Entertainment Product Market Study Introduction To Marketing Full Sail University June 2010

1. Theo Skudlark June 24, 2010
Introduction To Marketing
Full Sail University

2. DreamWorks Studios, LLC.
The Company
DreamWorks Studios is a motion picture company formed in 1994 by Steven
Spielberg, Stacey Snider and The Anil Dhirubhai Ambani Group. The Walt Disney
Company holds exclusive worldwide distribution agreements with the studio. Films Such
as “The Peacemaker,” “Amistad,” “Saying Private Ryan”, “American Beauty”, and all of
the “Shrek” features established the studio as a powerhouse of motion picture production.
By 1999 the company had totaled over $2 billion dollars in international box office ticket
sales. The company also offers television programming and an immersive Internet
experience through its web sites.
The company is financed by Reliance BIG Entertainment and a syndicate of
banks arranged by J.P. Morgan Securities. The Limited Liability Company is the parent
company for its subsidiary DreamWorks Animation SKG.
The animation company is publicly held under its subsidiary DreamWorks
Animation SKG and traded on NASDQ under the DWA ticker symbol and currently has
a 1 to 1.5 million average volume in shares. The current trading price of its common
stock is $28.35 per share. The companies EPS position is 0.63.
Business
The company generates its main source of revenue from box office ticket sales
and an exclusive line of merchandise branded by many of its original motion pictures.
DreamWorks Animation SKG offers an exclusive line of animated motion pictures and a
merchandising franchise that is much larger than is parent company. Motion Pictures on
multiple formats to Children’s Toys are what the company markets and offers as its line
of products. The Company also co-operates with other companies under license
agreements to promote its line of products.

3. Market
Because the company comingles many titles that are targeted to specific markets
the geography for the companies marketing is worldwide. Forty percent of its revenue
stream comes from countries outside the United States. The parent company targets the
entire global market while the subsidiary targets the same market but more strategically
children, young adults and parents. Concluding that the demographic would be suited to
communities that are family orientated. The psychographic would be primarily children
from ages 2 through 13 whereas most of the titles are rated PG.
Competition
Lions Gate Entertainment a motion picture company that offers similar titles and
programming of theatre and home entertainment. The company although has
more titles in its catalog is worth a considerable amount less than its competitor.
WPTE Enterprises an entertainment company that specializes in gaming content
programming. While its product line varies, the company appeals to very similar
markets. In valuation the company is a fraction of the powerhouse of its
competitor DreamWorks.
4Kids Entertainment is a licensing company that specializes in product placement
exclusively geared towards the children’s market. While the company’s products
do not directly compete with DreamWorks the company competes with
DreamWorks distributor, The Walt Disney Company for retail licensing
agreements. There is no public record of the company’s finances that I can
compare; the company appears to be a privately held firm.
DreamWorks Studios and DreamWorks Animation SKG are the realization of one mans
vision. The parent company entails four officers and one principal partner while the
subsidiaries corporate governance is comprised of ten officers on the board of directors.
The company employs 1,900 persons and has a very comprehensive benefit and
investment package.

4. Student
Name:
_Theo_Skudlark_____________
Date:_June
20,
2010____
SWOT
Analysis
for:
DreamWorks
Animation,
SKG.
Strengths
Weaknesses
1. Currently
owned
by
Paramount
Pictures
and
Viacom
Inc.,
DreamWorks
Animation,
SKG.
has
strategic
distribution,
promotion
and
service
alliances
internationally
and
retains
control
over
its
intangible
assets
of
feature
films.
(1)
2. The
company
has
produced
eighteen
animated
films
to
date,
three
of
which
have
been
the
highest
grossing
animated
films
for
the
respective
years
of
release.
(2)
3. The
company
has
1.1
million
dollars
in
equity
and
has
earned
profitable
revenue
for
each
year
that
the
organization
has
been
established,
while
the
majority
of
its
competitors
operate
at
a
deficit.
(3)
4. The
lack
of
diversified
business
could
have
adverse
effects
on
the
company
because
its
focus
is
confined
to
animated
family
entertainment.
(4)
5. Animated
films
are
expensive
to
produce,
uncertainties
inherent
in
their
production
could
result
in
the
expenditure
of
significant
amounts
on
films
that
are
abandoned
or
significantly
delayed.
(5)
6. The
production
and
marketing
of
animated
films
and
other
properties
is
capital-­‐intensive,
the
capacity
to
generate
cash
from
the
films
may
be
insufficient
to
meet
anticipated
cash
requirements.
(6)
Opportunities
Threats
7. DreamWorks
Animation,
SKG.
is
a
publically
held
company;
anyone
can
purchase
Class
A
common
stock
through
various
brokerage
firms.
(7)
8. Live
Entertainment,
Virtual
Environments
and
Television
programming
syndication
could
diversify
and
expand
the
company’s
valuation
and
market
share.
(8)
9. DreamWorks
Animation,
SKG.
Expansion
into
the
stereoscopic
3D
market
and
potential
Theme
Park
in
Dubai
could
expand
the
company’s
consumer
awareness
and
profit
margins.
(9)
10. The
current
economic
climate
has
proven
a
decrease
in
3D
box
office
ticket
sales.
(10)
11. There
are
limited
amounts
of
screens
capable
of
showing
3D
features
and
many
theater
companies
will
not
embrace
the
technology
due
to
limited
amounts
of
3D
features
available
to
validate
the
expense
of
retrofitting
facilities
for
accommodation.
(11)
12. Piracy
and
international
copyright
law
violations
threaten
the
motion
picture
industry
as
a
whole.
Furthermore
economic
disintegration
within
the
United
States
could
result
in
a
melt
down
of
the
entire
industry.
(12)

