Photograph by Michael Lewis for Fortune

Jeffrey Katzenberg and the Future of Hollywood

At DreamWorks Animation, he played a major role in reshaping the movie business. Here’s where he and the industry are going next.

The day after selling his company to Comcast cmcsa for $3.8 billion, Jeffrey Katzenberg is doing what he’s always done—presiding over back-to-back breakfast meetings. In Hollywood circles, the former CEO and cofounder of DreamWorks Animation—and the “K” in its original parent company, DreamWorks SKG—is known for his multiple morning mealtime tête-à-têtes. Today’s appointments are being held in a back booth at a trendy pizzeria in Los Angeles’s up-and-coming Fairfax neighborhood. It’s one of those spots that are cool precisely because they don’t look that cool, with its nondescript, neon-green sign and wood-paneled, sauna-like walls. (For even more hipster appeal, it’s located next to an Orthodox Jewish synagogue.) Katzenberg fits right in by looking inconspicuous, in a blue-and-white striped button-down and slacks. Rimless glasses frame his greenish eyes. Sure, he’s 65, but whatever Hollywood-concocted cleanse he’s been on for the past few decades, it appears to be working. Katzenberg has the energy and drive of a man at the start of his career, not the temperament of someone already eligible for senior-citizen discounts. He is direct, efficient. Take a short pause while asking him a question, and you sense his mind wandering, as though there were a million things he could have accomplished in that split second of wasted time.

Then again, there’s a juvenile and jovial side that emerges in conversation. He’s got a cackling laugh and a smile that stretches (almost) from ear to ear. This is, after all, the man who brought a flatulent green ogre and a pratfall-prone overweight panda to the movie­going masses. And his passion for the fun and quirky hasn’t waned: When we meet, he is about to head to the Burning Man festival with his 33-year-old son. It’s a fitting time for the long-standing studio exec to embark on a vision quest in the Nevada desert—because now that DreamWorks Animation is a part of Comcast, Katzenberg is out of the picture.

Not that he has any qualms about where he’s going next or about leaving the past behind. “I have no remorse,” Katzenberg says as I slide onto the bench across from him (it’s 9:15 a.m., and I’m his third meeting of the day). “I’m not sad.”

Jeffrey Katzenberg (left) with partners Steven Spielberg and David Geffen, announcing the launch of DreamWorks SKG in October 1994. DreamWorks Animation split off as an independent company with Katzenberg as CEO in 2004 Jeffrey Katzenberg (left) with partners Steven Spielberg and David Geffen, announcing the launch of DreamWorks SKG in October 1994. DreamWorks Animation split off as an independent company with Katzenberg as CEO in 2004Photo: Steve Starr—Corbis/Getty Images

The approximately $400 million he personally made from the deal may have something to do with his buoyancy. But it’s clear Katzenberg isn’t planning on spending the rest of his life bobbing around on a yacht in the Bahamas. In fact, he’s champing at the bit to start his next chapter: running his own investment firm. Over a bowl of seeded pecan granola and a Diet Coke, he is simultaneously taking calls on his cell phone and answering my questions. By his side is a printout of that day’s schedule, neatly folded. It looks full.

That befits someone whose highflying circle of friends attests to his indefatigability. “You can’t be more energetic, more ambitious, and more alert than Jeffrey,” says IAC chairman Barry Diller, who hired Katzenberg as his assistant at Paramount Pictures in 1974, his first big break in Hollywood. “He’s still just as smart and snappy as he was back then.”

“He’s called me up and said, ‘You’re gonna donate to this, and here’s how much,’ ” says actor George Clooney, who along with Katzenberg has hosted some of Hollywood’s biggest political fundraisers. “I suppose people hate when they see a call coming in from him because they know he’s going to make them do something.” Meg Whitman, the CEO of Hewlett Packard Enterprise hpe and a former DreamWorks Animation dwa board member, recalls a ski trip with Katzenberg: “He skis the way he works. You chase him down the mountain, then jump on the lift and have a very efficient conversation, and then you chase him down the mountain again. In an hour and a half you have skied more with Jeffrey than you normally ski in a day—and I’m a pretty good skier.” And director Steven Spielberg, Katzenberg’s longtime friend and former business partner, sums him up in one word: “Tenacious.”

