Puss in Boots Enlisted to Rescue DreamWorks Animation
As one of last year's worst-performing stocks -- shares of the computer-animation studio plummeted 37 percent in 2014 -- DreamWorks Animation has a lot of ground to make up in 2015. Sunday night's award is a good start. The critical acclaim should help prop up sales of the winning movie that became available as a rental and on DVD two months ago. The outlook for "How to Train Your Dragon 3" also got a nice boost. That movie is slated to hit theaters with a springtime 2017 release.
Now investors hoping for the stock to bounce back in 2015 should be turning their attention to the leading online streaming subscription service. A new series with a familiar Zorro-like Spaniard feline is taking to the digital airwaves, and it couldn't come at a better time for DreamWorks Animation.
"The Adventures of Puss in Boots" -- a new animated series based on the sword-swinging cat from the Shrek movies -- debuts exclusively through Netflix (NFLX) on Friday. It's the latest entry in a deal for original content that DreamWorks Animation and Netflix inked two years ago.
The partnership between Netflix and DreamWorks didn't initially generate a lot of attention. It didn't help that the first series produced under the partnership was 2013's "Turbo FAST," an animated show based on the characters from the film about a snail bestowed with powerful speed that had bombed earlier that summer.
Things got a little more promising last month when "All Hail King Julien" hit Netflix. That series is based on the jovial lemur from DreamWorks' "Madagascar" franchise. However, since Shrek is the most successful movie franchise out of the computer-animation studio -- "Shrek 2" continues to hold the record for the highest-grossing computer-animated film of all time in the U.S. -- it wouldn't be a surprise if Friday's show is popular with young families who are Netflix subscribers.
Binge Viewers Need Not Apply
Netflix has taken an interesting stance with how it's distributing its kid-friendly shows. It may have historically offered up entire seasons of original shows on debut dates, but the video buffet provider is setting initial limits on binge viewing for the new animated shows.
Just the first five of the 22-minute episodes will be available on Friday. More episodes will be added along the way. It's a strategy that Netflix also used with "Turbo FAST" in 2013 and "All Hail King Julien" in 2014. Whether it's a matter of kids not engaging in binge-viewing marathons like their parents or Netflix wanting to give animation studios more time to create content, it's an interesting distinction in the way that Netflix is doing business with DreamWorks.
Investors won't care if the arrangement turns out to be mutually beneficial. It's easy to see how the series could inject new interest in the classic Shrek franchise, making this a winning deal for DreamWorks. However, it could also make Netflix more attractive to kids and young families. That's obviously something that Netflix wouldn't mind happening after falling short of its subscriber goals late last year.
Friday's show should be a boost for DreamWorks Animation, but don't be surprised if it's an even more magnetic move for Netflix.
Motley Fool contributor Rick Munarriz owns shares of Netflix. The Motley Fool recommends DreamWorks Animation and Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days.To read about our favorite high-yielding dividend stocks for any investor, check out our free report.