Here’s How AI Is [Eventually] Coming For Your Animation Job

Analysis /

Here’s How AI Is [Eventually] Coming For Your Animation Job

A grey machine with buttons and dials with the words 'DJ 3000' in large yellow letters at the top.
The ‘DJ 3000’ used to threaten radio hosts in The Simpsons.

If you work in the animation industry, how worried should you be about AI stealing your job? Well, the answer isn’t a straight one unfortunately, but that doesn’t mean that AI isn’t coming for your job; it just means it isn’t coming for it in the way you may think.

Artificial Intelligence or ‘AI’ is a trendy buzzword to describe a skill that computers have had for decades. (If you’ve ever used a filter in Photoshop, then you’ve used ‘AI’ on a more basic level.) The only thing that’s changed is the massive computing power that’s become possible in recent years, and the ability to parse enormous volumes of data that such power provides.

Years ago, in an article I can no longer find, the author made a point of discussing Michael Bay’s approach to CGI in his Transformers films; in other words, the excessive amount of it. The one point that struck with me from that article was the one that said something to the effect of ‘if you can be replaced by a computer, you will be replaced by a computer’. A scary thought to be sure, and it’s true for every job besides the ones that are physically demanding (although technology has come for those in the past too).

We’ve seen it before

So that got me thinking about how a computer could come for workers in the animation industry. But first, a caveat: we’ve been here before! The prospect of technology cleaving off whole departments is nothing new, even within animation. The Xerox machine (photocopier) took over the role of the inker in the 1960s. Two decades later and it was the painter’s turn as CAPS was developed. Since then there’s been the transition from traditional hand-drawn animation to 2-D and 3-D CGI, and digital projection has supplanted 35mm film.

What’s important to remember is that the Xerox machine, CAPS, and CGI software such as Renderman, Adobe Flash, etc. are all just tools. While they did replace individual workers in roles, they did not replace all of them, and did not do so all at once; Disney animators working on TRON would not become “obsolete” for more than a decade and even then hand-drawn animation continues to be made. These tools also opened up new roles that did not exist before. (Here’s a thought: does a second of hand-drawn animation require more or fewer people to create than one second of CGI animation?)

Is AI simply a tool or is it something else though?

One the one hand it is definitely a beneficial tool to some. Need a story treatment but stuck with creative block? ChatGPT could probably throw you a lifeline with an idea. On the other hand, it is definitely a threatening tool to others. Visual development artists will find intrusions into their work if they have not done so already. After all, why pay someone to create a visual concept for a show from scratch when you can just throw your desires into a machine and have it do the hard work for free? And if you’re a writer, what can help you in one way could hinder you in another as studios no longer look for you to write scripts so much as finesse what a machine drafted first. UPDATE: as of writing, the WGA has decided to strike with one of their concerns being the use of AI to replace writers, and the use of writer’s creations in the training of AI models.

My point is that the ‘AI’ is going to be both a benefit and a threat. The low hanging fruit of static art, music, and the written text is being picked at now. Motion pictures will come later this decade.

How worried should you be?

Perhaps not as much as the media and AI hype men are making out you should be, but also not enough that you can ignore it completely. A computer can apparently write text in the style of a human sort of well, and can even create a new song in the style of Drake. But the text isn’t perfect, and the fact that AI can create a song by a top artist probably says more about the sorry state of popular music than it does about its creative chops.

From the consumer’s perspective it’s a different story. The possibilities include your favourite song being used to extrapolate and create additional, AI-generated variations. As I wrote back in 2016, a company like YouTube is ideally situated to exploit the audience’s demand for more of the same based on the amount of data they collect. It is not a far stretch to see episodes or shows tailor-made for you and you alone. AI will get us there and satiate the intense desire for entertainment.

Except that there is a difference between the kind of content that YouTube contains and more traditional channels. YouTube is the fast food to Disney’s four course meal. As I noted in 2016, a hefty chunk of the audience is more than happy to subsist on fast food with the occasional more substantive meal.

