DREAMWORKS RISING; HOLLYWOOD'S NEWEST STUDIO READY TO ROLL.

Byline: Dave McNary Daily News Staff Writer

DreamWorks SKG, after a rough start, may be ambling toward stellar results as it launches its movie operations.

The much-ballyhooed company, representing the first attempt to begin a new studio in decades, has attracted massive negative publicity over its stalled attempt to build a state-of-the-art studio in the Ballona Wetlands. It also has posted a mixed record in the television business with minor success from ``Spin City.''

But prospects on the film side, always expected to be DreamWorks' core business, are looking fairly decent.

DreamWorks is now less than two months away from rolling out its first movie - ``Peacemaker,'' starring Nicole Kidman and George Clooney tracking down a stolen nuclear weapon - at more than 2,000 theaters. The thriller will open Sept. 26 amid high expectations due partly to Clooney's status as the heartthrob of ``E.R.'' although his big-screen work so far (``From Dusk Til Dawn,'' ``One Fine Day'' and ``Batman & Robin'') has yet to generate a blockbuster.

Analysts believe DreamWorks has a strong shot at succeeding, largely because of the track records of its principals. Steven Spielberg is the most prolific producer of successful films in the past three decades; Jeffrey Katzenberg rebuilt Walt Disney into Hollywood's leading studio; and David Geffen is acknowledged as one of the entertainment industry's best deal-makers.

`` `Peacemaker' looks like it's going to do well,'' said David Davis, an entertainment analyst with investment bank Houlihan Lokey Howard & Lukin. ``It could be the third- or fourth-highest-grossing film of the fall season.''

Timing already has benefited DreamWorks. When Spielberg, Katzenberg and Geffen formed DreamWorks in late 1994, they probably had little idea that the exhibition side of the movie business would be booming three years later, thus circumventing what could have been a huge problem.

With an unprecedented expansion in U.S. theaters and the number of screens growing at nearly 7 percent annually, it will be far easier to find enough places for ``The Peacemaker'' than a few years ago. As the new kid on the block with no previous relationships, it would have been more difficult for DreamWorks to convince chain operators to give them screens if this were 1994.

``This summer is really the first time that movies have adequate seating,'' said Jim Tharp, DreamWorks' distribution chief. ``What that means is that if a theater has 24 screens, it can allocate six of them to the new movie and everyone who wants to see it can.''

The fledgling studio also made a wise choice by electing not to go up against the opening of ``Air Force One'' last weekend, which debuted with a stunning $37.1 million take. That was the best start ever for an R-rated movie.

``We think we've got a pretty good movie but there's no point in opening against something in the same genre that's going to attract between a third and a half of the overall audience,'' Tharp said.

Don Harris, DreamWorks' head of sales, said DreamWorks would have gone with the July 25 slot if Sony had put ``Air Force One'' elsewhere. ``We think Sept. 26 is next best slot, since there are a lot of similar films coming out during August,'' he said.

Tharp, a 25-year veteran of the General Cinema chain, and former AMC executive Harris, started working for DreamWorks in September 1995 along with a systems information specialist. They began hiring staff early this year and now have about 40 employees preparing for ``Peacemaker'' and two other releases opening in December: ``Mouse Hunt,'' a comedy with Nathan Lane; and the Spielberg-directed ``Amistad,'' focusing on a 19th century slave rebellion.

The DreamWorks logo of a boy fishing on a crescent moon first appeared in theaters as part of the short trailers, or teasers, for ``Peacemaker'' with ``The Lost World: Jurassic Park'' in late May. The standard 2-minute-30-second trailers came out with ``Contact'' on July 11.

Tharp and Harris have been meeting with distributors for the past year on a weekly basis. ``We do not have the same history with chains that other studios have developed over the last 20 years, but the response has been uniformly positive,'' Harris said. ``People in exhibition are not stupid; they know what kind of track record Spielberg and Katzenberg have.''

The executives have been trying to select the theaters that will generate the highest grosses, based on historical data showing which locations perform best for particular genres. They also have broken away from the standard approach to co-op advertising with chains by eliminating direct payments and instituting a percentage contribution.

DreamWorks will release six or seven movies next year, starting with a family drama called ``Paulie'' in the spring. The big summer release will be a World War II drama, ``Saving Private Ryan,'' directed by Spielberg and starring Tom Hanks, while the first animated feature, ``Prince of Egypt,'' is set for the winter holiday season.

After that, DreamWorks will release eight to 10 films annually - far less than one of the six major studios but enough to make it a threat to their rivals' market share, particularly if Spielberg creates another ``E.T.,'' ``Jaws,'' ``Jurassic Park'' or ``Raiders of the Lost Ark.''

In one important way, DreamWorks already is acting like a major player by following the trend of splitting the financing on future projects. It has struck a deal with Paramount to share the budget and revenues on ``Saving Private Ryan'' and the comet-hits-the-Earth thriller ``Deep Impact.''

DreamWorks' first film, ``The Peacemaker,'' will debut Sept. 26.

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Photo

Photo: (Color) DreamWorks' first film, "The Peacemaker," will debut Sept. 26.