Dreamworks maestro Jeffrey Katzenberg on his animated masterpieces, his friendship with Barack Obama...and why the Scots accent is perfect for making movies

It is late 1950s New York, a city very different from today. Some things never change, though. Children still daydream, imagining fantastic worlds amid concrete reality.

Children like this one, standing at the bars of a cage at the Central Park Zoo. Jeffrey lives near the zoo.

Every day, on his own, he gets on a bus and a subway to school in the Bronx.

The city is a treasure chest for children, but Jeffrey loves the zoo. Every time he goes he watches the staff tending to the animals, cleaning their cages, feeding them what looks like the best steaks in town.

Wow, he thinks, these animals live on Fifth Avenue, the ritziest place in New York. What would happen if they had to go back to Africa and live in the wild?

Jeffrey doesn't know, but one day he will be that rare beast, a genuine Hollywood mogul, who will take this idea and make an animated film called Madagascar.

Once sequels are added, the franchise will gross almost $2 billion worldwide.

With all the other movies that Jeffrey oversees, he will one day be worth, according to the Los Angeles Business Journal, close to a billion dollars.

He will, moreover, be a kingmaker in Washington DC, raising millions for the Obama cause.

Whoever said dreams cannot come true?

Raiders of the Lost Ark, Saturday Night Fever, Good Morning Vietnam, Dead Poets Society, Pretty Woman, Three Men and a Baby, Beauty and the Beast, The Lion King, The Little Mermaid, Shrek, How to Train Your Dragon, Kung Fu Panda, on and on … if you have spent any time and money at the pictures in the last 35 years, chances are you have seen many a film that Jeffrey Katzenberg, now the 63-year-old CEO of DreamWorks Animation, has had a hand in.

This year, DreamWorks is celebrating a notable birthday. It has been 20 years since Katzenberg, Steven Spielberg, and music industry boss David Geffen founded the studio.

Even given the talent and track records involved it was a risk, but one that, a couple of recent dips aside, has been a huge success. Its latest release, Penguins of Madagascar, opens on December 5.

My interview in a London hotel is set for 12.20pm but, I am told, I will be taken along the corridor at 12.17pm so there is no danger of being late. Such punctuality is unheard of for press junkets, where stars and their foibles rule, but good timekeeping is one of Mr Katzenberg's things.

Later that day, addressing young filmmakers at a London Film Festival industry event, he will tell them that one of the first lessons he learned in business was to be punctual.

"Respect people's time. Their time to them is as valuable as your time is to you."

Other fundamentals: answer and return every phone call, and every letter, every day. Oh, and always try to exceed expectations.

First impressions: he is greyhound wiry, like Obama, but shorter. The suit is immaculate, all business, as are the steel-rimmed spectacles and the attitude in general.

Even the caffeine-free Diet Cokes on the sideboard give the impression of a man who likes to be in control. It is going to take an effort to loosen him up.

Why, anyone would think he once wrote a Vesuvius of a memo about Hollywood filmmaking that became the starting point for the film Jerry Maguire. Oh, that's right, he did. More later.

Though Penguins is keenly anticipated, he says he is as nervous about its release as any other picture.

"That's the thing that is so exciting and scary about the movie business, there is no sure thing. Every time is a gamble." It is never entirely a punt in the dark, however.

"We actually engage with the audience very early on. We bring audiences in to see our work as it is in progress. There's a sort of honest reaction feedback that you get from people. It's not math, it's not testing, it's not like you can put a bunch of dials on somebody's fingertips and gauge, but you sit in a theatre and, you know, when an audience is bored their butts move. Kids get up, they go to the bathroom, they wander around."

As he warms to his theme he starts to punctuate his sentences with New York barks.

"When it's funny, people laugh! It's involuntary! Can't stop 'em!"

DreamWorks' cultural influence stretches far, wide, and deep. Courtesy of Shrek (Canadian Mike Myers' adopting a Scottish accent, The Proclaimers' 500 Miles) and How To Train Your Dragon (voiced by Gerard Butler, Craig Ferguson, Ashley Jensen and many another Hollywood Scot), it has turned out to be a particular friend to Scotland.

