Waters Don’t Part for DreamWorks’ ‘Prince of Egypt’

“The Prince of Egypt,” the much-anticipated animated feature from DreamWorks SKG that marks the biggest bet yet for the 4-year-old studio, requires a leap of faith unrelated to burning bushes, plagues of locusts or parting seas.

For starters, no one in Hollywood buys the idea that DreamWorks spent only $75 million to make its movie about the life of Moses, as the studio would like people to believe.

Rival executives who work in animation say a film of the scope and quality of “Prince of Egypt” could not possibly cost less than the kind of money Walt Disney Co. spends, now about $125 million to $150 million, per animated opus.

DreamWorks’ competitors also believe the studio is spending significantly more to market the movie than the $35 million it estimates it will shell out domestically through year-end (not to mention what it is spending for foreign marketing). Some marketing sources estimate that DreamWorks coughed up at least $30 million in TV advertising alone, as it relentlessly promoted the film before its release Friday. Studios rarely spend more than $20 million to $22 million for media before a movie comes out.

All of this makes it hard to believe that the fledgling studio, which has hinged its success on having blockbuster-level animated features, is as happy as it publicly claims to be with the $14.5 million that “Prince of Egypt” grossed in its opening weekend.

But DreamWorks partner and “Prince of Egypt” executive producer Jeffrey Katzenberg--who has a lot personally riding on the film’s box-office performance--insists that the opening was in line with the studio’s expectations given that the shopping-heavy, pre-Christmas weekend is historically one of the slowest moviegoing periods of the year.

“This is a very soft weekend,” Katzenberg said. “Everybody knows it is. Would we have liked to have done more? Of course. But we are setting this movie up for the holidays.”

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Katzenberg declined to discuss costs, saying: “It’s nobody’s business. . . . But if you’re asking me at what point do we make money, I would say if the film grosses $85 million at the box office [domestically], it would make a considerable profit for DreamWorks and be among the most profitable movies we’ve released since we started.”

But competitors say that given what DreamWorks is believed to have spent on producing and marketing, the movie would need to gross well over $100 million domestically to turn a profit, which may prove challenging.

DreamWorks’ defenders counter that some of Disney’s more recent animated features, notably “The Hunchback of Notre Dame” and “Hercules,” either fell short of or barely broke the benchmark $100-million level at the domestic box office yet were still highly profitable.

Unlike “Prince of Egypt,” those movies had substantial merchandise revenue, although sales of toys and other items also fell well short of Disney’s expectations. Those films also were marketed heavily to children, which boosted eventual video sales. For “Prince of Egypt,” home video will have to be strong for the film to be profitable.

Because of its serious subject matter, “Prince of Egypt” had no toy or fast-food tie-ins, which studios like Disney count on to boost revenue and promote the movie. With animated features, studios typically get tens of millions of additional dollars in promotional support from corporate advertisers such as PepsiCo and McDonald’s, which are eager to use movies to lure customers.

The early returns indicate to some Hollywood executives that “Prince of Egypt” lacks the strong support among children that animated features usually need to become hits. In fact, competitors say “Prince” is playing more like a live-action movie than an animated film.

One key indicator is the box-office increase from Friday to Saturday, when kids are out of school. A leap means the movie is attracting scads of kids.

“Prince of Egypt” rose 25% from Friday to Saturday this past weekend, whereas the other family-themed movies playing in theaters jumped much more. Disney’s “A Bug’s Life” rose 109% from Friday to Saturday; Paramount Pictures’ “Rugrats” jumped 143%. Even Universal Pictures’ box-office bomb “Babe: Pig in the City” increased 120% on Saturday, according to industry data.

But Katzenberg argues that research shows the film is appealing to kids and that surveys of people exiting theaters demonstrate that they recommend it.

“Frankly, it’s better than I anticipated,” Katzenberg said.

By its own admission, DreamWorks toned down the humor that is often the hallmark of today’s animated movies, to stay true to the seriousness of the subject and avoid such oft-used devices as talking animals. And its marketing campaign was aimed as much at adults as children, with efforts to enlist the support of leading religious figures.

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DreamWorks’ distribution chief, Jim Tharp, said 55% of the weekend audience consisted of families, a number he expected to be higher. But Tharp added that with school out, the number of children who see the movie will grow considerably through the holidays.

Tharp said that both Christmas and New Year’s are among the strongest moviegoing days of the holiday season.

But during the upcoming Christmas weekend, “Prince of Egypt” faces even more competition from such films as Universal’s “Patch Adams,” starring Robin Williams, and Sony Pictures Entertainment’s “Stepmom,” with Julia Roberts and Susan Sarandon. It’s also up against Warner Bros.’ “You’ve Got Mail,” starring Tom Hanks and Meg Ryan, which eclipsed “Prince of Egypt” as the most popular movie last weekend.

DreamWorks’ Tharp says that historically, movies that open the weekend before Christmas do only 10% to 15% of their total box-office business then. If that logic holds, “Prince of Egypt” could gross anywhere between $95 million and $158 million, he said.

Rivals, however, say those numbers are a longshot and that based on the early returns, the film will be lucky to gross $75 million in the U.S. Sources close to the studio confirm that DreamWorks had hoped to gross as much as $150 million domestically.

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One competitor said it’s hard to predict what a film will ultimately gross based on its first three days and that the prospects for “Prince of Egypt” could improve in the next week.

The jury is still out, for example, on how the movie will perform internationally. Late last week, DreamWorks released initial figures on how the movie was playing in Singapore and France. That touched off a tiff with Disney, which disputed the numbers. On Monday, Tharp said DreamWorks did not have total foreign box-office figures to date for the movie, an assertion competitors questioned.

In an unusual move, “Prince of Egypt” was released simultaneously here and overseas; most U.S. films launch first at home before opening internationally. Hollywood skeptics believe that DreamWorks’ decision to release the film worldwide was motivated by its desire to grab headlines with a big initial gross.

But Tharp said the decision to go worldwide was about taking advantage of Christmas being “a global holiday” during which audiences all over the world are available at the same time.

Animation is critical to DreamWorks’ success. Indeed, when the studio was launched in the fall of 1994 by Katzenberg, music mogul David Geffen and director Steven Spielberg, the tentative business plan given to potential investors projected substantial profits from animation. The company formed an animation unit based in Glendale, luring numerous animators from Disney and triggering a battle for talent.

Katzenberg is the former studio chief at Disney, which he left after a bitter falling-out with Chairman Michael Eisner in 1994. Katzenberg’s push into animation, which he oversaw when Disney revived its franchise with such hits as “The Little Mermaid,” “Beauty and the Beast,” “Aladdin” and “The Lion King,” is a clear effort to chip away at Disney’s most lucrative business.

In October, DreamWorks and Pacific Data Images released the computer-animated “Antz,” which has proved profitable and actually pulled in better box-office numbers during its first weekend than “Prince of Egypt,” despite much less promotion.

Katzenberg now is having to prove he can do it on his own, the vicious rivalry with Eisner only serving to fuel his competitiveness. The level of spending to market the movie stems in part from the fact that DreamWorks is launching not just a movie but a business.

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Some industry observers suggest there’s a direct correlation between DreamWorks’ spending on “Prince of Egypt” and Katzenberg’s personal involvement in making and selling the movie.

“You had a nervous producer controlling the purse strings,” said one rival studio source. “So where were the checks and balances?” The source pointed out that although a studio chief’s responsibility is to fight a producer on costs throughout the making of a movie, with “Prince of Egypt,” that person--Katzenberg--was one and the same.

Nobody, not even his two partners, was about to tell him how little or how much to spend on a movie that he considered his personal baby.