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Hollywood DreamWorks Animation, creator of the hit Shrek films, is bulking up in a big way.
The company is set to begin an $85 million project to expand its 13-acre Glendale studio, adding 100,000 square feet of new production space and more than 500 jobs in the next two years.
DreamWorks is growing quickly at a time when many other Los Angeles film companies are cutting back in the face of a sputtering economy and a slowdown in film production, delays partly caused by difficult contract talks between studios and Hollywood's biggest actors union.
The new construction largely reflects the company's ambitious foray into 3-D filmmaking, as well as the enduring popularity of family-oriented computer-animated films.
"The business is flourishing, and there is a good reason for [DreamWorks] to be hiring so many people," said Ron Diamond, co-founder of Animation World Network, an animation publishing group. "This is a very positive time for animators."
While some independently produced animated movies have misfired, the leading studios continue to reap big rewards from such films and the merchandising revenue they bring in. Walt Disney's Pixar Animation Studios scored another hit this summer with Wall-E, which has grossed more than $212 million domestically.
DreamWorks' Kung Fu Panda has become the company's second most successful film behind Shrek 2, grossing more than $560 million worldwide.
Calling the film's collections "a significant achievement," Wedbush Morgan Securities raised its third quarter earnings estimates for the company. DreamWorks shares have climbed more than 40 per cent this year after falling 13 per cent last year.
The studio, which typically produces two to three animated movies a year, has seven films in production, including the upcoming Monsters vs Aliens, set for release in March 2009 and a sequel to Madagascar due out in November. The company also is in talks to produce a sequel to Kung Fu Panda.
"We drew the right straw," said DreamWorks Animation chief executive Jeffrey Katzenberg. "We're in the one of part of the entertainment business that just continues to show tremendous growth, in the international market in particular."
With a growing pipeline of movies, the company needs more space to support a workforce that has grown by several hundred in recent years. DreamWorks Animation employs 1,700, including more than 400 at its PDI facility in Northern California.
The new production space will be added onto the existing Lakeside building, which will be renovated. The new facility will house as many as 600 additional digital artists, effects specialists, lighters and technologists with annual salaries of $100,000 to $150,000, the company said.
One goal in the construction and renovation plan is to modernise a campus that was built for the old hand-drawn style of animation, where artists worked in assembly-line fashion, often in separate buildings. Today's digital animation requires simultaneous collaboration among different staffs.
"This will give us a better and more productive space to build a bigger pipeline of feature films," said chief operating officer Ann Daly.
But the primary impetus for the expansion is the company's transition to 3-D. Beginning with Monsters and Aliens, DreamWorks plans to produce both conventional CGI and 3-D versions of its movies.
That requires more people because animators effectively have to render two sets of images, ensuring that frames have proper depth and aren't jarring to the eye. Among other things, the studio is adding special rooms equipped with mobile cameras that enable filmmakers to experiment with shots in a digital setting.
DreamWorks executives say the new approach will increase the average budget of an animated movie 10 per cent to $165 million. But executives believe the investment in 3-D will pay off.
"It changes the experience for moviegoers, it changes the movie theatre environment and it changes the artistic tools that storytellers and filmmakers have," said Katzenberg, a champion of 3-D.
At least 10 3-D digital features are planned for 2009, but the rollout has been slow, largely because of the high cost of converting to digital projectors in theatres. So far, only about 1,000 screens are 3-D ready.
Katzenberg, who had hoped that 5,000 screens would be converted by March for the release of Monsters vs. Aliens, said he's not troubled by the slow pace. He predicts the film will still make a "very good return" even with just 3,000 3-D screens and that by 2010.
Other studios also are banking heavily on the future of 3-D.
Disney, a pioneer of the new format, has said that all of its computer animated movies, including its upcoming feature, Bolt, will be released in digital 3-D.
Another big release expected this year will be James Cameron's Avatar from 20th Century Fox.
"All of these companies," Katzenberg said, "are investing in our future."
- Los Angeles Times-Washington Post News Service
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