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Dreamworks Animation Skg Inc (DWA) Animation: Where Innovation and Imagination Collide

These data centers allow for scalable multicore processing and brought DreamWorks screaming into the 21st century by making all of its data cloud-enabled. If you want to be brutally simple, computer-generated animation is a massive collection of data, and DreamWorks’ new software and huge data center investments have made it such that any person in the production process can gain access to, or provide feedback on, a developing animation from any desktop, anywhere! In fact, about 20% of all rendering nowadays is done offsite! This combination of new hardware and software has put the ball back in the animators’ courts.

Another separating factor for DreamWorks is its reliance on 3-D technology. Although 3-D televisions failed to take off as expected in consumer households, the 3-D experience in the movie theater remains a traffic driver. DreamWorks, rather than relying on previous animation techniques in the 1990s that superimposed 3-D on moviegoers in the theater, produces all of its movies in 3-D from the start which creates a richer (and non-nauseating!) movie from start to finish.

The prince of DreamWorks
As a truly exceptional conclusion to my technology-focused tour, I was able to spend 15 minutes chatting with CEO and co-founder Jeffrey Katzenberg.

Source: Sean Williams.

As you might imagine, we spoke briefly about the various technologies that were introduced over the past couple of years, but I had two more pressing questions that technology wizard Kate Swanborg and I didn’t touch on.

To begin with, I was curious about Katzenberg’s views on how mobile computing may transform his business and what actions his company might be taking to prepare for the transition. To that end, Katzenberg expounded that “It’s our future. It’s a valuable new form of expression that will completely repurpose intellectual property and our characters.”

One of the more intriguing moments of our conversation on the ongoing mobile transformation revolved around his view of how we may pay for content in the future:

Ten years from now [similar to how consumers in India watch content on their mobile phones] we might be paying for content by the square inch. For instance, watching a movie on a mobile phone may cost $0.69; on a tablet, perhaps $0.99. If you watch that same movie on a 60-inch television, it might cost $4.99. It’s a revolutionary time for how content is made available.

As you might imagine, Katzenberg and I also got on the subject of my article highlighting him as an incredible CEO. I asked him to expand a bit on what provoked him to supply such amazing perks to his employees. Katzenberg had this to say:

If people are in love with their work, and you give them the best tools available and surround them with a healthy environment, and celebrate their accomplishments and milestones, then we all win! Many of these people here are 29 years old and they’re not looking out for their health. It’s our job to do that for them, because keeping them healthy is good business.

And this is precisely why I highlight exceptional CEOs on a weekly basis — to bring proactive-thinking leaders to investors’ attention.

The Crood reality
Before my tour, I had a respect for DreamWorks and understood that its past dealings had made the company successful. When I left, I better understood how the company has completely transformed its business and positioned itself for long-term success.

Dreamworks Animation Skg Inc (NASDAQ:DWA) laid the groundwork for its in-home and marketing successes over the last couple of years, which should give it an edge over Disney’s Pixar in the long run. In 2011 it signed a streaming content deal with Netflix, Inc. (NASDAQ:NFLX) , the king of streaming content, to bring its animations into family households. More recently, Netflix and DreamWorks announced they’d be teaming up to introduce a new children’s series known as Turbo: F.A.S.T and modeled after its CG animation Turbo due out later this year.

In terms of advertising, DreamWorks snagged McDonald’s Corporation (NYSE:MCD) , the world’s largest restaurant chain and arguably one of the most recognizable brands globally, to an exclusive 10-year deal in 2007, ending Disney’s 10-year partnership with the brand. In return for in-store promotion of its upcoming animations, DreamWorks supplies McDonald’s with co-branded marketing materials and videos.

The next big test for Dreamworks Animation Skg Inc (NASDAQ:DWA) comes in less than three weeks when it releases The Croods. If history serves as any indicator, and based on the innovations I was shown, I fully expect this movie to be a success.

The article DreamWorks Animation: Where Innovation and Imagination Collide originally appeared on

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Disney, Netflix, and McDonald’s. Motley Fool newsletter services have recommended buying shares of McDonald’s, DreamWorks Animation, Netflix, and Disney.

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