"Every person has a melody," says Katzenberg, when I ask him to explain the Scots accents in DreamWorks films. "There are certain parts of the world whereto my ears, and I think to most people's ears, there is just a romanticism about a melody.

Scottish is melodic. Just the way in which people talk, the melody of their voices, is quite beautiful. I also find that about Italians speaking English."

Katzenberg is best known today for animation, and for helping the genre regain respectability as an art form.

In 2001, Shrek became the first animated film in 50 years to be invited to show at Cannes (the last was Disney's Peter Pan). Shrek also went on to win the first Oscar for best animated feature.

But animation was not where Katzenberg, the son of a stockbroker and an artist, started. His first job, when all of 14, was as a gofer on a campaign to elect a New York mayor.

His first proper job was at Paramount Pictures, and his first task reading a manuscript. Not easy for someone with dyslexia, but he was on his way. He stayed at Paramount for 11 years, and it was there that he met Michael Eisner, the friend and colleague with whom he was to have the best of times at Disney, then the worst of times.

When Katzenberg arrived at Disney in 1984 the studio was in the doldrums. Besides managing live action hits such as Three Men and a Baby, Good Morning Vietnam and Pretty Woman, Katzenberg was responsible for putting the animation department back on course.

It powered back to box office and critical acclaim, the money poured in, then tragedy struck. Frank Wells, the president of Disney and second in command to Eisner, died in a helicopter crash.

It was thought Katzenberg was a shoo-in, but it was not to be. Katzenberg left, lawyers became involved, and Katzenberg received a payout estimated by James B Stewart, in his book DisneyWar, to have been $250 million.

Though painful at the time, was the split with Eisner one of the best things to have happened to him? "Not one, THE!" he laughs. "Yeah, getting fired was the best thing that ever happened to me."

Katzenberg admits to not possessing "a rear view mirror". Looking back is not for him.

"The only things I actually find useful and I do look back on are the things I got wrong. My best lessons are from my greatest mistakes and failures."

What would the Disney lesson be? "I thought I'd work at Disney for the rest of my life, I couldn't imagine I was ever going to be anywhere else. But having been pushed out, what happened out of that was better than anything that could have happened had I stayed there."

I wonder, too, if it taught him never to invest too much in one person. No, he says, citing the influence of mentors throughout his career.

"I've had great teachers, including Michael Eisner." But it's like a marriage, he says, in which two people outgrow each other. And sometimes those divorces are painful.

All of this is said in a tearing rush. I interrupt, asking if he speaks to Eisner now. "No." There is barely a second's pause and he resumes what he wants to say.

"The worst comes out in those circumstances sometimes. Somebody says something, somebody's feelings get hurt, so you say something back and it gets more hurtful and then ultimately it just turns into a, you know, somewhat ugly mess."

Things moved fast. Within a fortnight of leaving Disney, he, Spielberg and Geffen had the idea to start DreamWorks. Katzenberg downplays his billing among the trio.

"In 1994 Steven Spielberg had won the Academy Award for Schindler's List and he had just released Jurassic Park.

The pinnacle of his success. He had never not had success but that was yet another plateau for him. David Geffen had just sold his record company for the third or fourth time for another couple of billion dollars and was just again on this great, extraordinary ride.

"I was fired. The boot. Out the door. Ugly. Right? The fact that I, somehow or another, was able to convince these two geniuses that one third of me was worth one third of Steven Spielberg, and one third of me was worth one third of David Geffen is one of the great hustles in humanity. If you went to Vegas and tried to make a bet on that nobody would take it."

Yet Katzenberg had shown he could make quality pictures that were highly profitable. He had demonstrated, moreover, that he was one of the industry's thinkers.

How did the industry know that? From the famous memo he wrote in 1991 at Disney.

Meant for the eyes of his executives only, the leaked 28-page missive laid out in often brilliant detail the pitfalls of the "blockbuster mentality" that Hollywood was slipping into, where pictures were growing bigger and less original and star salaries were going skywards.