Nibbling Around the Edges

Ultimately what we are going to see is AI nibbling around the edges. Scripts will get some help, visual development will get a shot of interpretation, animation itself will get some AI-infused movement and/or automation (i.e. no more inbetweeners), even musical scores will go through the AI ringer. It isn’t all going to change at once; especially since AI art has a way to go before it can even accurately recreate something that already exists.

Think of it as akin to the switch from hand-drawn to digital animation. A whole slew of young artists got a headstart by only learning digital. Many older workers were able to transition with a bump or two. A few masters couldn’t make the leap but while their skills were no longer useful to production, their knowledge of technique was immensely valuable to younger artists. AI technology in production will follow a similar pattern.

Preparing for the AI Threat

How can you insulate yourself against the AI threat? On the one hand, you can’t, unfortunately; job opportunities will just get fewer and fewer. What you can do, though, is learn whatever new skills are coming to the fore. Check job listings to see what skills employers are starting to look for. E.g. AI can spit out stories, but whoever can input the best prompts and get the best results will get a gig. Knowing how to pull the right levers in the right way in Stable Diffusion will give you an advantage over someone who does not. Look at ways your current skills can translate into new ones. Seek out training or certification on new technologies in the same way you do for animation software now.

A saying I’ve come to respect is the one that says ‘technology never goes backward’. That is, once a technological advancement is introduced, there is no going back. The earth may be dying, but nobody is pulling the air conditioner out of their house. Once people saw talkies, they weren’t going to content with silent films any longer. The same is true with AI and animation: as it changes the production landscape, nobody will go back to relying on manual processes. They either won’t commit the time and resources, or they simply won’t be satisfied with the results. That’s disappointing to write because the immense human creativity out there will take a hit, even if it is ultimately allowed to shine through. It is, however, the best way to understand how change will affect you.

Fifteen years ago, the WGA went on strike partly because they perceived the rise of streaming would have an adverse effect on their member’s incomes (writers at the time did not receive residuals on streamed content; only broadcasts and home media sales. This time around they (personal opinion) are attempting to close the door after the horse has bolted with regard to AI use. A resolution will be reached or course, but will the AI can simply be kicked down the road (for studios to exploit in the interim) or will we see writers having to embrace it?

It’s hard to say exactly when AI will consume current jobs and roles, but preparing for the inevitable is the best course of action. How will you do so?

As a parting message, here is a film created to document the last day of using hot metal type to create The New York Times before the newspaper switched to digital typesetting. It’s a fascinating documentary on technological change:

Here’s How AI Is [Eventually] Coming For Your Animation Job Read More »

AI Art Has a Looooong Way to Go

Analysis /

Can Artificial Intelligence (a.k.a. regular computing) generate art? The jury is still out (even if the US copyright office is not). I’m skeptical and an idea popped into my head last night; can ‘AI’ generate something even remotely close to the real thing and how would they compare? E.g. what if we asked it to generate images of actor John Goodman as Fred Flintstone?

Readers of a certain age may already know where this ends up but for those unfamiliar, here is a primer:Yes, that’s actors John Goodman and Rick Moranis as Fred and Barney respectively in the live-action Flintstones movie from 1994.

I put out a call on Socel for someone to have a go at my idea since I didn’t think I could do it myself and lo and behold, Wobbe F. Koning replied and delivered!

So can current AI technology generate art that’s close to reality or is if just a whimsical plaything? Here’s the results.

Here’s MidJourney’s attempt:

And here’s Stable Diffusion’s attempt

Will you have nightmares tonight? I think I will.

Add your thoughts with a comment!

AI Art Has a Looooong Way to Go Read More »

Warner Bros. Discovery Shoot Themselves in the Foot and Act Like Everything’s Fine

Analysis /

It boggles the mind! At a time when every streaming service is racing to cram as much content as they can afford into their services, one decides to go in the opposite direction.

