Why DreamWorks Hates Cinderella

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NY Special Screening Of Cinderella
Andy Kropa, Invision/APLily James, left, and Richard Madden attend a special screening of Cinderella in New York on March 8.
Walt Disney (DIS) is hoping that to mine gold out of glass slippers this weekend. "Cinderella" -- a live-action film based on the family entertainment giant's animated classic -- hits thousands of multiplex screens across the country Friday.

It's not packing much of a punch in terms of movies stars. "Downton Abbey's" Lily James and "Game of Thrones' " Richard Madden star as the fairy tale couple. It should still be a Hollywood smash. Disney has fared well in recent years with spinning some of its hand-drawn animated fare into modern flicks. From "Alice in Wonderland" to rebooting "Sleeping Beauty" with "Maleficent," Disney's been milking its enviable catalog of content. It also doesn't hurt that the Disney Princess toy line has been a huge success, making the seemingly timeless "Cinderella" popular again with young girls.

Disney is rolling these days. The stock hit an all-time high earlier this month. The same can't be said for its theatrical animation rival DreamWorks Animation (DWA), probably the only company out there that dreads the arrival of "Cinderella."

A DreamWorks Is a Wish Your Heart Makes

DreamWorks Animation has fallen on hard times. A few rough movie releases and the mismanagement of costs resulted in a painful restructuring earlier this year. The studio that once feasted on the "Shrek" and "Madagascar" franchises had to scale back. It eliminated nearly a fifth of its workforce, and its once aggressive theatrical release slate has been pared back for 2015.

It's only putting out one movie this year, and as DreamWorks' lucky misfortune should have it, that movie just happens to be rolling out during the same month as "Cinderella."

DreamWorks' "Home" hits theaters on March 27, two weeks after "Cinderella's" debut. Given the staying power of Disney's family-friendly releases, it's a safe bet that it will eat into the volume of moviegoers who would normally be checking out what DreamWorks Animation is up to. That's just bad timing. DreamWorks is betting its entire slate of releases on a single computer-rendered movie, and it just happens to be putting it out 14 days after Disney woos families to the multiplex.

Home Alone

"Home's" plot may seem familiar. The story of a misfit from another planet befriending an adventurous girl as he's being chased by his own people sounds a lot like Disney's "Lilo & Stitch." However, the setting and the actual story are quite different.

There's a big cast starring Rihanna, Jim Parsons, J. Lo, and Steve Martin. However, getting big stars to turn out for speaking gigs on animated movies is an easy art, and one that doesn't always pay off. The real fear for DreamWorks Animation is that "Cinderella" will still be lighting up movie audiences by the time "Home" makes its debut, and if it's a flop, the studio won't have a comeback project until 2016.

DreamWorks Animation is providing Netflix (NFLX) with some original content, but that hasn't been enough to breathe new life into the moribund shares. The stock is trading lower in 2015, and that was after losing more than a third of its value last year. DreamWorks Animation wants to go "Home," but "Cinderella's" ball may get in the way.

Motley Fool contributor Rick Munarriz owns shares of Netflix and Walt Disney. The Motley Fool recommends DreamWorks Animation, Netflix, and Walt Disney. The Motley Fool owns shares of Netflix and Walt Disney. Try any of our Foolish newsletter services free for 30 days. Check out our free report on one great stock to buy for 2015 and beyond.
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