DreamWorks' Katzenberg disappointed with 3D talks

By Sue Zeidler

LOS ANGELES (Reuters) - DreamWorks Animation SKG (DWA.N: Quote, Profile, Research) Chief Executive Jeffrey Katzenberg on Tuesday said he was disappointed with the pace at which movie theater chains were moving to deploy digital and 3-D technology.

"Things haven't progressed as well as I had hoped," Katzenberg told analysts on a quarterly conference call.

"I feel as though things have dragged along, and it's been pretty disappointing," said Katzenberg, a huge proponent of 3-D films, who has pledged to make all future films in 3-D at an incremental cost of $15 million per film.

For Dreamworks, which makes about two films a year, that commitment to 3-D amounts to about $30 million per year.

Katzenberg on the conference call said he still believed DreamWorks will see a good return on its investment based on projected ticket prices and the number of 3-D screens he is certain will be in the market by the time his studio's first 3-D film, "Monsters vs. Aliens," is released in spring 2009.

"But whether or not it achieves the fullest potential and outside goals I've set for ourselves and challenged exhibition with, is the thing up for grabs right now," he said.

We have indicated that we would like to see 5,000 3-D screens domestically by the time we released 'Monsters vs. Aliens,' but we need to make sure that major theaters chains are committed to getting these screens in the next 30 days or it's unlikely we will get all 5,000 screens," said Lew Coleman, Chief Financial Officer for DreamWorks in an interview.

Katzenberg had hoped by now the Digital Cinema Implementation Partners, owned by Regal Entertainment Group (RGC.N: Quote, Profile, Research), Cinemark Holdings Inc(CNK.N: Quote, Profile, Research) and AMC Entertainment IncAC.N had reached a $1.1 billion financing deal with Hollywood studios to deploy cinema digital technology. Once outfitted with digital projectors, theaters can then add 3-D technology.