You’ve not doubt seen the stories; dozens of animated shows disappearing from Warner Bros. Discovery’s streaming services, almost-complete films scrapped, artistic endeavours cast off as mere implements of a tax-avoidance strategy, creators finding out their own shows were yanked via social media. All in all, it’s a series of bad news eminating from the company no matter who you are. And before you ask, no, the company’s stockholders didn’t fare any better either.

The most obvious question (why?) is a bit odious. Numbers were crunched, the costs of merging two companies have to be met, and the results say as much. Except the response is near-universal and the only people that are apparently pleased are those at the very top. The less obvious questions concern the decisions that revolve around the strategy. The company cans a load of content to save a buck; then what?

Well, on the one hand, the company thinks that by slimming down their offerings, they can create growth from a smaller core audience. On the other hand, that’s 20th Century cable network thinking in a 21st Century streaming age. Perhaps it’s no surprise given that HBO pioneered the premium approach in the first place by charging more, but offering the kind of entertainment you couldn’t find anywhere else. That’s a business model that’s over the hill though. Streaming is a winner-take-all game that Hollywood only realised too late when Netflix lapped up streaming rights for basically nothing and locked studios out of their own content for those crucial first years.

You see, with streaming, you either offer everything to everyone, or watch consumers use your competitors. Now everyone is playing catch-up and only Disney, with its exceptionally deep pockets, can lay claim to gaining ground. They did not buy 20th Century FOX just for kicks, they needed that company’s library, production capabilities, and brand to expand Disney+’s offerings to truly cater to everyone.

Where does animation fit into all this? Animation tends to appeal to a wide variety of audiences and tends to remain perennially popular. That makes animation good for a service’s library. Old shows can sit there, waiting to be discovered (or rediscovred). I cannot fathom that the marginal cost of storing and streaming content (compared to producing it) is enough to justify removing it altogether. How easy could it have been for WBD to simply stop producing new shows instead of obliterating them like they did?

The other aspect is that kids like animation. They like it a lot. Kids don’t have control over which streaming services they use, but their parents do. It’s not as emphasised now as much as it used to be, but a key focus of Netlfix’s marketing approach is families and Disney have followed suit. How many parents are re-evaluating their subscription to TWD’s services now? Throw in a cost of living crisis and it’s not hard to see where the trimmings might come from. Fast forward 5-10 years and you have a company that’s broken just about all of the Twenty Two Immutable Laws of Marketing.

So is animation a root cause or merely collatoral damage? I’d say it’s a mixture of both seeing as animation is expensive to produce but also tends to deliver greater long-term value; emphasis on the tends to. One could argue that both Warner Bros. and Discovery have failed to devote enough time, energy, and resources to their animated offerings, saw the writing on the wall, and simply decided to give up.

 

Warner Bros. Discovery Shoot Themselves in the Foot and Act Like Everything’s Fine Read More »

Fortune Favors Lady Nikuko Review

Animation, Review /

Based on the novel of the same name, Fortune Favors Lady Nikuko is another indie feather in the cap of GKIDS and Shout! Factory.

“Brash single mother Nikuko is well-known for her bold spirit, much to the embarrassment of Kikuko, her pensive yet imaginative daughter. In contrast to her mother, Kikuko wants nothing more than to fit in as she navigates the everyday social dramas of middle school. Life in the harbor is peaceful until a shocking revelation from the past threatens to uproot the pair’s tender relationship.”

Yet again, eastern creators show up just how stale and predictable American filmmaking has become and while Disney’s latest critical success is trumpeted from the rooftops, fantastic films like this continue to find favor with critics and viewers alike. Fortune Favors Lady Nikuko is a quirky film that tells a story and is a refreshing change from films that merely document a quest. Centre stage is of course, Nikuko herself. A somewhat tragic, yet irrepressible character; her boundless optimism in the face of adversity contrasts starkly with her daughter Kikuko who is neither as jovial, or as optimistic, yet is perhaps the real adult in the relationship. Their bifurcated relationship is nonetheless strong made with a unique mother-daughter bond.

The story meanders and at one point I was left wondering where things were going but by the end I realised that it’s less about where things are going and more about where they’ve been.

