generating its animations. After analyzing requirements, the company resolved that it needed a system that was easily upgradeable, reliable, and had advanced capabilities. To accomplish this, it selected to use a Linux based platform, which is an alternative Microsoft Windows or Mac OSX operating systems. Because calculator generated animation is such a demanding process, it can be quite time consuming to develop. This, in turn, creates huge costs for producers because of the time necessary to make minor changes. With DreamWorks advancements, it was able to reduce the time necessary to create one scene, from three hours to re al-time. Therefore, when changes to the animation were required, they could be made nearly instantaneously (Linux.com).In recent years, an increasing number of film production companies are relinquish 3D movies because of their popularity. In addition, many companies are beginning to realize that 3D movies are cash cows as a result of their high ticket prices. With this in mind, Katzenberg, CEO of DreamWorks Animation, stated that every film DreamWorks makes from at present on will be made in 3D (CG Society). Katzenberg is debauched that 3D films are here to stay this time around, unlike the 3D craze in the 1950s. One of the largest contributing itemors to this renewed interest is the fact that 3D movies can now be produced in a more cost effective manner. This is largely due to the advancements in technology, which allows companies such as DreamWorks to use the latest stereoscopic 3D technology to build its movies from the ground up (CG Society). Katzenberg explains that 3D fil m production will be quite rewarding for DreamWorks AnimationI believe CG animation is in the best position to take advantage of the latest advancement in 3D technology, said Katzenberg. Since our films are made digitally, it presents numerous opportunities for our filmmakers. And by moving into this sphere of influence now, DreamWorks Animation is developing expertise that will differentiate our films and provide a lasting competitive advantage (CG Society).FINANCIAL PERFORMANCEIn maliciousness of a tough economic climate the past few years, DreamWorks Animation has performed above and beyond expectations. In 2009, DreamWorks reported double-digit year-over-year growth in revenue and lettuce per share (Market Watch). Revenue increased by 12% from 2008-2009, and earnings per share increased 10% (Market Watch). The following table demonstrates the performance of DreamWorks Animation for the past few yearsFigure1. Adapted from DreamWorks Animation SKG, Inc. Morningstar Equity Resea rch, p. 2. procure 2010 by Morningstar.In comparison to other film production companies, DreamWorks Animation is quite small in size. The following table compares DreamWorks Animation with the more broadly-oriented Walt Disney CompanyFigure 2. Adapted from DreamWorks Animation SKG, Inc. Morningstar Equity Research, p. 2. Copyright 2010 by Morningstar.COMPETITIVE ADVANTAGE / VRIO FRAMEWORKWhen DreamWorks SKG spun off DreamWorks Animation, this did not create a true first-mover advantage, because it was not the first occupant in the segment. However, it can be thought of as a first-mover strategy in the sense that DreamWorks Animations was an entirely separate company dedicated to animation, unlike the other broadly-oriented film companies. DreamWorks did this to become a significant occupant in the animation segment of the film industry, which created a competitive advantage.DreamWorks Animation partnered with high-tech companies such as PDI, which allowed access to important techno logy. As a result, this created a competitive advantage for the company. The capabilities that DreamWorks Animation has at its disposal are costly to implement in-house, and may be costly and/or difficult to acquire. In addition, because it has majority interest in PDI, DreamWorks Animation can readily employ the capabilities. With the necessary technology in its grasp, DreamWorks Animation is able to grow within its segment.Another efficiency beneficial to DreamWorks Animation is its custom system used to generate the animated films. Because the system environment has been modified to better suit the specific needs of the company, this capability is difficult to match. By using this capability DreamWorks Animation can reduce time-related costs that other industry companies are faced with. This allows the producer to focus on animations, without having to worry about the time needed to edit a scene.STRATEGIC FIT / FUTURE PERFORMANCEAs a focus differentiator, DreamWorks Animation h as penetrated the animation segment of the film industry and has become a pivotal player in that market. With the many supportive capabilities available to the company, it has successfully expanded within its niche, and continues to grow. Strategically, DreamWorks Animation fits seamlessly within the film industry, because of its focus on a single, smaller segment.The arrival of more advanced 3D technologies, and the associated cost savings definitely provides a promising outlook for the company. Because of its advanced capabilities, DreamWorks Animation will be able to fully take advantage of this opportunity. Therefore, in the next few years, the performance of the company should meet and possibly exceed expectations.