Jeffrey Katzenberg Scales Up DreamWorks Animation
Jeffrey Katzenberg is changing DreamWorks Animation from a movie studio with a few big films a year to a multiplatform media business.
He sat down to talk about his latest deal to expand and diversify the studio: an agreement with Netflix to create 300-plus hours of original programming, giving the streaming distributor exclusive access to those shows in every country where it operates.
Katzenberg wouldn't reveal how much Netflix is paying for those shows, but has disclosed that new TV deals are projected to generate $100 million in revenue this year and more than $200 million by 2015.
Working with Netflix sounds ideal for DreamWorks Animation. The studio retains full creative control, and instead of just 'green-lighting' 13 episodes at a time, as a TV network would, it has a commitment for the equivalent of multiple seasons.
Those aren't the only reasons Katzenberg decided to take his content to Netflix rather than a kids-oriented cable TV show such as Nickelodeon. "This is where family and kids are," he said. They're probably "the No. 1 destination for kids," he added.
(Read More: Netflix Strikes Largest Original Content Deal Ever)
Katzenberg made the company's biggest change when he struck a deal with two Chinese media organizations to build a production studio in Shanghai. The new company, Oriental DreamWorks, will produce and distribute both animated and live-action features, as well as animated TV programming.
Recently returned from a trip to China, Katzenberg said, "It's opened up significantly in the last two years, and it's a much, much more open market today." There, "they look at 7 percent, 7.5 percent growth in GDP as a problem," he said. "We'd be dancing in the streets."
Why did Katzenberg pull the trigger on building a new TV studio right now? It's partly a function of scale. The studio has six established franchises, plus its acquisition of the Classic Media library.
And then there's the logistics. Now that its distribution deal with Paramount has expired, DreamWorks Animation owns the necessary rights.
After the interview, Katzenberg headed off to a consumer products show. With the launch of the TV show "Dragons," based on the hit film "How to Train Your Dragon" on Cartoon Network this fall, he expects those characters to surge in popularity.
That show generates revenue in its own right but also makes the studios' characters more valuable in terms of consumer products sales and licensing for theme parks. Rides at Universal's Parks & Resorts are based on Dreamworks Animation characters, and earlier this year the company announced it is partnering to build indoor theme parks in Russia.
(Read More: Netflix Strikes Largest Content Deal)
As for his outlook on his core business—movies—Katzenberg laughed at Steven Spielberg and George Lucas' projection of tiered tickets priced as high as $150.
"It's inconceivable to me," he said.
—By CNBC's Julia Boorstin. Follow her on Twitter: @JBoorstin