5. Supporting Facts and Figures:
1. Currently owned by Paramount Pictures and Viacom Inc., DreamWorks
Animation, SKG. has strategic distribution, promotion and service alliances
internationally and retains control over its intangible assets of feature films.
(DreamWorks Animation, SKG. 2009)
2. The company has produced eighteen animated films to date, three of which have
been the highest grossing animated films for the respective years of release.
(DreamWorks Animation, SKG. 2009)
3. The company has 1.1 million dollars in equity and has earned profitable revenue
for each year that the organization has been established, while the majority of its
competitors operate at a deficit. (DreamWorks Animation, SKG. 2009)
4. The lack of diversified business could have adverse effects on the company
because its focus is confined to animated family entertainment. (DreamWorks
Animation, SKG. 2009)
5. Animated films are expensive to produce, uncertainties inherent in their
production could result in the expenditure of significant amounts on films that are
abandoned or significantly delayed. (DreamWorks Animation, SKG. 2009)
6. The production and marketing of animated films and other properties is capital-
intensive, the capacity to generate cash from the films may be insufficient to meet
anticipated cash requirements. (DreamWorks Animation, SKG. 2009)
7. DreamWorks Animation, SKG. is a publically held company; anyone can
purchase Class A common stock through various brokerage firms. (DreamWorks
Animation, SKG. 2009)
8. Live Entertainment, Virtual Environments and Television programming
syndication could diversify and expand the company’s valuation and market
share. (DreamWorks Animation, SKG. 2009)
9. DreamWorks Animation, SKG. Expansion into the stereoscopic 3D market and
potential Theme Park in Dubai could expand the company’s consumer awareness
and profit margins. (DreamWorks Animation, SKG. 2009)

6. 10. The current economic climate has proven a decrease in 3D box office ticket sales.
(Regal Entertainment Group / United Artist Theaters 2009)
11. There are limited amounts of screens capable of showing 3D features and many
theater companies will not embrace the technology due to limited amounts of 3D
features available to validate the expense of retrofitting facilities for
accommodation. (DreamWorks Animation, SKG. 2009)
12. Piracy and international copyright law violations threaten the motion picture
industry as a whole. Furthermore economic disintegration within the United
States could result in a melt down of the entire industry. (DreamWorks
Animation, SKG. 2009)
Conclusions:
DreamWorks Animation SKG has positioned itself as a leader in animated feature
films. With the strength of Paramount Pictures, one of the major motion picture
production studios, and innovators such as Steven Spielberg and David Geffen as the
organizational backbone is likely that this company will experience longevity and growth
through its featured animated motion picture releases and stockholder equity in the years
ahead.
The lack of diversification in the DreamWorks Animation business model could
limit the expansion of the company into untapped markets and revenue streams.
Production adaptation of stereoscopic 3D features; while innovative this could also be the
rope by which the company commits economic suicide. Furthermore with the escalating
expense of production and marketing, decline in 3D feature box office ticket sales and
international piracy the company must be weary of the return on investment every
production embodies and advocate anti piracy laws.
While most of its competitors operate at a deficit or financial loss, DreamWorks
Animation has profited even in one of the most difficult economic environments in
decades. This statistic and its schedule of upcoming unreleased titles has positioned and

7. proven that DreamWorks Animation SKG continues to be an innovator in the animated
feature arena and motion picture industry.
There is tremendous risk investing in entertainment ventures and the competition
is additionally fierce. With the minds that brought us part of the Star Wars Trilogy and
Geffen Records leading the way, I can trust that these individuals hold the vision. Avant-
garde and lacking diversification, nonetheless there is zealous within their creative
concepts. They have proven foresight with past ventures with the icons they have
innovated and contributed to American culture. It is clear that they know what they are
doing and where they are going. With that said I would certainly invest into DreamWorks
Animation SKG however diversification would be my primary objective if I were ever
elected to the board of directors.

