DreamWorks sees 3-D premiums up, film costs down

LOS ANGELES (Reuters) - DreamWorks Animation SKG Inc Chief Executive Officer Jeffrey Katzenberg on Tuesday said he expects 3-D movie premiums to keep rising, yet the cost of making a 3-D film will decrease.

Movies shown in 3-D are currently commanding premiums of some $3.30 to $3.50 per ticket, according to industry experts.

"I think you'll see over the next 18 months or so ... (prices) reaching the $5 premium level," he said.

When asked on Monday in an interview by Reuters Insider if the film industry was seeing a backlash in terms of ticket increases, Katzenberg, a huge 3-D proponent, said: "Well, so far, absolutely not. It's been just the opposite.

"People have been very excited about the 3-D experience," he said.

Indeed, 3-D extravaganzas such as James Cameron's "Avatar" have smashed records at the box office as well as at the retail level with its home entertainment Blu-ray sales. DreamWorks' latest 3-D film, "How to Train Your Dragon" has also done well, grossing about $409 million at the global box office since its release on March 26.

DreamWorks will release "Shrek Forever After", the fourth film in the popular "Shrek" franchise, in 3-D.

Katzenberg said he expects the cost of making 3-D films to come down in 2010. The incremental cost per 3-D film for DreamWorks was pegged at about $15 million, or 10 percent of a film's total cost, a year ago.

"In 2010, we expect the incremental cost of 3-D to decline to about $10 million per film," he said.

On Tuesday, Katzenberg also said the company's goal was ultimately to ramp up its release schedule to three films per year.

In 2009, DreamWorks said it planned to release five films every two years, adding an additional film every other year to its existing two picture-a-year release schedule.

"Three films a year is a goal for us, but we have not arrived there and we are approaching this in a conservative and measured way. We are building the infrastructure ... and are well on our way toward doing it," he said.

Katzenberg was also upbeat about 3-D television.

"The rate of adoption for that is going to be faster than almost anything we've seen in the consumer electronics marketplace," he said on Tuesday, noting that a lot of content was already starting to make its way down the pipe to the home, led primarily by sports and followed by video gaming.

DreamWorks shares rose 53 cents, or 1.4 percent, to $38.03 in afternoon trading.

(Editing by Maureen Bavdek)