January 2013

The Most Underrated Man in Hollywood

Analysis /

Let’s not spoil the surprise just yet, but see if you can guess who the most underrated man in Hollywood is before the reveal.

His Achievements

This person’s list of achievements is long over the course of his career. He has received numerous Academy Awards and has risen to a prominent place within a large animation studio.

He has been instrumental in the development of technology that has played such a significant role in the history of animation that without it, things would be quite, nay, substantially different than what we know it as today.

In addition to these achievements, he is also known as a man with a clear vision of the future. He was quite literally decades ahead of his time and his vision for animated entertainment was proven exactly as he envisioned. Naturally, he was astute enough to place himself in roles that would serve this purpose and his arrival at certain companies at particular times was quite fortuitous for both parties.

Today, his technological achievements continue to find widespread use throughout the world, and the films that he helped create rank among the highest grossing animated films of all time.

Although well known within the animation community and afforded some recognition outside of it, this relatively quiet intellectual does not enjoy the same celebrity status that some of his contemporaries do. As such, while his achievements, creations and the films that they have enabled have become synonymous among the public with quality entertainment, this man remains somewhat of a mystery to many of ordinary folks who enjoy his films.

Can you guess who it is?

Yes, it is of course, Ed Catmull.

Via: Ieee.org
Via: Ieee.org

You probably know who he is, and you definitely know the studio he helped found (Pixar), but his 34 credits on IMDB enormously belie his contributions to contemporary animated films and even to the wider movie industry itself.

Why He Deserves the Title

His Influence is Felt Everywhere

As one of many people behind Pixar, Catmull could be construed as being one of the backroom boys, but this is far from the case. While John Lasseter and others were forging ahead on the creative side, Catmull was heading up the technical side that was making the films possible.

That alone would make him noteworthy if it were not for the fact that he was instrumental in seeing how the technology he was developing could be applied to entertainment. That action puts him right up alongside Walt Disney in his forward thinking. Heck, he was mulling CG animated films in the 1970s, but had to wait until technology advanced enough to make it economical and until he found someone willing to give him the resources necessary to experiment. That person was George Lucas, who was apparently (thankfully) blind to the fact that a rogue computer animator was running around at Industrial Light and Magic.

Although initially Catmull’s software was only suitable for purely animated films, it has since found its way into special FX and today, CG FX often form so much of a film’s on-screen visuals, that they are considered fully animated.

Today, CGI animated films are prevalent. They dominate the American box office and have proliferated into TV shows too. At one point, they were considered to be the sole future for animation with result being that Disney shut down the traditional animation department that made them famous.

His Foresight Rivals His Patience

Although Catmull knew where CG technology would eventually go and what it could potentially achieve, he showed enormous patience as he wound his way through various universities and ILM before Pixar was spun off in 1985. Even then, his goals were not within arms reach. It took a few more years before Tin Toy debuted and showed that computers could make high quality animation.

Catmull’s goal ramained a few years away though. Finally, Toy Story was put into production and became the world’s first entirely CGI-animated film. This was Catmull’s ultimate goal and he only had to wait, what, nearly 20 years for it to reach fruition? That’s a heck of a lot of patience that most people in entertainment could stand to learn from.

His Passion For The Animated Technique, Not Just the Technology

It may be surprising to learn that Ed Catmull has a passion for all animation, not just the CGI stuff he helped develop, but also the traditional stuff too. In fact, when installed as the president of Walt Disney Feature Animation, in conjunction with John Lasseter, he was instrumental in getting traditional features going again at a time when many thought the technique was a dead as silent films.

Why He’s Underrated

As mentioned way up at the top, Catmull resides much more out of the limelight compared to his more publicity-friendly compadres like John Lasseter, Pete Doctor, Andrew Stanton, etc. Many people acknowledge his contribution to what Pixar became, but few seem to acknowledge the wider contributions to animated films and animation in general. Yes, he was not alone in this work, but he is the single link between otherwise disparate people and studios.

Ed Catmull’s grand contribution to modern film should not be overlooked, and that’s why he’s the most underrated man in Hollywood.

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Are You Thinking Globally?

Questions /
Totally Spies
Totally Spies
Via: Fanpop
An example of the opposite of today’s post: a foreign cartoon created with American culture in mind.

A silly question perhaps, but a serious one. If you’re reading this in the United States, then congratulations! You’ve already achieved something that a lot of people in other countries would give their right arm for. Another question: how often do you think about those countries outside American borders? In other words: are you thinking globally?

Why Does This Even Matter?

The reason I pose this question is that animation, as an industry is global. Unlike, say, teaching Polish, there is an animation presence in almost every country. It may be very large or it may be very small, but I guarantee you that someone somewhere in every country, they are practicing animation in some form.

Why should you, as someone in the US care about this? Well, we’re just about at the stage where US films and TV shows are taking in a significant proportion (more than half in some cases) of their revenue from outside the country. That in itself is an important fact. (Ever wonder why a show like Heroes went on as long as it did? It was partly because its popularity abroad was bringing in profits for NBC.)