Katzenberg admits his greatest motivator is, well, winning. An avid gambler, he got kicked out of summer camp at age 15 for playing cards (that was for M&M’s; these days he plays poker for much higher stakes). But DreamWorks wasn’t always a straight flush. The original production company never lived up to the expectations generated by its high-wattage founders: Katzenberg, Spielberg, and music and film mogul David Geffen. DreamWorks Animation, which became independent in 2004, had more success­—but never attained the scale to secure its future in an increasingly conglomerate-heavy Hollywood. As recently as April 19, nine days before the Comcast acquisition was reported, Wall Street firm Cowen & Co. reduced its revenue projections for DreamWorks Animation and reiterated the stock’s underperform rating.

Still, under Katzenberg’s direction, the animation studio, based in Glendale, Calif., was prolific, sometimes profitable—and most important, prescient. In 22 years, including as a division of DreamWorks SKG, it produced 32 films, garnering more than $13.5 billion in worldwide box-office revenue. Shrek 2, DreamWorks’ top-grossing movie, raked in $916 million by itself. And along the way Katzenberg pushed the studio to embrace some of the most disruptive forces churning the waters in Hollywood. He was early to recognize that companies other than Disney dis could turn animated franchises into enduring revenue sources, early to see the importance of streaming-media distribution, and early to spot China’s potential to reshape the industry.

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Channeling Wayne Gretzky, Katzenberg says he tried to go to where the puck was heading, not to where it was. Lucky for him, he adds, DreamWorks was nimble enough to skate along with him: “We were in a very advantageous position in that we were a little startup company.”

With the Comcast deal, that little startup belongs to a mammoth company with control over a large share of the Internet pipeline, a dominant position in cable, and, through its NBCUniversal unit, a major role in television networks and the film and theme-park businesses. The acquisition is a reminder of a fundamental lesson about today’s Hollywood: Go big or go home. Scrappy studios aren’t the future. At least for now, that belongs to huge conglomerates that can utilize a film’s intellectual property across all of their businesses—and across the planet.

Katzenberg foresaw that future and helped his studio make the best of it. Now the question is what part he’ll go on to play in it. He has hinted that his new firm will focus on the convergence of media and technology. But that’s all hypothetical. For now he’s got time to expound on lessons from his long career. He is efficient, but he is still a storyteller. Like many good yarns, this one starts at the end.

Read More: Former Pixar and DreamWorks Animators Helped Design This Adorable Robot

On a Wednesday evening in mid-April, Katzenberg got a phone call from Comcast CEO Brian Roberts. The cable guys had gotten wind that a Chinese private equity firm was in talks to acquire the studio, and they wanted a chance to bid. Their intel was right: Katzenberg’s board was far along in talks with the firm, which wanted to take the studio private and keep Katzenberg at the helm. (DreamWorks Animation has not disclosed the identity of the firm; other sources have reported that it was PAG Asia Capital.)

Ironically, one of Hollywood’s best-known dealmakers couldn’t do much to seal this deal. Katzenberg owned all of DreamWorks’ class B shares—with more than 60% of the company’s total voting power—but under the company’s governance rules, most of the negotiations were in the hands of its independent directors. He asked Roberts to call chairwoman Mellody Hobson, president of Chicago-based Ariel Investments.

The following morning, at 6 a.m. Central Time, Hobson’s cell phone rang, the first of many calls, meetings, emails, and text messages between her and Roberts. “No one got any sleep for a while,” says Hobson. She told Comcast that they would have to move fast—and that any offer would have to “meaningfully” exceed $35 a share. (DreamWorks Animation traded in the mid-20s at the time, but the Chinese offer gave the studio some leverage.) The cable provider, lambasted for years for its slow response time, pushed the deal at lightning speed. That weekend Roberts and other senior executives flew from their Philadelphia headquarters to L.A. to meet Hobson and Katzenberg for—you guessed it—breakfast.

By the end of April, DreamWorks had a pretty sweet offer. Shareholders would receive $41 in cash per share, a total equity value of $3.8 billion. Comcast would fold the animation unit into its Universal group. It would also snap up DreamWorks’ TV production arm, which has a burgeoning development deal with Netflix nflx . Comcast said in an SEC filing that the acquisition represented a “great opportunity to strengthen NBCUniversal’s film animation business, expand its theme-park attractions and enhance its position in the kids TV space.”

