In this session from Techonomy 2011 in Tuscon, Ariz., Jeffery Katzenberg, Co-Founder and CEO of DreamWorks Animation SKG, discusses how DreamWorks keeps the cost of its productions steady, despite changing technologies.
Katzenberg: So here’s an interesting thing. We make these very complex films. They are—your numbers were in the ballpark. It takes 400 artists on average four, four and a quarter years to make them. They cost in the sort of $130–150 million a piece to make. And the cost of those movies has remained flat now for five years. And you can say, well how is that possible in a world in which obviously—and by the way, the largest expense in that is labor. Cost does go up on labor. We have a very, very high-end work force at our studio. We’re about 2,200 artists at DreamWorks animation, artist-engineers, software programmers, fine painters, you name it, just about everything. We speak about 37 or 38 languages on our campus. And what we try and do is take the innovations that we get in technology and pretty much slice it down the middle, and take 50 percent for productivity and 50 percent to raise the quality of what we’re doing. And having that sort of rule of thumb up until now has managed to keep the cost of these very complex movies constant. So productivity has been a very important factor. Actually the cost of the movie’s probably down about $6 or 7 million in the last year or 18 months, all of which is attributable to productivity out of better software, better engineering.