Following the blockbuster success of “Rango,” Paramount Pictures said Wednesday that it is creating a division to make its own big-budget animated movies, putting the studio in competition with longtime partner DreamWorks Animation.
The new division will make one animated film per year with a fairly large budget by Hollywood standards — up to $100 million each. The first title is set for release in 2014.
Paramount’s first fully owned animated movie, “Rango,” charmed audiences. The flick, starring Johnny Depp as a chameleon in the Wild West, has grossed more than $240 million worldwide since its release in March.
Paramount’s chairman and chief executive, Brad Grey, said the studio is looking to produce more of its own material because it is more lucrative than simply distributing other studio’s pictures for a fee.
“It’s in our best interest at this point — with the global distribution business that we’ve built, as well as the great production pipeline — to own our own product,” Grey said in an interview.
The move will put a strain on its longtime agreement to distribute movies from DreamWorks Animation SKG Inc., the maker of “Shrek” and “Kung Fu Panda.” Paramount has distributed two or three DreamWorks movies a year since 2006, earning 8 percent of the box office receipts and recouping all its marketing costs. The deal expires at the end of next year, and the two studios have not yet agreed to another deal.
Paramount has offered a one-year extension on the same terms, but it is looking to get a better deal for any extension beyond 2013, according to a person familiar with the studio’s thinking. The person spoke on condition of anonymity because the discussions are confidential.
Stifel Nicolaus analyst Ben Mogil said Paramount’s announcement suggests that it and DreamWorks will head their separate ways, to DreamWorks’ detriment.
“Clearly, a new in-house competitor to DreamWorks is a negative,” he wrote in a research note Wednesday.
Paramount plans to create characters in conjunction with Nickelodeon, a channel that is also owned by Paramount’s parent company, Viacom Inc. The plan is not just to make movies from characters on television such as “SpongeBob Squarepants,” but to develop Nickelodeon with fresh material as a film brand for families, Grey said.
“Every now and then you could see a SpongeBob, but hopefully we’ll come up with new franchises,” he said.
Paramount makes about 12 movies per year. Its latest release, “Transformers: Dark of the Moon,” had the biggest Fourth of July weekend opening ever, with nearly $116 million in tickets sold domestically. In one week, “Transformers” has raked in $404 million worldwide.
Apple and Google Face UK Investigation Into Mobile Browser Dominance
Apple and Google aren't giving consumers a genuine choice of mobile web browsers, a British watchdog said Friday in a report that recommends they face an investigation under new U.K. digital rules taking effect next year.
The Competition and Markets Authority took aim at Apple, saying the iPhone maker's tactics hold back innovation by stopping rivals from giving users new features like faster webpage loading. Apple does this by restricting progressive web apps, which don't need to be downloaded from an app store and aren't subject to app store commissions, the report said.
"This technology is not able to fully take off on iOS devices," the watchdog said in a provisional report on its investigation into mobile browsers that it opened after an initial study concluded that Apple and Google effectively have a chokehold on "mobile ecosystems."
The CMA's report also found that Apple and Google manipulate the choices given to mobile phone users to make their own browsers "the clearest or easiest option."
And it said that the a revenue-sharing deal between the two U.S. Big Tech companies "significantly reduces their financial incentives" to compete in mobile browsers on Apple's iOS operating system for iPhones.
Both companies said they will "engage constructively" with the CMA.
Apple said it disagreed with the findings and said it was concerned that the recommendations would undermine user privacy and security.
Google said the openness of its Android mobile operating system "has helped to expand choice, reduce prices and democratize access to smartphones and apps" and that it's "committed to open platforms that empower consumers."
It's the latest move by regulators on both sides of the Atlantic to crack down on the... Read More