Comapring and Contrasting the Strategies of Major Animation Studios

Business strategy is a class that many MBA programs (including mine) require students to take. The notion is that there is little point in learning a lot of business knowledge if you cannot execute or implement it correctly. Strategy plays a large role in that regard because it gives focus to where a studio or organisation is going and how it is going to get there. Today, let’s take a quick look at the apparent strategies of the major studios and what it might mean for where they are going.

Disney

As obvious as this may seem, Disney’s strategy when it comes to animation is not as friendly to the technique as they would have you believe. Are they making a lot of it? Sure, but what is the strategy behind it?

Disney executives would like you to believe that as the guiding light of animation for much of the 20th century, they are ushering it into the new era. In fact, the opposite is true. Disney animation in it’s traditional (non-CGI) form is dead (at least theatrically), and what remains is, for all intents and purposes, a pale facsimile.

I do not mean this statement to be profane in any way; plenty of talented artists continue to be employed at Disney. Their strategy though, has long shifted from being the pioneer of animation, to making the quick buck. Hitherto the purchases of Pixar, Marvel and Lucasfilm.

The apparent strategy is to simply buy companies with existing hit properties and milk them instead of creating risky original properties instead. Sure Frozen is semi-original, but it uses the well-worn fairytale story as a crutch; Wreck-It-Ralph relied heavily on existing video game characters. The rest of Disney’s slate of projects looks incredibly thin compared to the corporate subsidiaries and numerous articles abound as to the demise of the Disney studio proper.

DreamWorks

This studio’s strategy is by far the most entertaining at the moment. Moving in all directions into TV, technology, internet video and theme parks, Jeffrey Katzenberg is making a determined effort to give his studio the chops to survive on its own.

The question is, what kind of organisation will eventually result? While it is clear that DreamWorks needs to diversify in order to survive, it is not so clear where they will end up.

The notion of the diversified conglomerate not unlike other studios is the obvious choice, but DreamWorks is making a push on the technological side of things too. Clearly it intends to be more than a an entertainment company even if that remains its focus.

The other option is that of a takeover. It is rare for a CEO to run their company for the sole purpose of being taken over, but it is clear that a company that appears to be growing is much more valuable than one that has just one core business. Ergo the more businesses that DreamWorks is in, the more money a buyer will have to cough up when the time comes to write the cheque.

In any case, a diversified, independent DreamWorks appears to be the goal, at least for now, and their strategy of diversifying as quickly as they can seems to support that idea.

Sony

It would be easy to take the rash approach and say that Sony intends to make more Smurfs sequels, but the studio itself seems to be quite content to reside within the larger Sony corporate ecosystem. Their films are successful and make money and as long as head office is satisfied, they should have little to worry about.

Where Sony is going is hard to say; the studio is a department instead of a company and Sony itself has been paralysed for the last decade or so; incapable almost of the ingenuity and technological brilliance which permitted it to dominate the electronics landscape.

It’s safe to say that Sony Animation exists to make movies and make movies alone. It is perhaps the truest form of corporate animation studio today.

Blue Sky (FOX)

Despite too many successful Ice Age sequels, the Connecticut studio suffered a tad when its original epic, ‘Epic’ didn’t quite light the box office on fire. The studio is also in a bit of a quandry insofar as parent FOX distributes DreamWorks films as well. Thus far there appears to be no sense of favouritism but it does mean that Blue Sky may start to see more direction from FOX.

As of now, the strategy must be to simply make great films; on par with Sony, but in a distinctly more precarious manner in light of FOX’s relationship with DreamWorks.

Illumination

Bringing home the bacon with Despicable Me 2 ought to keep this studio in the good graces of Universal for a few more years at least. Another corporate possession, Illumination seems content to put out animated films and nothing more.

It’s strategy is unknown, but Universal would be unwise at this point not to expand it’s operations (into TV or otherwise), especially in light of DM 2.

Conslusion

It’s incredibly tough to determine which studio is following the best strategy. They are, after all, following paths which suit them or are chosen for them. In the long run. even given DreamWorks precarious position as an independent company, theirs is the strategy that I would bet on. They are not simply making films or figuring out how to make easy money. Nope, they are doing that but also setting the company up for growth. With that in mind, they look set to continue their growth despite setbacks in theatrical animation.

 

 

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