The animation is lively, and watching this film on a full stomach is required lest the stunning depictions of food overwhelm your experience. Pixar spent however many millions in an attempt to create appealing CGI food in Ratatouille and a traditionally animated film like this comes along and proves it was all in vain.

The only shortcoming is to be found in the writing; it’s serviceable but doesn’t do the story or the characters the justice they deserve.

Fortune Favors Lady Nikuko is primarily a retrospective film and how the various episodes and choices in life invariably lead us to places we never anticipated. One wishes that more western animated films could be as bold.

Fortune Favors Lady Nikuko is available on Blu-Ray DVD combo from Shout! Factory now.

Fortune Favors Lady Nikuko Review Read More »

The Golden Age of Animated Cinema is Over

2 Comments / Opinion /

Eighty-something years is a pretty good run though, right?

All good things come to an end and animation at the cinema is no different. Cinemas are struggling and (at least in the US) audiences have been declining for a long time even as studios tout rising box office revenues to deflect attention from that. The COVID-19 pandemic merely bought forward the inevitable switch to streaming by a good five or so years; hastening the end of the every-man multiplex.

Which means the golden age of animation at the cinema appears to be over. The slow return of films (and audiences) to cinemas coupled with numerous studios’ decision to release films directly to streaming suggests that the cinema as a regularly occurring experience is finished.

…the larger discussion revolves around whether studios like Pixar can afford to create, and maintain the infrastructure to deliver, films costing hundreds of millions…

Lightyear is a symptom of this trend. Middling reviews aside, the film leans hard on Pixar’s brand without success. The studio’s other recent films have gone straight to Disney+; leading to staffers moaning on Twitter that the films are devalued as a result.

It’s a bit more complicated than that though. Films costs have to be recouped and the box office was the first route to doing so until now. Netflix demonstrated that film costs could be decoupled from outright performance and instead folded into overall subscriber revenues; you spend the money you have and not the money you’ll hope you have in an effort to maintain and grow income in the future.

Mainstream culture has changed and the concept of a monoculture where we all consume the same media is gone. We don’t all watch the same films (if we can even watch them all) let alone go to the same location to watch them. Complaining about films being denied their moment to shine at a movie house is anachronistic thinking. Parroting their performance when they succeed there is devoid of meaning. Saturday Night Live gets a lot of attention from media that intones a wildly influential show but the numbers watching, and the numbers of real people talking, tell a very different story. It doesn’t matter if SNL is actually funny; if everyone is busy watching something else to care, it can’t be a paragon of culture.

If anything, going straight to streaming is a sign of confidence in quality. Lightyear going to the box office is a sign that Disney figured they had to hedge their bets by recouping at least some of the film’s massive $200 million cost at the box office because their data most assuredly told them such a turkey wasn’t going to deliver any subscriber growth to Disney+.

I don’t agree with /Film’s take on Pixar’s future, especially since it focuses on the box office, and argues that Disney shouldn’t shy away from a studio who’s delivered hits in the past. I think the larger discussion revolves around whether studios like Pixar can afford to create, and maintain the infrastructure to deliver, films costing hundreds of millions if the return on investment isn’t as clear cut or as swift as the weekend box office.

Low Budget =/= Low Quality;

This is what Netflix has wrought: animated films that are decent quality yet low cost and delivered frequently. Large budget films exist because they had economics which supported them. What happens when those economics are no longer there or are unfavourable? Technology has also advanced to the point where technological prowess is kind of irrelevant. Will a $300 million film look better than a $75 million one? Probably. Will the audience notice enough to care…? Illumination’s success provides a definitive answer.

The Future?

What does the future hold? Like Spielberg, I agree (and have agreed since he made the remarks in 2013) that the cinema experience isn’t dead, but it will evolve into something that is consumed rarely; perhaps once or twice a year and with an increased focus on older films people want to see on a big screen with others. This will continue for a few decades until cinema itself becomes an anachronism like vaudeville, jukeboxes, and the cassette tape.

With the cinema in decline, what will animated films evolve into from here.

