Dreamworks Chief Disappointed in Slow Pace of 3-D

Jeffrey Katzenberg , CEO of DreamWorks Animation SKG, said Tuesday he was disappointed at the slow pace in which movie theaters across the country were rolling out digital and 3-D technology.

"Things haven’t progressed as well as I had hoped," Katzenberg said during a conference call with analysts.

"I feel as though things have dragged along, and it’s been pretty disappointing,"

Katzenberg, a huge advocate of 3-D films, has pledged to spend an extra $15 per film to make all future films in 3-D.  For Dreamworks, the commitment equates to an extra $30 million a year.  

Katzenberg said he believes his company will see strong returns on its 3-D investment, based on forecasts for ticket prices and the number of theaters who will implement 3-D technology by spring 2009, when Dreamworks’ first 3-D film, “Monsters vs. Aliens”, is released.

"But whether or not it achieves the fullest potential and outside goals I’ve set for ourselves and challenged exhibition with, is the thing up for grabs right now," he said.

“We have indicated that we would like to see 5,000 3-D screens domestically by the time we released ‘Monsters vs. Aliens,’ but we need to make sure that major theaters chains are committed to getting these screens in the next 30 days or it’s unlikely we will get all 5,000 screens," said Dreamworks CFO Lew Coleman, during a Reuters interview.    

Katzenberg had hoped by now that a $1.1B financing deal between the Digital Cinema Implementation Partners (DCIP), Cinemark Holdings Inc, AMC Entertainment Inc and various Hollywood studios would be completed.  The deal would fund the deployment of cinema digital technology, which would allow theaters to add 3-D technology.   Once it begins, the DCIP digital upgrade is expected to take about three years to equip 14,000 screens.  

Initially, the DCIP hoped to finalize the deal by the end of 2007, but various issues prevented reaching a final agreement.  DCIP CEO Travis Reid declined comment on Tuesday, but said last month he hoped to finalize a deal in the second quarter of this year.   

In the United States, about 4,000 of the 37,000 cinema screens are equipped with digital technology, with slightly more than 1,000 using 3-D capable screens.
 
Analysts are concerned there will not be an adequate number of 3-D screens to accommodate all the upcoming 3-D titles from Dreamworks and other studios.

Many in Hollywood look to the success of the 3-D concert movie, "Hannah Montana/Miley Cyrus: Best of Both Worlds Concert Tour," as a model for the future.  The film,, whose tickets sold for $15, grossed nearly $30 million in its opening weekend.

"In terms of getting the big three on board and actively moving forward, I feel as though things have dragged along, and it’s been pretty disappointing," Katzenberg said.

"If these guys don’t get their act together very quickly in the next 30 days, they’re not going to be able to achieve that goal and it will start to deteriorate quickly. Every week that goes by will be several hundred less screens that will manage to be rolled out in the timeframe," he added.

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