In Katzenberg's view, movies had to go back to basics in finding and nurturing talent and original ideas. "Magic is the key," he wrote. Smaller, but no less profitable, was the answer.

The effect was electrifying. In Jerry Maguire, Tom Cruise's character, having written a similarly shame the devil memo, has to box up his worldly goods as the whole office watches.

Nothing like that happened to Katzenberg, but to this day he is not keen to revisit the episode.

"I have never gone back, with one exception [The Prince of Egypt), to watch a movie I was involved in making as either a studio executive or producer at DreamWorks … I don't revisit them. I put that memo right there," he says at the industry event. "I have no intentions of ever re-reading [it]. Someday I'll watch The Lion King again but I'm pretty confident I'm not going to read that memo."

One can surmise that he still believes that "magic is the key".

His day job, though to make money like any business, is founded on dream-weaving.

Perhaps that is what attracted him to Obama. Katzenberg and his wife, Marilyn - the couple, who have two children, celebrate 40 years of marriage in January - saw Obama's landmark address to the Democratic Convention in Boston in 1984 on television.

A couple of years later Katzenberg arranged a "small dinner" for him.

A word about Katzenberg's small dinners. In Double Down, Mark Halperin and John Heilemann's electrifying account of the 2012 run for the White House, the authors tell of a fundraising dinner at the home of George Clooney, organised by Katzenberg, which raised $15 million.

Then there was the get-together, attended two presidents (Obama and Clinton), at Katzenberg's home, where the guests also included Steven Spielberg.

He has given millions more to a number of charities and sits on many boards, including The Michael J Fox Foundation for Parkinson's Research.

Of that first dinner long before Obama became president, Katzenberg recalls: "I really was so impressed with the quality of his character. And I still am today. Whatever people say, I think he has a great heart and I think he has a true North in terms of goodness.

"So whatever people may suggest of things that he didn't do or he should have done, or should have done more of, or should have done less of, fine, but it's an impossible job and I'm not sure anybody could really succeed at it in the world we live in today."

Hillary Clinton would make a great president, he says, should she run.

"Because she has so many decades of experience, if it is possible for someone to bring function to our dysfunction she has a very great shot at it, better than anyone else."

Back to business, show business. Penguins of Madagascar should prove a welcome hit.

This summer, How to Train Your Dragon 2 was a smash, earning more than $615 million worldwide, but it came on the back of the poorly performing Rise of the Guardians, Turbo and Mr Peabody & Sherman. Last year, 350 out of 2,200 DreamWorks jobs went.

"These things aren't fatal," says Katzenberg of the disappointments. "They're painful, but they are not fatal." The studio had made 17 movies in a row, and every one was a hit, he says.

"The bad news is everybody expects the next 17 to be hits too. But that's hard. So I guess we were overdue."

Last week, the Los Angeles Times was reporting "a rough month" for Katzenberg in which he had been "rebuffed by three high-profile potential buyers", including Hasbro Inc.

One analyst quoted by the paper said the company was facing "major operational challenges".

A Variety headline asked "Why can't Jeffrey Katzenberg find a buyer for DreamWorks Animation?"

Recall, though, that Katzenberg mantra about exceeding expectations.

When I speak to him in October he says things are changing, but the good ship DreamWorks cannot turn on a dime.

His eye is on future success, particularly in the east, in digital, and in television deals. An animation studio has been opened in Shanghai.

Besides the next Kung Fu Panda movie, the 200 artists are working on two original films based on Chinese stories.

Five years from now, China will be the largest movie market in the world, he says.

"It's going to pass $5 billion this year." Chinese authorities have given the studio "enormous support", with no interference. "We've never been asked to change a single frame of a single movie."

We are six minutes past the 22 that Katzenberg likes to spend on meetings (another tip for business success). He stands up. No plans to retire then?

In response, I get the kind of verbal Bronx cheer, delivered with a laugh, that the young Jeffrey might have been familiar with in his school days before going off to daydream in Central Park Zoo.

"Please, no. I'm just getting started."