The Golden Age of Animated Cinema is Over Read More »

RIP Velma Dinkley 1969-2022

Opinion /

You can mourn the death of a fictional character but can you mourn the ‘death’ of a fictional character? Mindy Kaling’s ‘reimagining’ of Scooby Doo’s Velma sure seems like the death of the character we all know and love.

Why? I mean, Kaling is not short on talent but she couldn’t have created something original instead? She’s already remaking the character, how much additional effort would be needed to make one truly her own? Not much! one wonders whether Kaling pitched an original show that got shot down for [insert your own reasons here] but got a reprieve when some executive realised they could leverage existing IP by making it about Velma.

And why does it have to be for adults? We’ve seen time and again that ‘adult’ shows are a niche product while shows with broader appeal can be just as ‘adult’ without toeing the line between PG and Rule 34.

The Simpsons is a prime example. You don’t get much more ‘adult’ than showcasing the effects of divorce on the kids, or even better, political campaigns. I suppose that’s all a bit too boring these days though.

The risk of officially-santioned Rule 34 material is also very real. Ren & Stimpy in its original series was a Nicktoon and while it was infamous for getting crap past the radar, when John K. was given free reign to indulge himself, the results are deeply buried for very good reasons; sullying the reputation of the original (amongst other reasons). The ‘nudge nudge, wink wink’ tone of a series mkaes for a good in-joke but once the secret was out, well, where’s the fun in that?

Will the same happen to Velma and Scooby Doo? What happens when Velma is taken beyond her natural environment of a kids show and relocated to a trope-laden college setting? Will the series be a critical take on female characters like Velma or is it destined to be a run-of-the-mill adult show with no real substance of any kind? Given the raft of such shows lately, my guess is a firm yes.

I like Velma, but can I like Kaling’s version of Velma? It’s too early to tell but I’m not optimistic.

What are you thoughts?

RIP Velma Dinkley 1969-2022 Read More »

The Netflix Cuts and the Disposability of Contemporary Animation

1 Comment / Analysis /

The axe swung hard at Netflix’s animation department this week. Management were forced out and shows either cancelled or cut entirely. Such actions are hardly a surprise given that Netflix subscriber numbers fell over the past quarter, but more intriguing is the news of Netflix’s extensive use of data to create and produce shows. It all adds up to a new era of disposable animation.

Netflix

Animators are a proud bunch and rightly so. Animation is not an easy artform to learn, let alone master. Animators draw upon a legacy that stretches back a hundred years whose earliest works continue to educate and inspire. Live-action can’t quite say the same; nobody makes silent films anymore but while rubber hose animation is antiquated, it never became obsolete either. Such longevity may be coming to an end and while the cause is not a single one, one company looms large: Netflix

Alternatively the hero or villain of the entertainment business, Netflix nonetheless pushed the industry into the modern era by catching it off-guard with streaming. Everyone struggled to catch up, while Netflix attempted to cement its moat with original content in every shape and form. Animation forms a key part of that moat; all the better to keep Disney at bay by acquiring younger viewers before they know who Disney even is. Netflix never set out to replace your favourite cable channel, it set out to replace your entire cable service. Ergo the often contradictory personality of the company’s offerings. High culture critical darlings on the one hand, and bargain basement, lowest common denominator trash TV on the other.

Animation was not going to escape the same fate and for every Midnight Gospel, there were a half dozen DreamWorks spinoffs. Yet the allure of a creative space with minimal executive interference was potent. Numerous high profile creators joined and excelled at Netflix and much like Nickelodeon thirty years prior, the results showed.

A Ruse

Yet, one wonders if their endeavours were actually part of a ruse. Not in the sense that Netflix would cast them off once the audience was acquired (which may or may not be or become true), but rather that Netflix, in its mad dash to build a library of content and reliance on data to get it there, was willing and able to actively devalue their contributions by drastically increasing the rate of production. There was a time when Disney would put out an animated film only once every three years. Then it became one every year, then it became one a quarter. Now Netflix is releasing one practically every week.