There was just one catch—Katzenberg would no longer run the show. Comcast had a stable of animation executives under the Universal brand, most notably its Illumination Entertainment unit, which created the Despicable Me and Minions franchise and is run by founder Chris Meledandri. Katzenberg would stay at least temporarily to oversee DreamWorks’ new media properties, including the YouTube channel AwesomenessTV. But that was a minor if not honorary role.

“The fact that I had to move on was jarring at first,” Katzenberg admits. “I was days away from doing just the opposite. It was a bit of a shocker.” The offer, however, was too good to refuse. “You have to give shareholders the best price,” says Hobson. “You don’t walk away from $41 [a share].” And recognizing that reality, Katzenberg acquiesced. “Jeffrey saw the great fit here and stepped up to say he was ready to pass the baton,” Roberts tells Fortune. “He stayed up the last night for nearly 24 hours, helping on all the open issues to make sure the deal could be announced in the morning as planned. Just fantastic leadership at all levels.”

On April 28, the DreamWorks Animation board voted. In a text message to Roberts, Hobson conveyed the news: “It’s done.” On Aug. 22, the deal officially closed. That afternoon, Katzenberg slung his backpack over his shoulder, got into his white Tesla Model S, and drove off of the DreamWorks campus for the last time as CEO.

Read More: Transcript: Jeffrey Katzenberg and Jennifer Yuh Nelson at Fortune Global Forum

It had been clear for quite a while that DreamWorks Animation wouldn’t exist much longer as an independent company. “You saw the handwriting on the wall,” Hobson says. “These standalone studios, they are a thing of the past.” Hobson should know: She’s the spouse of Star Wars creator George Lucas, who sold his studio, Lucasfilm, to Disney in 2012.

Katzenberg (right) with Mellody Hobson, DreamWorks Animation’s chairwoman, and her husband, Star Wars creator and producer George Lucas. Hobson led negotiations when the animation studio sold itself to Comcast this past spring.Photo: Alberto E. Rodriguez—Getty Images

Katzenberg had learned similar lessons from the original DreamWorks SKG. At its inception in 1994, it aimed to become the first new major studio in 65 years. But despite some hits, including Saving Private Ryan and Gladiator, Dreamworks SKG floundered on its own. In 2006, not long after spinning off its animation division, it sold its live-action film business to Viacom’s Paramount Pictures. Paramount eventually spit the live-action studio back out, and after several plot twists, Spielberg and a handful of other investors brought it back to life last year, signing a five-year distribution deal with Comcast’s Universal Pictures to release its films.

“We promised the moon, the stars, and the sun,” says Katzenberg. “We had to paint the most unbelievably optimistic and ambitious idea ever. But the thing I came to understand—and so did Steven and David—was that the promise was always going to be greater than the reality.”

But in animation, as Katzenberg realized, the gap between promise and reality was narrower. Indeed, the animation division of the trio’s creation has spun out more valuable IP than any other endeavor of the original studio. Developing cartoon movies for kids, done right, can pay off big: If you create lovable and “sticky” characters, you can relatively easily monetize that initial IP investment across multiple movies, TV spinoffs, and lines of merchandise.

Of course, it’s only relatively easy. The process is slow and costly. Films take three to four years to complete, progressing from ideation to storyboarding to using computer-generated imagery to animate minute details like the movement of hair and the texture of powdery snow. At DreamWorks Animation, a typical movie cost upwards of $140 million—not including marketing. Still, for Katzenberg, the process hatched at least four globally successful fran­chises: Shrek, Kung Fu Panda, Madagascar, and How to Train Your Dragon. Over a 22-year span, the studio’s films brought in an average $421 million each at the box office. And that doesn’t include income from licensed videogames, toys, and other merchandising ephemera. “Movies have become a portfolio,” says Katzenberg. “Inside that portfolio you’ve got some blockbuster hits, blockbuster disasters, and some in-betweens.”

The problem is that for a smaller studio, a few consecutive disasters can put the portfolio deep in the red. From 2001 to 2012, DreamWorks Animation had 17 hits in a row. But then three back-to-back flops—Rise of the Guardians, Turbo, and Mr. Peabody and Sherman—lost more than $150 million collectively, forcing the studio to take write-downs.

“We promised the moon, the stars, and the sun,” Katzenberg says of Dreamworks. “But the thing I came to understand was that the promise was always going to be greater than the reality.”