What Does It Have To Do With Animation

Large-scale animation (read: Disney, DreamWorks, etc.) have to make their content suitable for foreign audiences. They have no choice in the matter any more. American audiences have shrunk to the point where they cannot sustain most blockbuster-sized films on their own. So, naturally, studios look abroad for the necessary box office and home media monies to make up the rest of the profits.

The same goes for TV shows, although with smaller budgets, selling them abroad simply increases revenues for the studio. The difference also plays through in that there is also a significant amount of animated TV shows that are imported into the US. The one shown at top is a prime example.

So Why Should I Start Thinking Globally?

Ah, a good question indeed. Just why should you think and know about all this? Well, it’s because whether or not you are involved in the creation or selling of animated products, the fact of the matter is that the internet makes international barriers non-existent.

How many hurdles do you think you’d have to go through using the traditional channels to get your content shown in another country? Besides finding a distributor, negotiating with them and then finding someone to broadcast it, that takes a heck of a lot of time and money.

With the internet, you can throw the content up yourself and immediately have an audience from around the world. It would be like me trying to get a newsletter published in multiple countries around the world for my readers. It simply isn’t feasible, but, with a blog (and the internet), I can do it for next to nothing and have a platform that encourages interactivity.

The Other REALLY Important Thing

Yes, there is one other thing: the content itself. America is really a very insulated country in the cultural sense. Yes, it is great at exporting it’s culture abroad, but when it comes to letting others in, it’s,well, a bit selfish. That’s hardly a conscious act though; the country is huge, and there are a lot of people here.

The problem is that what may work well content-wise in America may not work so well abroad. Think of The Office, the classic BBC comedy that had (absolutely had) to be remade for US audiences despite sharing a common language. Why? Well when shown to network executives, they thought it was a real documentary, not a spoof.

Pixar is acutely aware of some of these cultural issues and they make a point of ensuring that text within a film (newspapers, etc.) are shown in the local language rather than English.

Why should this concern you? Again it comes back to the internet. Could you grow a substantial audience abroad if you only create something with American audiences in mind?

It’s not likely at this early stage in the game, but expect it to become just as much of an issue for new media creators as traditional ones. At a time when YouTube series’ budgets are hitting hundreds of thousands, earning that revenue back is going to be rough going if you depend on audiences in only one country.

Do you pay attention to foreign content? Do you create with foreign audiences in mind? Let us know in the comments!

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Female Demographics Neglected By Animation

5 Comments / Analysis /
Daria Morgendorfer
This character should be a hint.

When we think of animation, or indeed any form of entertainment, there is a propensity to think of it only in terms of how it already exists. What I mean is that animation, for a staggeringly long time, was considered as belonging in the kids’ realm (I’m afraid I can’t source the famous “we’re the babysitter” quote that I thought was attributed to Wollie Reitherman.) and it’s only very recently that we’ve started to see it slowly away from that perception. What I’m curious about though, is are there female demographics neglected by animation at the moment, and if so, why?

Who IS Covered

First though, it’s important to look at who is currently covered:

  • Boys aged 0-12
  • Girls aged 0-12
  • Boys aged 16-29

Now before you get out the pitchforks, bear in mind that I’m talking specifically about animation that is aimed at a particular demo. Yes, The Simpsons can be, and is enjoyed by everyone; the same goes for Pixar films, but if you were to collar someone from the responsible marketing department and ask them nicely (or maybe rough them up) they will tell you that either animation is marketed with one demographic in mind.

Which demographic that is will depend heavily not only on who is expected to watch the show, but also who is expected to support it. Examples are pre-school and pre-teen shows. Neither has an audience with any meaningful disposable income but both possess parents who do!

So even though the pre-school show will appeal to kids, you find that it is specifically tailored to what parents desire in their kid’s entertainment. In the case of pre-school that is partly the reason why almost all of them contain a heavy emphasis on education over pure entertainment.

Moving up the age scale, kids aged 6-12 do get more of an emphasis on entertainment because their ability to sell their parents on supporting merchandise is much stronger and by the time they make it to the top, they are practically mini consumers; a.k.a. tweens.

Boys and young males aged 16 and above are adequately catered for through the likes of [adult swim], anime (if they are so inclined) and whatever other kinds of animated entertainment they can dig up for themselves.

Who is NOT Covered

Where things tend to fall apart is once the teenage years kick in. Based on what is currently out there, there is a glut for both genders around the 13-15 mark. That’s pretty natural though as kids get caught between a rock and a hard place in regards to content; too old for the younger stuff, too young for the older stuff. I don’t foresee this gap being narrowed substantially any time soon.

What is noticeable though is that while boys have options once they hit their mid-late teens, girls do not. In other words, boys are brought back into the animation fold through the likes of [adult swim] and anime (plenty of guns, violence and giant robots), girls don’t have anything (or very little) comparable to that at all.