The company uses data extensively and in a capacity far beyond what Nielson ratings can ever hope to provide:

To put it simply, if you’re watching any TV show or movie on Netflix, it knows the date, location, and device being used to watch, as well as the time of your watching. On top of that, Netflix also knows about how and when you pause and resume your shows and movies. They also take into consideration if you are completing the show or not, how many hours, days, or weeks to complete the episode or a season or a movie.

Ultimately, it tracks every action taken by the user on Netflix and considers it as a data point. How many metrics will be there in total which Netflix might be using for data collection?

People and the data they produce changes over time though. What you liked as a kid is not what you may like today or what you may like in ten year’s time. Netflix does not care about the past or future though. They only care about the now, or rather, the future as far as it takes to produce and release a film or show. They produce things to appeal to viewers now. To grab their attention now. To keep watching Netflix now.

Netflix’s credo: Why rewatch an old favourite when a sparkly potential new favourite awaits to be discovered?

Caring (or Lack Thereof)

Truthfully, do audiences really even care? Netflix zeroed in on a formula that’s worked and will continue to refine it as the data suggests they should. Audiences demand entertainment; artists are among the few looking for fulfillment and a call to a greater cause. The former are concerned with their immediate gratification, not with the effort it took to gratify them or what happens to those involved thereafter. American football satiates an immediate need for pleasure; the lasting physical and psychological damage done to the players is the last thing on viewer’s minds.

Creators pour their heart and soul into passion projects hoping they will provide a lifetime of enjoyment but the reality is a flash in the pan. Culture moves so fast and things have to hit instantly and powerfully to even create awareness let alone viewership. Hence Netflix’s policy of only starting any marketing efforts a month in advance of release; any sooner and audiences will consider it old news by the time they can watch, if they even want to. Like I wrote in my recent Oscars post: stuff released in 2021 may as well have been released in 2001; that’s how old they appear now. Animation is not safer on other platforms either; all of which have the same library problem Netflix did but additionally face breakneck production schedules to catch up and keep pace with the industry leader.

Consume and Throw Away

What this adds up to is a new disposablness of animation. Artistic endeavours designed to be popular now and not the future, to be binged instantly before spending an eternity in a library; only ever a click away but obscured by a thicket of new content. The latest news out of Netflix reinforces this fear. A fear that even the greatest is simply no better than the average and no less fitting of a similar fate.

A final word of warning: animation is not a genre but may as well be as far as audiences are concerned. Westerns are a genre, and as they increased in popularity they too became formuaic and disposable and have deservedly languished in limbo for the past half a century.

The Netflix Cuts and the Disposability of Contemporary Animation Read More »

The Animation Oscars are So Utterly Not Relevant and We Should Stop Pretending They Are

Opinion /

The Oscars in general are struggling with relevance in an age of streaming and a population that has better things to do yet the animation community, year after year, finds plenty to alternately celebrate and complain about the animated awards. Why even bother getting worked up over something that is no longer relevant?

There was a time when the animated Oscars could be considered relevant but those days are over. In case you missed it, this year’s ceremony dispensed with the Best Animated Short category from the live broadcast (relegating it to a prerecorded segment), and the Best Animated Feature went to Disney’s Encanto; the studio’s ninth win in ten years, and 13th win in 15 years (including Pixar films).

Which, if you’re the director of a Disney animated film, almost has to feel like a participation trophy, right? You received it because of what you did not how well you did it. The award may be worth something personally, but to everyone else, it’s like the New England Patriots winning another Superbowl; exciting for them, boring (and skippable) for the rest of us, and a concern for the NFL that needs high viewership. Disney is going to release a film every year, so what’s the point? That’s strike one.

It’s not a perfect system, but at least the Annie’s acknowledge that award ceremonies are capable of becoming dominated by the films intertwined with the voting membership. Hence their ‘Best Indie Feature’ category. The Oscars skates long and hard on its reputation as the pinnacle award in movie-making yet repeatedly baulks at recognising the downright refusal of its membership to consider animation as an equal to live-action. Why even bother participating in something that shows no sign of treating you any better? That’s strike two.

