A string of flops and problems with the DVD business has undermined Dreamworks' early success and original ambitions. The company has split in two; its live-action business may be sold while a separate animation company has been buffeted on Wall Street.
SCOTT SIMON, host: This is WEEKEND EDITION from NPR News.  I'm Scott Simon.</s>SCOTT SIMON, host: Coming up, Elvis lives on and on and on.</s>SCOTT SIMON, host: But first, DreamWorks Animation SKG Incorporated reported a slight dip in      second-quarter sales this week due to a cooling interest in "Shrek 2" and      "Shark Tale" DVDs, but despite the stumble in animation, DreamWorks is      widely expected to sell its live action studio.  DreamWorks began just      over 10 years ago with divisions in music, film, video games, animation      and live action movies all run by a dream team of executives and creative      minds.  Since then, the company has downsized its scope and DreamWorks      live action has never quite fulfilled the grand expectations of the      people who founded it, Steven Spielberg, Jeffrey Katzenberg and David      Geffen.  NPR's Kim Masters covers the movie industry; joins us from NPR      West.</s>SCOTT SIMON, host: Kim, thanks very much for being with us.</s>KIM MASTERS reporting: Hi.</s>SCOTT SIMON, host: And it's two companies we're talking about, right?  Live action      and animation.</s>MASTERS: Yes.  Originally, it was supposed to be one big company, and it      was supposed to be a big media behemoth with all of these television and      Internet this, that and the other thing.  What's left now is a live      action company that is privately owned and an animation company in which      stock is traded.  So those are the two separate parts of DreamWorks.</s>SCOTT SIMON, host: Let me ask about animation.  Are people really losing interest in      buying DVDs?  It seems like you see them in every kid's library.</s>MASTERS: Yeah, you know, but there does seem to be a really stunning,      changing dynamic in the way that DVDs are bought.  It's--the growth is      slowing dramatically enough that the movie business, which has been      depending on the DVDs, is really frightened and Pixar, the other      animation powerhouse that does computer-generated animation, like      "Finding Nemo," has had a similar problem. So it does seem to be a trend      and it's affected DreamWorks very badly.</s>SCOTT SIMON, host: With specific interest in the live action division of the      company, you know, it's one of these nostrums around Hollywood that if      you hire the best talents and let them do what they want, you're going to      make money hand over fist.  Well, Steven Spielberg, Jeffrey Katzenberg      and David Geffen--you don't get three bigger names than that.  Why hasn't      it quite taken off?</s>MASTERS: The primary reason, aside from management problems that may      have arisen, is money.  It's incredibly expensive to make these movies.      It's very hard to know what's gonna work.  There's no magic formula and      it just is a furnace.  So after a while, it's hard to keep treading      water, especially if you don't have a big library the way that Universal      Pictures or Paramount has that can generate cash when your times may be a      little bit lean.</s>SCOTT SIMON, host: Now in the library of DreamWorks would be, let me see,      "Gladiator," "American Beauty," "Saving Private Ryan," "Catch Me If You      Can."</s>MASTERS: Yeah, what happened with DreamWorks live action is they were      Oscar contenders with "Saving Private Ryan," they won with "American      Beauty," they were partners with Universal and won with "Gladiator."  And      then things just went off track and they have had a series of failures      from "Win a Date with Tad Hamilton" to this really big bomb recently "The      Island."  And it just--they have not been able to sort of recapture that      momentum.</s>SCOTT SIMON, host: You know, we fortunately have a clip from "The Island" to play,      and we'll play it because, as we know, not a lot of people have seen it.      This is Steve Buscemi playing a mechanic and talking to characters played      by Ewan McGreggor and Scarlette Johansson.</s>Mr. STEVE BUSCEMI (Actor): (As McCord) You're clones.  You're copies of      people out here in the world.</s>Ms. SCARLETTE JOHANSSON (Actress): (As Sarah Jordan)  What?</s>Mr. EWAN McGREGOR (Actor): (As Tom Lincoln) Clones?</s>Ms. SCARLETTE JOHANSSON (Actress): (As Sarah Jordan) What?</s>Mr. EWAN McGREGOR (Actor): (As Tom Lincoln) Copies?  What are you talking about?</s>Ms. SCARLETTE JOHANSSON (Actress): (As Sarah Jordan) Why?</s>Mr. STEVE BUSCEMI (Actor): (As McCord) Some hag trophy wife needs new skin for a      face-lift or one of them gets sick and they need a new part, they take it      from you.</s>Ms. SCARLETTE JOHANSSON (Actress): (As Sarah Jordan) I have a mother.</s>Mr. STEVE BUSCEMI (Actor): (As McCord) Yeah, I know.</s>Ms. SCARLETTE JOHANSSON (Actress): (As Sarah Jordan) I grew up on a farm.  I have a little      dog and I had a bike.</s>Mr. STEVE BUSCEMI (Actor): (As McCord) And a bike, right.  Memory imprints.  There's      only like 12 stories.  They change around little details, but the life      you think you had before the contamination never happened.</s>SCOTT SIMON, host: Now I don't want to kick a film when it's down; we have critics      to do that.</s>MASTERS: Yes.</s>SCOTT SIMON, host: But at the same time, DreamWorks apparently took a pass on      dodgeball sideways in "The Motorcycle Diaries."</s>MASTERS: Yeah.  You know, I mean, partly it's just how do you know?  But      the other part of this is that Steven Spielberg, I feel, has sort of, you      know, he was sort of half committed to DreamWorks from the beginning.      And he wanted to do whatever projects he wanted to do, and so he ended up      doing a lot of films at other studios.  And often, he would cut      DreamWorks in as a partner.  He made "Minority Report" with Fox.  He made      "AI" with Warner Bros.  And he also installed his producers to run      DreamWorks in live action, and they could green-light a movie and then      pay themselves to make it.</s>SCOTT SIMON, host: Mm-hmm.  Can you hazard any guess as to how much the final price      tag will be on DreamWorks?</s>MASTERS: Well, the number that's being kicked around is a billion      dollars, which seems pretty high to a lot of people I talked to.  But,      you know...</s>SCOTT SIMON, host: I think it would seem high to most human beings actually, but...</s>MASTERS: ...Universal right now is, I think, viewed in Hollywood as the      pre-emptive bidder.  And I know that David Geffen, who's negotiating this      deal, is feeling those winds of change with what's going on with DVDs and      how movies are going to be delivered in the digital age.  I mean, a lot      of people in Hollywood are really, really spooked.  And I think David      Geffen is not a young guy.  He's a very, very wealthy guy.  I think that      they'll end up, you know, making a deal.  That's the prediction by most      observers in Hollywood.</s>SCOTT SIMON, host: NPR's Kim Masters at NPR West.  Thanks very much.</s>MASTERS: Thank you.