katzenberg_phones katzenberg_phones
Ideas/CommentaryInternet Television

Katzenberg Wants To Do For Web Video What He Did For Animation—And That’s Not Necessarily A Good Thing

The post-Dreamworks Animation career of Jeffrey Katzenberg officially launched last week with a cover story in Variety touting grand plans for his short-form mobile/web video company WndrCo.

Armed with $600 million in investment — and still needing an additional $2 billion to launch — Katzenberg’s goal is to re-invent web video for 18-34 year olds. He calls it “New TV.” And what is the 66-year-old’s plan for re-inventing television? It basically boils down to: Make it more expensive to produce.

As Variety points out, made-for-mobile content generally tops out at around $10,000-per-minute, with many viral amateur-filmed videos and genres like Let’s Play vids produced at virtually no cost. Katzenberg’s mission is to raise production budgets tenfold, as high as $125,000 per minute.

His thinking is that if producers and studios earn fees for mobile content that are similar to traditional tv, they’ll be more likely to create content for broadband consumption. “We need dozens and dozens of suppliers to be incentivized to see this as a financial boon to jump on the bandwagon,” Katzenberg told Variety. “They’re not going to do it without a cut of the action.”

To get the extra $2 billion needed to launch, Katzenberg is looking for either a tech or telco partner, and so far has pitched the concept to Apple, Verizon, and Youtube. He’s also eyeing producers like Disney and CBS as content providers for the new venture.

Richard Rushfield observed in his film industry newsletter The Ankler that Hollywood isn’t quite convinced of Katzenberg’s plan to turn on the money hose for web content:

The best part of the article are the jumbo pull quotes from [Disney CEO Bob] Iger and [CBS Corp. CEO Leslie] Moonves praising Jeffrey’s plan in vintage Hollywood Brush-offese. Hint to Hollywood newcomers: When you have a pitch meeting that ends with a bearhug statement of support like this – “It’s an interesting new company and it’s something we’re clearly keeping a close eye on…I think it has a great chance for success.” – Make a beeline for the parking structure to be sure your car isn’t already being towed off the lot.

What I haven’t seen anyone mention yet about Katzenberg’s plan for web video is that it’s the exact same plan he had for animation. And that plan worked…until it no longer did.

When Katzenberg launched Dreamworks in 1994, he set out to make high-end animated features to compete with Disney at whatever cost necessary. He aggressively recruited artists from Disney for top-dollar amounts, bought an established cg studio in northern California (PDI), erected a custom campus in Glendale, and built up a management/support staff as bloated and ineffective as the largest studios in Hollywood.

The gambit worked for a while, as Katzenberg hit the jackpot with franchises like Shrek, Madagscar, and Kung Fu Panda, but audiences eventually tired of the studio’s tepid filmmaking-by-committee approach, and by the 2010s, Dreamworks features routinely cost $150-million-plus and were unprofitable.

The final nail in the coffin was when more nimble outfits, particularly Illumination, showed that it was possible to create similarly successful films for half the cost of a Dreamworks film. After Katzenberg had exhausted all his options, including a fling with 3D filmmaking and another fling with China, he unloaded the company to Comcast-NBCUniversal for $3.8 billion, walking away with $400 million personally.

At this stage of Katzenberg’s career, it’s unfair to expect him to bring anything new or revolutionary to the world of entertainment. He’ll continue doing what he does — and what he does best is throw money at things. But his recently-aborted career as an animation studio exec might best serve as a cautionary tale: there are limitations to the Katzenberg approach when the bags of money aren’t supported by a creative vision.

  • Josh Evans

    I swear I read this article twice, I still don’t understand how driving up the cost of making a video increases profits. *goes and sits in corner with dunce cap on head*

    • Taco

      Take that Dunce cap off your head good sir! JK is focusing on driving up the cost of producing internet videos, because that will increases the “pool of potential profits & investments” for the guys at the top of the production pyramid, who take the biggest slice of the pie, (classic value extraction method) and leave the rest of it to “Trickle Down” to the creative middle men & women doing the work. Trickle Down economics doesn’t work, it’s actually a “vacuum up the dollars” society, good old capitalism. Create a platform, attract 1000’s of users & charge those users $1 or $2 each for their access/transactions/basically the use of your real-estate or payment system. Congratulations, you’ve made it as a capitalist, screw the little guy! You “earned” it! Nothing to do with leverage, backroom % deals & exploitation what so ever!