Do you know anyone who watches an animated film because it won an Oscar? Of course not, everyone watches them when they are released and instantly move on to the next new film. Let’s be honest here, the Oscars are as much a promotional/marketing machine as they are a recognition of the best. There is, however, no longer an ‘Oscar bump’ to boost winning films and in any case, films on streaming networks don’t obtain the same financial benefit. Recognising the best film from the previous year is also a laughable exercise in 2022. We’ve moved on to this year’s films which are so often in practice, simply better. Everything from 2021 is so far in the rearview mirror, we can’t even see it. So you watch a film and nine months later it wins an award? Do you care? Do you feel validated that you spent the time wisely? I wouldn’t and I suspect I’m not alone in that regard. That’s strike three.

Studios may continue to see value in gunning for an Academy Award but perhaps its time the industry as a whole just moves on. Consumers certainly have.

The Animation Oscars are So Utterly Not Relevant and We Should Stop Pretending They Are Read More »

Scrat? SQRAT? Clearing up Some Confusion Surrounding the Lawsuits over the Ice Age Character

9 Comments / Analysis /

This week, ‘SQRAT’ creator Ivy ‘Supersonic’ Silberstein celebrated the postscript of over a decade of litigation against Blue Sky Studios/FOX (subsequently Disney). A lot of articles (and there are quite a few) comment that Disney can no longer use the character ‘Scrat’ or create any more films featuring him. Such an assertion isn’t entirely correct and once again highlights the muddy waters that lie between copyright and trademarks. Read on to find out why. …

Scrat? SQRAT? Clearing up Some Confusion Surrounding the Lawsuits over the Ice Age CharacterRead More »

Scrat? SQRAT? Clearing up Some Confusion Surrounding the Lawsuits over the Ice Age Character Read More »

Animation Fans Beware: NFT Scams are Coming Your Way

Analysis /

Non-Fungible Tokens (NFTs) are the buzzword/fad/hot thing of the moment. FOX’s recent announcement that they were working on a show using the technology proved an inspiration to others but can the technology and the hype surrounding it be used to scam fans? It’s easier than you may think.

What is an NFT?

The gist is that since computers can create infinite perfect copies, art loses its inherent rarity factor. Enter the blockchain, essentially a glorified ledger that contains entries for each piece of art with a corresponding entry for the name of the ‘owner’. The ledger is structured such that everyone can see the entries and can therefore agree on the validity of the entries. It’s like a copy of the Mona Lisa; everyone knows the original is owned by the Louvre. An NFT takes that principle and applies it to any piece of artwork (or other ‘asset’); anyone can possess a copy, but only the buyer is listed as the agreed-upon owner.

How is This Related to Animation?

Selling the assets of shows and films always seemed like a sort of afterthought for studios. Indeed, many times they were considered waste to be disposed of. (For the life of me, I cannot now locate a link to the story of the entire, yes the entire, set of thousands of production cels from the Back to the Future TV show being put up for auction).

Enter Non-Fungible Tokens and their promise to allow creators to once-again exploit the rarity factor of their art without having to risk the exposure of having their art out there in limitless quantities.

Blockchain Buddies

Although FOX announced an NFT-based show a while back, Blockchain Buddies seems to be the first actual animated show to get out there with the technology. Per AWN:

The project will be a first of its kind interactive animated project, with NFT holding community members empowered to shape the future of the creative universe.

In other words, the show creates NFT assets that are purchased by fans. Those fans are then given some sort of say in how the show progresses. This is very similar to the approach that FOX announced with their project and a good indicator of the direction creator see NFT projects developing.

NFT Positives

There’s a few positive aspects that I see to all this. The first is that it strengthens the bond between creators and fans. The latter gain a vested interest in the show, and creators can rely on their fans to guide the show in ways that keep them engaged and therefore maintain viability.

The second is that it shifts animated shows (and films, etc.) away from the consumerist approach to merchandise. Instead of cranking out mass-produced physical items, support is reduced down to a small number of relatively high-cost NFT assets. Fans thus gain more unique things to treasure.