Being publicly traded made life tougher still. “When you’re public, the pressure to succeed on each movie is enormous,” says Bob Iger, chief executive officer of Disney and a career-long peer, partner, and competitor of Katzenberg’s—himself a contender to run Disney in the early 1990s. “Because of the creative process, you’re bound to have hits and misses. There is no tolerance for the misses.” Conglomerates like Disney and Comcast, with their many distribution channels and revenue streams, can shrug off a flop. DreamWorks, with its nearly exclusive reliance on animated movies and a pipeline that could produce only one or two films a year, saw its stock plunge whenever a film had a weak opening weekend—5% in a day after Rise of the Guardians, 7% in a day after Turbo.

Katzenberg believes that under Comcast, whose annual revenue is more than 80 times greater than DreamWorks Animation’s in its best year, the studio will not only find comfort but also finally reach the scale it was destined for. And assuming Comcast decides to deploy Shrek the Ogre and Po the Panda across its theme parks and TV networks, there will be a little piece of Katzenberg in that many more American homes.

Of course, thanks to a pioneering partnership that Katzenberg helped engineer, DreamWorks Animation already has an outsize presence in home streaming. Katzenberg goes way back with Netflix and its chief content officer, Ted Sarandos. In 2004, when Netflix made its money shipping DVDs in its iconic red envelopes, they collaborated on an innovative marketing ploy. “The first time we ever deviated [from the red envelopes] was when we did the green DVD cover for Shrek 2,” recalls Sarandos—green, of course, being the color of the titular ogre’s skin. “I’m sure it was Jeffrey’s idea.”

An even better idea—one for which Katzenberg credits former DreamWorks Animation president Ann Daly—was to sign on early to Netflix’s streaming service, at a time when most studios were reluctant to get close to the tech maverick. “Because of the way kids view our movies, the idea of being on demand at any time was a perfect fit,” Daly recalls in a phone interview. In 2011, DreamWorks Animation made the unprecedented decision to switch its film output deal from HBO—its partner for 16 years—to Netflix. That meant that after theatrical release, its animated films would be available exclusively on Netflix. “We were the first studio to do that,” says Daly, who has left DreamWorks since the Comcast deal.

In the summer of 2013, DreamWorks struck another deal, agreeing to supply Netflix with 300 hours of original episodic programming over several years. The new shows would be based on DreamWorks IP, including characters like Puss in Boots from the Shrek movies and a reimagined version of the cult 1980s hit Voltron. In January the companies extended their partnership, agreeing to create more hours of original programming (about 1,600 episodes) and to start distributing them on a global scale.

“Jeffrey’s belief in digital was there a long time ago,” says Jason Kilar, a former DreamWorks board member and former CEO of streaming service Hulu. “Most people, when they hear about something small and new, they ignore it.”

Ultimately, Katzenberg saw a huge opportunity in Netflix and a new approach to monetizing DreamWorks IP. Other content creators are eager to follow that template. Katzenberg says the Netflix tie-in helped make DreamWorks Animation even more attractive to Comcast. Jeff Shell, chairman of Universal’s Filmed Entertainment Group, concurs: “We literally didn’t have the capability to make animated kids’ TV until now,” he says, noting that Netflix is “increasingly the primary way that kids are discovering and watching TV.”

It may seem hard to imagine a cozy Comcast-Netflix partnership, given that Netflix so forcefully lobbied against Comcast’s 2014 bid to buy Time Warner Cable twc . But a drastically changing industry can make for some pretty strange bedfellows.

Read More: China’s Richest Man Set to Seal 2 Billion-Dollar Hollywood Film Deals

I’m about halfway through my breakfast pizza (I told you this restaurant was cool) when Katzenberg pulls out his now-out-of-date business card. We’re talking about Oriental DreamWorks, the joint venture he set up in China in 2012, and it’s time for show-and-tell. On one side of the card is what you’d expect: Katzenberg’s name, title, and contact information. To the left is DreamWorks’ iconic logo—the silhouette of a little boy fishing while seated on a crescent moon.

Then Katzenberg flips the card and shows me the back. “I had this made years ago, and I’m not kidding you, this was a game changer,” he says. On the other side of the card are the same details, only in Chinese characters. More strikingly, the logo has been changed. Instead of a little boy, a huggable panda bear is nestled into the moon. And, yes, the bear is fishing.

Katzenberg and Li at the China premiere of Kung Fu Panda 3, the first Oriental DreamWorks production.Photo: ImagineChina—AP Images

“When I showed that to everybody [in ­China], they went, ‘Okay, we get it,’ ” says Katzenberg. “The idea that Po,” the bear from Kung Fu Panda, “could become their Mickey Mouse and that DreamWorks could become their family brand, that’s what got people excited.”