8. Product
Shrek is a flagship brand of DreamWorks Animation
SKG. A series of animated feature films that has four
full-length motion pictures in addition to made for
television productions.
The competitive advantage of the Shrek brand and what
differentiates it from the competition is its original
characters. No other animated features or characters have
been able to achieve paralleled success through a
multitude of sequels besides that of Walt Disney’s Mickey
Mouse.

9. Product Benefits & Features
Shrek’s Benefits and Features:
The benefits of Shrek is the story telling capacity. The
motifs present action, drama, comedy and fiction, which
present stories with an ethical foundation and solid moral
examples. There are valuable moral lessons that are
presented in each of the stories that speak to both
children and adults alike. DreamWorks has
successfully captured the realm of family
entertainment with its Shrek features.
The merchandising of the brand includes products and
material that are educational in addition to entertaining.
This synergy is a very strong accomplishment whereas it is
difficult to capture the attention of children. Furthermore
entertain children while at the same time teaching them
valuable traits that have the potential to be carried over and
beyond into there lives.

10. Target Market Segment
Demographic:
The target market for Shrek ‘s animated features is family entertainment and comedy.
More specifically the animation demographic targets the 12 – 17 age bracket of both
male and female market segments. Each of the films story lines present scenarios that
also target an adult demographic. Thus the films appeal to more than merely one
specific market segment. DreamWorks has succeeded in achieving total market
saturation by the scale of Shrek’s demographic.
Geography:
The films have been adapted to 44 languages and have global distribution channels
covering the majority of westernized nations (1).
Psychographic:
Upwardly mobile teenagers who enjoy comedy and can afford to see movies. The
median family income is within the middle to upper class. Respectively representing 79
million people or 28% of the entire U.S. population (2).
Sources: 1. Shrek Languages. http://www.subtitleseeker.com
2. DreamWorks Psychographic. Eagle Eye DVD Promotions Plan. Page 6.
http://www.georgeozuna.com/mktg/EagleEye.pdf

11. Pricing
• The median price for Shrek DVD’s and Blu-ray is between $10.00 and $20.00.
• The median U.S. box office ticket price for an average film is $7.50.
• The median U.S. box office ticket price for 3D films is $15.00.
• The median U.S. box office ticket price for Imax-3D is $18.00.
One of Shrek’s competitors Walt Disney / Pixar’s “Toy Story” was used in
comparison. The findings indicate that competitive pricing for DVD’s and Blu-ray
vary among retail competitors and do not reflect the pricing options set forth by
DreamWorks or Walt Disney / Pixar. Furthermore movie theaters compete for box
office sales, representing a standardized ticket price that does not reflect a
particular title. These pricing options represent the Status Quo pricing strategy
where as film companies operate different from retailers
and theatres. Theaters and retailers often use the Skim
Pricing Strategy to leverage competition.
Sources: Amazon.com, BestBuy.com, National Association Of Theater Owners, SlashFilm.com
Vs.

12. Placement
DreamWorks SKG has an exclusive distribution agreement with Paramount
Pictures, a subsidiary of Viacom Inc. This is because Paramount Pictures acquired
DreamWorks SKG and utilizes an already established global distribution channel
with exclusive retailers of Paramount’s discretion.
DreamWorks SKG however retains all other rights to exploit its films, including
promotional tie-ins, promotional rights, merchandising and music publishing
with respect to each of its titles.
The global reach of Paramount and Viacom’s distribution channels has
successfully saturated DreamWorks target market. This has propelled Shrek to be
DreamWorks most successful brand and the largest grossing animated films in
history.
Sources: DreamWorks SKG 2009 Financial Report and SEC filings.

13. Promotion
DreamWorks uses multiple faucets to promote its films. Shrek has established
co-operative promotions and merchandise-licensing agreements with Mc
Donald’s restaurants, Heinz Food, Mars Inc, The U.S. Forest Service, Hasbro,
Activision, X-Box and Nintendo in addition to clothing manufactures for
exclusive Shrek branded products. These products promote the films in
addition generate revenue for DreamWorks SKG outside of box office ticket
and DVD/Blu-ray sales.
DreamWorks utilizes Print Advertising in magazines and out door media as
well as Internet, Television and Radio promotions to promote its films and the
Shrek titles.
Sources: PRNews Promotional Partners Press Release (DreamWorks SKG May, 2010)

