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[Phoenix]

LOS ANGELES (Reuters) - DreamWorks Animation got hit Thursday with its first shareholder lawsuit since going public -- a proposed class-action accusing company officers of misrepresenting DVD sales for "Shrek 2."

The lawsuit, filed in Los Angeles federal court, claims DreamWorks CEO Jeffrey Katzenberg and Chairman Roger Enrico failed to disclose in the first quarter that sales of "Shrek 2" DVDs were declining far more than expected.

The suit says DreamWorks (down $0.35 to $29.75, Research) continued to ship the title "far in excess of the actual demand" and hid the fact that retailers were returning "massive amounts" of unsold DVDs.

DreamWorks spokesman Bob Feldman said the company had not seen the lawsuit but called the claims "baseless."

"We believe the suit is completely without merit and we intend to defend ourselves vigorously," Feldman said.

DreamWorks Animation stunned investors on May 10 by reporting that first-quarter DVD sales for "Shrek 2" fell far short of the company's earlier projections and that the Glendale, Calif., studio would realize no revenue from the title in the quarter.

Katzenberg said DreamWorks had overestimated retail sales of "Shrek 2," and had been saddled with returns of unsold discs from retail outlets. The announcement during the company's May 10 earnings call sent DreamWorks shares tumbling 12 percent the next trading day.

The title, which broke all box office records for an animated feature last year, sold 33.7 million DVD units in the holiday fourth quarter, Feldman said.

Feldman said that despite sluggish first-quarter sales of 1.3 million units, DreamWorks has not revised its projection for worldwide "Shrek 2" DVD sales of 40 million units.

"Shrek 2" has logged sales of 35 million discs to date.

DreamWorks stocks sank another 7 percent Tuesday, after the debut of "Madagascar" over the long holiday weekend failed to meet analysts' expectations. The shares fell another 1.5 percent Thursday.

Man... shareholders these days don't waste any time.

 

[SteveMeister]

Man, a $61M opening weekend is "failing to live up to expectations?" Harsh!

 

[Dan]

Wow. 33.7 million copies of that piece of shit sold during just the holiday season?

My hatred of Dreamworks Animation +100

 

[fennec fox]

This is actually a pretty interesting story, because it belies the fact that DVD sales are leveling off across the marketplace. A year or two ago, DVDs had shelf lives that went on for months at a time -- nowadays, though, they make the brunt of their overall sales in the first week, just like video games. The anime DVD industry is taking some pretty big hits now for this exact reason -- they overinvested and are paying for it with overstock.

 

[Phoenix]

This is actually a pretty interesting story, because it belies the fact that DVD sales are leveling off across the marketplace. A year or two ago, DVDs had shelf lives that went on for months at a time -- nowadays, though, they make the brunt of their overall sales in the first week, just like video games. The anime DVD industry is taking some pretty big hits now for this exact reason -- they overinvested and are paying for it with overstock.

But when will they recognize their error and give us cheaper prices

 

[AB 101]

Dreamworks=EA of the moviie industry.

 

[Prince of Space]

Haha, no.

 

[miyuru]

This is actually a pretty interesting story, because it belies the fact that DVD sales are leveling off across the marketplace. A year or two ago, DVDs had shelf lives that went on for months at a time -- nowadays, though, they make the brunt of their overall sales in the first week, just like video games. The anime DVD industry is taking some pretty big hits now for this exact reason -- they overinvested and are paying for it with overstock.

Haha fuck anime on DVD, I'm never going to pay such exorbitant prices. I'll stick with my fansubs, at least then I'm not paying for the shitty dub I never wanted in the first place.

 

[Lhadatt]

But when will they recognize their error and give us cheaper prices

:lol

Very funny, Space Rummy.

The anime industry prides itself on charging insane prices for their direct-to-video releases. This will only serve to raise prices, with the argument that they need higher revenue per disc due to the high cost of licensing titles - despite their increasing ability to get shows on TV and pay-per-view. With the glut of crap titles out there (I was pretty sure stuff like Seven of Seven would never get released here, but I was wrong), I'm not surprised that people are buying less.

 

[Lambtron]

Haha fuck anime on DVD, I'm never going to pay such exorbitant prices. I'll stick with my fansubs, at least then I'm not paying for the shitty dub I never wanted in the first place.

Tapes of 2 episodes for $30 (US, ~$4300 CAD), subtitled, was exorbitant. I buy more anime on DVD than I ever did on tape, and I watch about 1/10th as much now.

 

[Phoenix]

Tapes of 2 episodes for $30 (US, ~$4300 CAD), subtitled, was exorbitant. I buy more anime on DVD than I ever did on tape, and I watch about 1/10th as much now.

You're right about that. As bad as DVD is, tape was MUCH worse. I actually purchased all the Gundam stuff on tape.... I don't even want to think about how much that cost.

 

[Ninja Scooter]

This is actually a pretty interesting story, because it belies the fact that DVD sales are leveling off across the marketplace. A year or two ago, DVDs had shelf lives that went on for months at a time -- nowadays, though, they make the brunt of their overall sales in the first week, just like video games. The anime DVD industry is taking some pretty big hits now for this exact reason -- they overinvested and are paying for it with overstock.

Truth. I remember when i went Best Buy to get Chappelle season 2, i was contemplating picking up the Aviator until i saw that they had like 3 displays, and a shelf all PACKED with copies. I just told myself "Hmm, i think i'll wait a couple months til they're clearancing these suckers out for like $7 a pop"

 

[Memles]

Seems like Dreamworks' shareholders are expecting Dreamworks to become Pixar and turn out films people actually want to buy and watch over and over again. They're dreamers, those shareholders.

 

[Christoff Yurievich]

http://i7.photobucket.com/albums/y270/motsy/tanya-daniel-1.jpg

sorry, back on topic. I agree with the analysis from fennec, seems about right with what I've been seeing.

DVD's go down in price pretty fast nowadays. the last time I bought a disc was...damn, I can't remember.