About six years ago Katzenberg began to see a change in the market and political atmosphere in China and to think the time was ripe for a partnership. On a trip to London in 2011, he sought advice from WPP chief executive Martin Sorrell. The global ad agency head told him to talk to Li Ruigang, a WPP board member and chairman of an investment firm called China Media Capital. “I went back to my hotel room and called him,” says Katzenberg. “I remember looking out at Hyde Park and pitching my brains out to someone on the other side of the globe whom I’d never met before.”’

Katzenberg wasn’t calling because he wanted distribution in China—his studio already had that. His idea was to set up a joint venture to develop movies for a Chinese audience. Making it truly big in China, he realized, would take a lot more than dubbing American movies into Mandarin. Yes, American films tend to fare well in China—even when they’re domestic flops. But China’s government makes it challenging to market and distribute them, enforcing strict annual quotas on imported flicks. “I thought, what China would want above all else was their own Disney,” Katzenberg recalls. “They admired Disney … but the thing we see time and time again in China is that they want their own version of those things.”

Li encouraged Katzenberg to get on a plane to visit him in China (Katzenberg has returned about once a month ever since). They hatched an idea for a company in which Chinese animators would develop made-for-China movies to be exported globally. DreamWorks Animation would own a 45% stake and coproduce films. Li helped Katzenberg win state approval and raise money from Chinese investors. By 2012, Oriental DreamWorks was formed. (“They came up with the name,” says Katzenberg. “We would have thought that’s prejudiced, but they thought the opposite.”)

Katzenberg (third from right) and Li Ruigang, chairman and CEO of China Media Capital (fourth from right), at the 2014 unveiling of a master plan for the Shanghai DreamCenter entertainment complex. Li and Katzenberg cofounded Oriental DreamWorks, a joint venture whose efforts to develop madefor-China movies are a sign of China’s growing influence in Hollywood.Photo: AP Photo

So far, Oriental DreamWorks has released only one movie: Kung Fu Panda 3—but it was a promising start. Its opening weekend this January was the best ever in China for an animated movie, and globally it has taken in more than $500 million. And being a product of the joint venture rather than a DreamWorks Animation film conferred real advantages. For example, makers of imported movies aren’t allowed to start marketing them in China until the government’s film commission gives them a theater release date—often just a few weeks in advance. Oriental DreamWorks, on the other hand, had plenty of time to bombard Chinese consumers with ads.

In the screenplay of China-U.S. collaboration, we’re barely past Scene 1. Oriental DreamWorks was slated to release one new movie a year starting in 2018, but now that Comcast owns DreamWorks’ share, it’s not certain that plan will stick. Li suggests the relationship’s business model will continue to change. “I think the market is still evolving so fast,” he told Fortune. Even Katzenberg is uncharacteristically cautious: “The payoff,” he says, “isn’t clear yet.” Still, other American studios are following DreamWorks’ lead: In 2015, Warner Bros. unveiled its own joint venture with China Media Capital, called Flagship Entertainment Group, producing Chinese-language films for worldwide distribution.

Figuring out how to make China work may be part of Katzenberg’s next chapter. He is setting up a new office (in L.A., not far from the pizzeria) and has reportedly recruited several partners and investors for his new venture. He’s mum on the details, telling Fortune only that “what’s happening in tech and new media has completely captivated me.” But sources close to Katzenberg say he’s intrigued by the model his longtime mentor, Barry Diller, has built. IAC, Diller’s conglomerate, owns everything from dating services like Match.com and Tinder to video sites like College Humor and Vimeo. How Katzenberg will put his own spin on that model remains to be seen.

What’s absolutely clear is that he has zero plans of retiring. Ever. “No, not possible,” he says incredulously when asked. “My work is my happiness.” Appropriately enough for a man who has sold millions of movie tickets to kids, he reaches into his animated catalog to sum up his philosophy. He quotes Oogway, an elderly tortoise and mentor figure in Kung Fu Panda: “Yesterday is history, tomorrow is mystery, but today is a gift. That is why it is called the ‘present.’ ”

How DreamWorks Was Able to Break into the Chinese Movie Market:

A version of this article appears in the September 15, 2016 issue of Fortune with the headline “It’s Jeffrey Katzenberg’s Future.”

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