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When Dreamworks Animation (NASDAQ:DWA) purchased the assets of Classic Media in July, I became more bullish on the long term prospects of the animation movie company. In an article about the purchase I had this to say, "The acquisition would obviously be a huge push for Dreamworks Animation in its consumer products and licensing efforts." On Thursday, Dreamworks took that effort a step further with the purchase of the Troll Doll brand.

Founded in 1959 by Thomas Dam, the Troll Doll has been one of the most popular toys in the world throughout several decades. Dam hand carved the doll as a gift for his daughter for Christmas. That troll doll spawned a huge brand that has seen several toy lines, video games, and television specials. The dolls are collected by people around the world and continue to be popular on the internet. A search on Ebay for "Troll Dolls" turned up 11,723 results on Thursday.

Dreamworks purchased the exclusive worldwide rights for the Troll Doll, excluding the Scandanavian territories. Shawn Dennis, who has experience growing the American Girl brand, will be head of brand development and attempt to create revenue for Dreamworks Animation in categories other than box office revenue. Dreamworks' chief operating officer Ann Daly had this to say of the acquisition, "Trolls is a brand with over fifty years of deep heritage and we are thrilled to bring this iconic, multi-generational property to Dreamworks Animation."

The move is similar to Dreamwork's purchase of Classic Media. Dreamworks had a movie in the works centered around Mr. Peabody and Sherman, a brand owned by Classic Media. Similarly, Dreamworks had a movie in place about Trolls, before its purchase of the brand from the Dam Family. Back in June of 2010, Dreamworks began talk of a Trolls movie. Chloe Grace Moretz and Jason Schwartzman have been linked to the voices of the main characters. The movie is scheduled to come out in 2015.

Dreamworks Animation has a movie library of under 30 films. The company counts on the revenue from two to three movies every year and additional television content revenue. However, a new focus on brands and licensing revenue could do wonders for the company and its stock.

The purchase of Classic Media gave the company over 100 characters that are seen in comic books, television shows, and other consumer products. Dreamworks can now take those brands and the Troll Doll brand and try to diversify itself away from box office revenue. If the new Trolls movie is successful, it will likely turn into a movie franchise and could also become a television show.

In fact, Dreamworks Animation has long been rumored to create its own television channel. With these acquisitions, the company clearly has the characters needed to support a channel. Dreamworks also is entering the theme park market with several indoor parks opening centered around the company's movie characters.

Shawn Dennis, with her American Girl experience, has a chance to take a once popular brand and make it relevant again. The company needs to create excitement around the Troll Doll toy line before the movie comes out in 2015. That is one of the things that has hurt the company, a lack of brand recognition. "Rise of the Guardians" had disappointing box office results for Dreamworks and led many to wonder if the company could produce good movies away from its franchises like Shrek, Madagascar, and Kung Fu Panda. The recent box office success of "The Croods" is a step in the right direction. That movie, which has made $128 million in the United States and $335 million overall, also had help from a Rovio game to create character awareness.

Shares of Dreamworks trade at just under $20. The shares are off from 52 week highs of $22.98 and down significantly over the last five years. Earnings per share are expected to hit $0.60 in 2013 and $0.87 in 2014. The company's long term prospects continue to get brighter for investors that see the potential in library titles and licensing. Consider going long Dreamworks Animation before the Troll Dolls invade America once again.

Source: Dreamworks Animation Acquisition Of Troll Dolls Shows Shift Into Characters And Licensing