14. Outdoor Advertisement

15. Media Mix
DreamWorks advertises its Shrek features with outdoor advertising in
heavily trafficked areas such as posters in Shopping Malls, Billboards
and Bus Kiosks near movie theatres and DVD / Blu-ray retailers.
The print ads appear in Fashion and Beauty publications such as
Vman magazine a subsidiary of BASH Publications. The ad campaign
for Shrek Finally Ever After, created noteworthy controversy. (1)
DreamWorks utilizes Clear Channel Communications and Turner
Broadcasting affiliates for an abundance of its U.S. Television and
Radio promotional campaigns.
Yahoo was innovative with its online marketing campaign through the
technology used in its development of ads for the Shrek features.
The vehicles chosen and affiliated promotional partners represent the
core demographic of Shrek’s market segment. Therefore the synergy
was relevant within the execution of Shrek’s marketing campaigns.
Sources: 1. Vman Magazines ad campaign controversy http://www.imdb.com/news/ni2085658/
2.

16. Summary
After extensive research upon DreamWorks SKG and the Shrek titles I have concluded that
the Shrek brand combined with the promotional affiliates and campaigns are one of the
finest marketing and creative synergies the entertainment industry has witnessed. Shrek
while being the flagship for DreamWorks SKG is only a portion of the company’s
powerhouse of motion picture titles and animated features.
While DreamWorks SKG’s parent products are the feature films, the merchandising
associated with the Shrek Brand is vast. This presentation only touches the tip of the iceberg
of how truly extensive the Shrek franchise and other Brands under the DreamWorks
umbrella are. I hope that this has presented a portion of the magnitude and scope of what
one mans vision can accomplish.
Mr. Spielberg’s contributions to the world have enriched the lives of millions. I like many
others anticipate what he and his group of creative minds will think of next.

17. SourcesShrek Demographics
http://lexicalist.com/search.cgi?s=shrek
Shrek in multiple languages
http://www.subtitleseeker.com
A Shrek Psychographic
http://www.dove.org/news.asp?ArticleID=72
Shrek “Go Green” Campaign
http://www.clickz.com/3626771
DreamWorks Psychographic. (Page 6) Eagle Eye DVD Promotions Plan
http://www.georgeozuna.com/mktg/EagleEye.pdf
Amazon
http://www.amazon.com/s/qid=1277604527/ref=sr_pg_2?ie=UTF8&keywords=Shrek&bbn=130&d=1&rh=n%3A130%2Ck%3AShrek&page=2
Best Buy
http://www.bestbuy.com/site/olstemplatemapper.jsp?
_dyncharset=ISO-8859-1&_dynSessConf=-8273464082132008116&id=pcat17071&type=page&ks=960&st=Shrek&sc=Global&cp=1&sp=&qp=crootcategoryid
%23%23-1%23%23-1%7E%7Eq536872656b%7E%7Enccat02015%23%230%23%23v&list=y&usc=All+Categories&nrp=15&iht=n
National Association Of Theater Owners
http://www.natoonline.org/statisticstickets.htm
Slash Film
http://www.slashfilm.com/2010/03/25/3d-ticket-prices-are-on-the-rise-effective-this-weekend/
Promotional Press Release: Advertising partners for Shrek the final chapter
http://www.prnewswire.com/news-releases/dreamworks-animation-announces-ogre-whelming-promotional-partner-and-licensee-support-for-shrek-forever-after-94540789.html
Vman Magazine ad campaign controversy
http://www.imdb.com/news/ni2085658/
Yahoo Innovations
http://www.marketingvox.com/shrek-ad-debuts-on-yahoos-new-mobile-html5-based-platform-046993/
DreamWorks Financial Data: DreamWorks SKG 2009 Financial Report and SEC filings
http://ir.dreamworksanimation.com

18. References:
DreamWorks Animation, SKG. 2009 Annual Report and 10-K Sec filings.
Retrieved on June 8, 2010 from
http://www.dreamworksanimation.com
Regal Entertainment Group, United Artist Theaters & Edwards Cinemas 2009 Financial
Report. Retrieved on May 20, 2010 from
http://investor.regmovies.com/phoenix.zhtml?c=222211&p=irol-irhome
David Geffen & Geffen Records History
Retrieved on June 20, 2010 from
http://www.answers.com/topic/geffen-records

19. Sources:
DreamWorks History
http://www.dreamworksstudios.com/about/history
DreamWorks Animation
http://www.dreamworksanimation.com
Investor Guide
http://www.investorguide.com/stock.php?ticker=DWA
Hoovers A D&B Company
http://www.hoovers.com/company/DreamWorks_Studios/ctxiff-1.html