Dreamworks' Live-Action Business May Be Sold

A string of flops and problems with the DVD business has undermined Dreamworks' early success and original ambitions. The company has split in two; its live-action business may be sold while a separate animation company has been buffeted on Wall Street.

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SCOTT SIMON, host:

This is WEEKEND EDITION from NPR News. I'm Scott Simon.

Coming up, Elvis lives on and on and on.

But first, DreamWorks Animation SKG Incorporated reported a slight dip in second-quarter sales this week due to a cooling interest in "Shrek 2" and "Shark Tale" DVDs, but despite the stumble in animation, DreamWorks is widely expected to sell its live action studio. DreamWorks began just over 10 years ago with divisions in music, film, video games, animation and live action movies all run by a dream team of executives and creative minds. Since then, the company has downsized its scope and DreamWorks live action has never quite fulfilled the grand expectations of the people who founded it, Steven Spielberg, Jeffrey Katzenberg and David Geffen. NPR's Kim Masters covers the movie industry; joins us from NPR West.

Kim, thanks very much for being with us.

KIM MASTERS reporting:

Hi.

SIMON: And it's two companies we're talking about, right? Live action and animation.

MASTERS: Yes. Originally, it was supposed to be one big company, and it was supposed to be a big media behemoth with all of these television and Internet this, that and the other thing. What's left now is a live action company that is privately owned and an animation company in which stock is traded. So those are the two separate parts of DreamWorks.

SIMON: Let me ask about animation. Are people really losing interest in buying DVDs? It seems like you see them in every kid's library.

MASTERS: Yeah, you know, but there does seem to be a really stunning, changing dynamic in the way that DVDs are bought. It's--the growth is slowing dramatically enough that the movie business, which has been depending on the DVDs, is really frightened and Pixar, the other animation powerhouse that does computer-generated animation, like "Finding Nemo," has had a similar problem. So it does seem to be a trend and it's affected DreamWorks very badly.

SIMON: With specific interest in the live action division of the company, you know, it's one of these nostrums around Hollywood that if you hire the best talents and let them do what they want, you're going to make money hand over fist. Well, Steven Spielberg, Jeffrey Katzenberg and David Geffen--you don't get three bigger names than that. Why hasn't it quite taken off?

MASTERS: The primary reason, aside from management problems that may have arisen, is money. It's incredibly expensive to make these movies. It's very hard to know what's gonna work. There's no magic formula and it just is a furnace. So after a while, it's hard to keep treading water, especially if you don't have a big library the way that Universal Pictures or Paramount has that can generate cash when your times may be a little bit lean.

SIMON: Now in the library of DreamWorks would be, let me see, "Gladiator," "American Beauty," "Saving Private Ryan," "Catch Me If You Can."

MASTERS: Yeah, what happened with DreamWorks live action is they were Oscar contenders with "Saving Private Ryan," they won with "American Beauty," they were partners with Universal and won with "Gladiator." And then things just went off track and they have had a series of failures from "Win a Date with Tad Hamilton" to this really big bomb recently "The Island." And it just--they have not been able to sort of recapture that momentum.

SIMON: You know, we fortunately have a clip from "The Island" to play, and we'll play it because, as we know, not a lot of people have seen it. This is Steve Buscemi playing a mechanic and talking to characters played by Ewan McGreggor and Scarlette Johansson.

(Soundbite from "The Island")

Mr. STEVE BUSCEMI (Actor): (As McCord) You're clones. You're copies of people out here in the world.

Ms. SCARLETTE JOHANSSON (Actress): (As Sarah Jordan) What?

Mr. EWAN McGREGOR (Actor): (As Tom Lincoln) Clones?

Ms. JOHANSSON: (As Sarah Jordan) What?

Mr. McGREGOR: (As Tom Lincoln) Copies? What are you talking about?

Ms. JOHANSSON: (As Sarah Jordan) Why?

Mr. BUSCEMI: (As McCord) Some hag trophy wife needs new skin for a face-lift or one of them gets sick and they need a new part, they take it from you.

Ms. JOHANSSON: (As Sarah Jordan) I have a mother.

Mr. BUSCEMI: (As McCord) Yeah, I know.

Ms. JOHANSSON: (As Sarah Jordan) I grew up on a farm. I have a little dog and I had a bike.

Mr. BUSCEMI: (As McCord) And a bike, right. Memory imprints. There's only like 12 stories. They change around little details, but the life you think you had before the contamination never happened.

SIMON: Now I don't want to kick a film when it's down; we have critics to do that.

MASTERS: Yes.

SIMON: But at the same time, DreamWorks apparently took a pass on dodgeball sideways in "The Motorcycle Diaries."

MASTERS: Yeah. You know, I mean, partly it's just how do you know? But the other part of this is that Steven Spielberg, I feel, has sort of, you know, he was sort of half committed to DreamWorks from the beginning. And he wanted to do whatever projects he wanted to do, and so he ended up doing a lot of films at other studios. And often, he would cut DreamWorks in as a partner. He made "Minority Report" with Fox. He made "AI" with Warner Bros. And he also installed his producers to run DreamWorks in live action, and they could green-light a movie and then pay themselves to make it.

SIMON: Mm-hmm. Can you hazard any guess as to how much the final price tag will be on DreamWorks?

MASTERS: Well, the number that's being kicked around is a billion dollars, which seems pretty high to a lot of people I talked to. But, you know...

SIMON: I think it would seem high to most human beings actually, but...

MASTERS: ...Universal right now is, I think, viewed in Hollywood as the pre-emptive bidder. And I know that David Geffen, who's negotiating this deal, is feeling those winds of change with what's going on with DVDs and how movies are going to be delivered in the digital age. I mean, a lot of people in Hollywood are really, really spooked. And I think David Geffen is not a young guy. He's a very, very wealthy guy. I think that they'll end up, you know, making a deal. That's the prediction by most observers in Hollywood.

SIMON: NPR's Kim Masters at NPR West. Thanks very much.

MASTERS: Thank you.

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