NFT Negatives

If there are upsides, there has to be downsides and they illustrate how NFTs can be a double-edged sword. Bringing fans closer to the creators will make conflicts both more inevitable, and disruptive. If creators want to go one direction and fans want to go in another, who has the final say? Do creators need a ‘Code of Conduct’ for fans?

In tying the value of a show to quote/unqoute ‘assets’ there is a possibility that the life-span and indeed the shelf-life of shows becomes smaller. As new shows arrive using similar NFT value propositions, older shows are likely to lose value and ultimately become worthless. What happens than? When a show relies on a market as an intrinsic indicator of its value, what happens if the bottom falls out of the market for a particular show? What if fans rebel en masse and collapse the market for a show?

In business, companies must follow certain rules and regulations pertaining to the relationship between the ownership of the business, and the management who run it. NFTs are unbridled by such worries; people who buy an NFT are not considered an owner in the corporate entity that actually owns the show. (Such is my hunch.)

The Scam

NFTs are new, but scams and frauds are not. How this affects animation and animation fans is through a microcap fraud. From the US government:

Fraudsters often use emerging technologies or industries – including Initial Coin Offerings (ICOs) and digital assets – to entice investors as part of a fraudulent or manipulative scheme. For example, they may publicly announce a development that is intended to affect a company’s stock price. Or they may promote a company that claims to be developing products or services relating to the latest news events or trends.

Here’s an example:

Via: @rasp@raru.re

The image above is typical of the scam. It promotes all the benefits of buying in; even providing links that from first glance provide credibility. Clicking on the YouTube links brings you to something very different however. Animation-based NFTs frauds emphasise a community-based, common-interest, vested-ownership in a TV show or film. Yet placing them under a harshly critical light exposes the fraud. They are not simple sales agreements (exchanging money for goods or services), they are investment vehicles that require the exchange of money for an economic asset (the NFT).

Investing vs. NFTs

Disclaimer that the below is not intended to be, or should be interpreted as, financial advice. Always consult a registered financial advisor prior to making any investments

Investing is not for the faint-hearted and serious investors will always undertake their due-diligence before committing to an investment. That due-diligence is a thorough and intensely critical look at the investment being offered, but also its potential relative to other investments. For example, if you’re thinking of buying stock in The Walt Disney Company, you want to be really sure that the value of the stock is going to go up, but you also want to be really really sure that stock in Netflix isn’t going to go up by even more. Smart investors hedge their bets and buy stock in both companies.

NFTs on the other hand…

They’re more like investing in magic beans. Could they sprout a giant beanstalk? It’s possible. Can you sell or trade them to someone else? Sure. What happens if you buy the beans and nothing happens AND you can’t sell them? ¯\\_ (?)_/¯

Trust, or The Lack Thereof

Buying into an NFT-based show is akin to a rigged hoop-toss game at a carnival. The prize is right in front of you but only the game operator knows whether you can actually win or not.

The landscape is littered with failed Kickstarter projects as it is. Even major networks cast ideas and pilots aside all the time. Buying into an NFT animated TV show or film comes with ZERO guarantees that you will actually receive what is promised. Trust is wholly on the side of the fan which is why the traditional models of studio/broadcaster financing that’s firewalled from consumers is necessary. NFT-based funding runs roughshod over this; regardless if it’s a legitimate corporation like FOX, or a conman on the internet like in the images above.

Conclusion

I dislike the idea of NFTs although the original idea for community-verified ownership remains interesting. I also fail to see enough upsides to exploiting NFTs to create a show. People have found an interesting way of financing their shows and run their cons that skips around necessary laws and regulations. There are similar benefits and pitfalls to simply creating a company that owns a show and inviting fans to by shares. Of course that requires red tape with stiff penalties for fraud. NFTs are, for the moment, free of such government oversight and will wreck havoc until brought under regulation. In the meantime, caveat emptor.

Animation Fans Beware: NFT Scams are Coming Your Way Read More »