This week, the Glendale studio will take a "Shrek"-size leap toward reinventing itself on the small screen.
On Christmas Eve, DreamWorks Animation unveils its first original series for Netflix Inc. — "Turbo FAST," a spinoff of the company's summer movie about a team of racing snails.
"Turbo FAST" is the first of 300 hours of animation programming that DreamWorks is creating as part of a landmark deal with the streaming television service.
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The agreement marks the largest push into original kids' programming for Netflix and also is the first time that DreamWorks Animation's characters will be introduced into the television market as a branded collection of shows.
DreamWorks, creator of the "Shrek," "Kung Fu Panda" and "Madagascar" movies, already produces TV specials and series based on its movies for Cartoon Network and Nickelodeon and is eager to expand its television production as part of a strategy to become less reliant on the fortunes of animated feature films.
But the pact with Netflix of Los Gatos, Calif., takes its foray into TV to a new level. Over the next three years, DreamWorks will produce a dozen series based on characters from its movies, as well as those from its recently acquired Classic Media library, which includes "Rocky and Bullwinkle," "Lassie," "Casper the Friendly Ghost," and "Mr. Peabody and Sherman."
For DreamWorks, Netflix provides a new way to reach family audiences across a global Internet service that is changing television viewing habits.
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"It's an enormous order," said Margie Cohn, head of television for DreamWorks Animation. "It really takes DreamWorks from being a movie company to being a branded family entertainment company. Instead of having just one or two engagements with DreamWorks Animation every year, you now have a daily engagement."
Housed in an office building near the Glendale headquarters, the TV unit — dubbed Animation Central —employs 75 people and will add 225 more by the end of March to handle the growing volume of work, Cohn said.
For Netflix, the partnership allows the service best known for critically acclaimed adult fare like "House of Cards," "Arrested Development" and "Orange Is the New Black" to expand its family entertainment offerings.
Kids' shows such as "Mako Mermaids" have proved to be popular on Netflix, which needs fresh content in part because it did not renew a deal it had with Viacom Inc. for reruns of shows from its popular kids' cable channel Nickelodeon.
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"Animated content reaches kids at a variety of ages, and the kids' offering is very important to us because it's a way to increase the value of our service," said Cindy Holland, vice president of original content for Netflix.
DreamWorks Animation will receive licensing fees from Netflix, which is paying for the programming.
Television represents a small share of DreamWorks' overall revenue — only about $100 million annually. And even with the Netflix deal, about 70% of the studio's business will remain tied to the box office, said Doug Creutz, a senior media and entertainment industry analyst with Cowen and Co.
"It's not a radical change to their business model, but it does give them some stability," Creutz said. "Their TV business has not been enormously profitable. This improves the profitability of that business significantly. "
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