  • Tony

    You don’t get more profits by putting in more money. If anything, you put in LESS money so you get more after net. That’s Economics 101.
    The best business plan is to hire great artists with strong ideas and let them do their own thing with little interference. And you don’t keep the budgets too high; tight budgets encourage creativity and let you concentrate on the fundamentals instead of spending too much on useless filigree. It’s how we got A Wild Hare, Duck Amuck, Gerald McBoing-Boing, Fritz the Cat, Heavy Traffic, The Iron Giant, Akira, My Neighbor Totoro, the first Toy Story, and on and on. These are films that pass the test of time and continue making money for years to come, instead of hitting it big the first time and then losing value over time.

    • GW

      Akira was the most expensive anime ever made and it didn’t make its money back at the box office. While it may have been a good long term decision to make the film, it could easily have bankrupt a smaller studio. And nobody is talking about the other sci fi anime film from a year earlier, Wings of Honneamise.The other examples all stand up but you might want to rethink that one. Also, I should point out that while small budgets can be a good thing, if the budget is too small then all you’ll end up with is something that’s too artistically basic or too crude to be entertaining. Picture an episode of The Adventures of Morph with minimalistic animation. Let’s be honest about one thing. Everybody’s got an idea for something that they’d love to make if it didn’t cost too much money, too much time, or if the state of technology allowed it, etc….

      • Tony

        My mistake, anime is out of my field of expertise. And I agree that too small a budget is bad as well. A moderate budget with a reasonable overhead is best.

  • Taco

    “Internet video” with actual profits for the creators, rather than the platform/pay-wall distributor/providers? Get out of Town! Remember that it’s all about having the Physical or Digital real-estate & seeking Rent from that. Creators & their content are simply the meat in the burger that they sell you at the McDonalds drive-through. You’re possibly better off throwing your own content into the void of the internet, setting up a Patreon or Kickstarter & hope that people like your stuff. That or work for or sell your ideas for cold hard cash & loss of your creative rights to established distributor/providers like Nickelodeon, Cartoon Network, Disney, Amazon etc…

  • Elsi Pote

    The golden retriever barks back.

    Not knowing what retirement looks like and not willing to settle at all. The Katz will start of new empire of mehs and wtf blunders and misfires with some pieces of true gold every other blue moon, no questions asked.

    He never could overthrow his old mater’s and he is way far down the internet feed chain. But you cannot blame the sidekick for trying. Unless this endeavor becomes his Waterloo.

  • J.S

    Why would Disney produce content for him? It’s kind of no brainer

    • ランダム アニメーター

      My thoughts exactly.

  • Troy

    I expected Katzenberg to quietly retire after selling Dreamworks, clearly I was wrong and he is just flinging money around.

    “His thinking is that if producers and studios earn fees for mobile content that are similar to traditional tv…… They’re not going to do it without a cut of the action.”
    Uh huh…. Expect copyright lawsuits nationwide.

  • Tre

    ‘Katzenberg Wants To Do For Web Video What He Did For Animation’
    Poop jokes, fart jokes, and more poop jokes?

    • Matthew

      If that’s all you can do, at least make them good ones.

  • Fool me 3 times, shame on who?

    “Katzenberg Wants To Do For Web Video What He Did For Animation” ….So, he’s going to hire some of the top notch talent in the industry, let a bunch of muddle-management take control of creative decisions, flounder on life support for 15-20 years, and then bail out with his Millions of dollars while the company makes sub-par, over priced content?
    Good luck Jeffery!

  • RedHerring

    I tip my hat to the memory of PDI.

  • Chicken McPhee

    Doing the same thing for web video he did for animation? Sabotage domestic production (while putting tons of people out of work just due to his legacy of developing market-unviable projects) mand build a studio in China that costs way too much to run efficiently?