DreamWorks SKG

DreamWorks SKG, American entertainment studio based in Playa Vista, California. The studio, with the exception of its animation division, was acquired by Paramount in 2005. DreamWorks was formed in 1994 as a partnership between three of the most successful figures in the American entertainment industry: director and producer Steven Spielberg, who has created several of the top-grossing films in history; entertainment executive Jeffrey Katzenberg, who was formerly the film-studio chief of The Walt Disney Company; and recording-industry pioneer David Geffen, who had served as vice-chairman of Warner Bros. film production company and founded Geffen Records. DreamWorks produces live-action and animated films, television programmes, and multimedia entertainment.

The fame and proven successes of the company’s founders enabled DreamWorks to raise capital quickly and to sign lucrative joint-venture agreements with other entertainment companies. Soon after its founding, the studio signed a deal with the communications corporation Capital Cities/ABC (now ABC) to create a new television studio. In 1995 DreamWorks reached a joint-venture agreement with the computer software company Microsoft Corporation to form a new multimedia software company, DreamWorks Interactive. That same year the company signed a ten-year film licensing agreement with the cable television network Home Box Office (HBO).

DreamWorks further expanded the scope of its business ventures in 1995 and 1996 by forming a variety of high-profile partnerships. The company entered into an agreement with the computer manufacturer Silicon Graphics to develop the DreamWorks Digital Studio to produce multimedia entertainment. It also launched a line of DreamWorks toys in association with the toy manufacturer Hasbro, and joined Sega Enterprises, a leading manufacturer of video games, in building a chain of video-game arcades throughout the United States, known as GameWorks.

In the autumn of 1996 DreamWorks claimed its first major success when its television series, Spin City, became a hit on ABC. However, other early projects were less successful than anticipated. A television series, Champs, was cancelled in early 1996 after only six episodes. Although the film division expected to have eight films in cinemas by the end of 1997, it had released only three by that time—The Peacemaker, starring George Clooney and Nicole Kidman; Amistad, starring Anthony Hopkins and Morgan Freeman; and Mouse Hunt, starring Lee Evans and Nathan Lane. In 1995 the DreamWorks music division, DreamWorks Records, agreed to pay approximately US$40 million to have British pop singer George Michael released from his contract with Sony. However, sales in the United States of Michael’s first DreamWorks album, Older (1996), were disappointing. DreamWorks later sold its music division to Universal Music in 2003. DreamWorks’ plans to build a new studio complex near Los Angeles International Airport also encountered difficulties when they were delayed due to the protests of environmental groups, who argued that the area was ecologically sensitive. DreamWorks abandoned the project in 1999.

Despite these early setbacks, analysts widely expected DreamWorks to become the first new studio to succeed in Hollywood since the 1940s. Most of this confidence in the company rested on three factors: its huge financial reserves, the reputations and past successes of its three founders, and the wealth of talent the studio had hired from other entertainment companies. These expectations were partially borne out by DreamWorks’ later achievements, led by its animation division, which in competition with rival studio Pixar revitalized the animation genre. After the computer-generated comedy Antz (1998), the conventional animation The Prince of Egypt (1998), and the clay-animation film Chicken Run (2000) by Nick Park, DreamWorks released Shrek (2001), which went on to become one of the highest-grossing cartoons of all time. The sequel Shrek 2 (2004) enjoyed similar box-office success, as did the undersea animated film Shark Tale (2004). Buoyed by the success of these films, DreamWorks floated DreamWorks Animation on the stock market in 2004 and the newly independent company, headed by Katzenberg, announced its aim to make two animated features each year, among them the new Wallace and Gromit film The Curse of the Were-Rabbit (2005). DreamWorks Pictures also enjoyed major success with Spielberg's live-action World War II drama Saving Private Ryan (1998) and War of the Worlds (2005), as well as with American Beauty (1999), Gladiator (2000), and A Beautiful Mind (2001), each of which, in consecutive years, picked up the Best Picture Academy Award.

In 2005, however, after a series of disappointing financial results due to lower than expected box-office returns and DVD sales, DreamWorks SKG was acquired by rival studio Paramount. DreamWorks Animation remains an independent public company.