It appears that Comcast and its film and television subsidiary NBCUniversal will rule the Kingdom of Far Far Away after the media giant purchased Shrek franchise parent company DreamWorks Animation in a $3.8 billion acquisition announced earlier today. While the price is hefty, Comcast may not suffer from sticker shock when considering the advantages DreamWorks Animation’s assets provide Comcast’s already vast portfolio.

• The deal positions NBCUniversal to compete prominently in the children’s content space. Children’s and family programming in the U.S. has largely been dominated by the Walt Disney Company in Burbank, with its down-the-street neighbor Warner Bros. regularly nipping at its heels. While the current children’s content and merchandising industry is heavily influenced by Disney’s Mickey Mouse/Pixar/Star Wars/Marvel combination and Warner’s DC Entertainment/Lego combination, the new NBCUniversal combination of Shrek/How to Train Your Dragon/Madagascar/Kung Fu Panda/Minions is in the running as well. With near limitless development possibilities for franchise features, television programs, and direct-to-video opportunities, children’s content is the gift that keeps on giving.
• DreamWorks expands NBCUniversal’s digital properties. NBCUniversal expanded its digital presence beyond Hulu with its comedy-based service Seeso. The DreamWorks acquisition gives NBCUniversal controlling interest in digital media companies AwesomenessTV and Big Frame, which have affiliations with popular digital video creators like Tyler Oakley and Smosh.
• For the franchises they are getting, $3.8 billion might be cheap. Disney paid more than $15 billion for its acquisitions of Marvel, Pixar, and Lucasfilm. In fairness, Disney has leveraged the already strong brands into some of the largest entertainment and merchandising powerhouses in the world. However, with future content and merchandising prospects to complement NBCUniversal’s own Despicable Me/Minions franchise, Comcast has plenty of opportunities to recoup its investment.

NBCUniversal has several successful film and TV properties (Jurassic Park comes to mind), but comparatively few cross-media franchises that reach the kid-friendly and lucrative merchandise licensing markets. Acquiring the DreamWorks properties vastly changes this for Comcast. In an industry that increasingly focuses on successful cross-media franchises to generate revenue, acquiring DreamWorks Animation appears to be a smart move. Coupled with Comcast's burgeoning Parks and Resorts operation that features the Harry Potter universe, the Disney Empire may be looking warily at this new not-so-Far Far Away Kingdom in Universal City.

Further Reading:

• Parks Associates Announces Update to OTT Subscriber Churn Rates for Netflix, Hulu, and Amazon Users
• Top 10 Trends – The Outlook for the Connected Home 2016
• Content Strategies: Survival in the New Video World