Could DreamWorks (NASDAQ:DWA) Stand Up Once Again?


After being labeled as a publicly traded company in 2004, DreamWorks (NASDAQ:DWA) Animations has being struggling as it climbs the ladder of success. Even though that has had some successes but they fell short in front of Walt Disney, especially after releases like Frozen and Big Hero 6. But according to speculators DreamWorks (NASDAQ:DWA) Animation isn’t even the next in line after Walt Disney. Comcast (NASDAQ:CMCSA) Universal launched Despicable Me series and Fox (NASDAQ:FOX) released Ice Age, both resulting into a billion dollar show.

DreamWorks (NASDAQ:DWA) has had its list of releases at the box office in the past two years, but it seems like its highs aren’t high enough and its lows are considered too low. There have being big releases like “How to train your dragon” and “The Croods” but they both fell short.

The DreamWorks (NASDAQ:DWA) story has been fluctuating with every release. The best it produced was the “Penguins of Madagascar”, which was a sequel of the Madagascar series. This film was the closest DreamWorks (NASDAQ:DWA) got to a break-even. After its strings of failures, DreamWorks (NASDAQ:DWA) plans to release “Penguins” in a less pressured time zone of spring. But that plan backfired, as the movie attained less than the expected $50 million. It’s expected that the film will generate a figure of $105 million at home, which is well below the $175 million initial consensus. The film would be written off if it can’t generate a total of $350 million in the overseas market.

According to analyst Vasily Karasyov, “Penguins” would most probably produce a figure 3:3 times bigger than domestic sales. It seems like in the long run “Penguins” is causing DreamWorks (NASDAQ:DWA) to lose money or gain very small profit margins, which could be a potential harm for revenues in the shape of licensing and merchandising in connection to the running Penguins TV show.

So what can DreamWorks (NASDAQ:DWA) do now? It seems like DreamWorks (NASDAQ:DWA) places big bets on new releases and when they flop the business is majorly affected. Then they set foot into television, again these shows were titles of its past box office hits. But this strategy requires for new blockbusters to be released and DreamWorks (NASDAQ:DWA) struggles in that department. So, it looks like the firm needs a new strategy to help it survive in such times. At this stage the firm could either expand through releasing lower or mid-budget releases. The options are few, either the company should sell itself to a more versatile player or merge with a company that would help bring it up or lastly find ways to hit the box office more frequently. Now, it’s just a matter of good evaluation that the company realizes, which path is good for it and start off on it before it’s too late. Otherwise, at this rate it won’t be long that the company soon runs out of business.

It looks as if the company is losing its long stance in the media world, and desperately needs a blockbuster.