Seriously. Close your eyes and think of a current, animated TV program (or animated film) that’s aimed specifically at mid-late teenage girls or those in their early 20s. I can easily name a dozen live-action shows but nothing animated even comes close to mind.

Again, this is not to say that girls in that age range can’t enjoy animated programming or films; a heck of a lot of them do, but a glance around the TV schedules and cinema listings reveals a glaring gap in animated programming tailored to them.

Oh, and as for Brave, well again, you’ll have to corner our marketing friend, but I would be greatly shocked if that was being tailored for anyone over the age of 13.

So could it be that girls are ‘dropping out’ of the animation scene in their teenage years because there is nothing to pick them up at the other side of the lull around 13-15? The signs currently point to yes, and there are many, many reasons behind it.

Standard arguments that get trotted out for this kind of thing is that there is no market for it, that girls genuinely have no interest in animated programming once they near adulthood and (most egregiously) that they simply enjoy the same content as guys. All are false. Audiences can only watch what they are given, so saying they don’t want to watch something that doesn’t exist is a load of hogwash.

What About Daria?

Ah yes, what about Daria. The MTV animated show could be said to aim precisely at the very audiences discussed in this post. It had a female lead(s) and tended to adhere to the social and moral quandaries that many teenagers face. The show also achieved all this while bridging the gender divide and appealing to all teenagers.

However, the show has long since departed from the airwaves and nary a replacement has been seen since. As of 2013, it regretfully resides in the nostalgia zone, where only those who originally watched it will seek it out in any meaningful numbers.

What Can Be Done

It’s a topic that’s been covered here on the blog before, but the bottom line is that there simply is not enough animated content being made for girls at all ages, prepubescent or otherwise. Even the comics industry has seen an increase in this kind of content with plenty of female comic artists and writers getting works out that is more likely to appeal to that kind of audience.

Animation retains a kind of stigma when it comes to this, and my guess is that no-one of the powers that be are willing to make the right move to get the shows that are needed, made and broadcast.

The simple answer is to make the content and make it well.

 

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A Venn Diagram of Animated Films

7 Comments / Analysis /

AA_Venn Diagram of Animated Films

Click to mammothly enlarge.

This Venn diagram of animated films represents three groups connected with an animated film (animators, fans and studio executives) and which film identifies with them in the most accurate way.

Do you agree or disagree with any of them? Leave a comment with your choices!

PS. Please feel free to share this around 🙂

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Week Links 01-13

Week Links /

In other words, articles and posts that I read this week and so should you.

Disney Freaks Out Over Patents That May Mean It Can’t Keep 3Ding Old Movies

In a shocking turn of events, the sale of the remnants of Digital Domain mean that the licensing agreements that Disney had on the patents used to 3D-ify old movies may no longer apply. Fears that the studio may have to stop the practise were quickly proven as the court sides with the patent holders.

Should movies with smoking be rated R?

Erin McNeill discusses the presence of the habit on-screen with animated films coming in for some criticism.

Studio Ghibli Zippo Lighters

Via: Japan Zippo Station
Via: Japan Zippo Station

While we’re on the subject of smoking, how about a Zippo lighter featuring a character from your favourite Studio Ghibli film? I somehow can’t see Disney releasing similar merchandise here in the States.

The Ladies of Comicazi

Four ladies blogging about pop culture = the latest addition to my newsreader.

Google Translate: English to Ned Flanders

Via: The Laughing Squid
Via: The Laughing Squid

Via the Laughing Squid, it’s not real, but I sure wish it was.

A few tweets

[blackbirdpie url=”http://twitter.com/potatofarmgirl/status/286582779133689856″]

[blackbirdpie url=”http://twitter.com/MediaReDEF/status/286769926889422848″]

[blackbirdpie url=”http://twitter.com/amid/status/287678256017186816″]

And Finally…

A cute cadet doodle by Nichole ter Horst!

Via: P.S. (Nic ter Horst's blog)
Via: P.S. (Nic ter Horst’s blog)

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Does Cartoon Network Disrespect Its Old Shows?

16 Comments / Questions /
Via: randyadr on deviantArt/a>
Via: randyadr on deviantArt

See update below!

Cartoon Network really is the odd man out of the three US kids channels. Originally a division of Turner Broadcasting, it now operates as an arm of the vast Time Warner empire. However, despite this trait shared with Nickelodeon and Disney, Cartoon Network has shown an almost remarkable attitude to the content it has created over the years.

How The Original Series’ Popularity Fares Today

To start off right at the beginning, how are the very first batch of original cartoons treated today? Well, they’re still relatively popular among fans. Plenty of GIFs and screenshots can be found on social sites like Tumblr. Dexter’s Laboratory seems to be the current favourite, but Powerpuff Girls and Johnny Bravo can be found too.

How Newer Series’ Fare Today

After the original group of shows, a second wave of Cartoon Network originals hit the airwaves in and around 2001 and continuing thereafter. These shows varied as to their length; some lasting only two years but others, such as The Grim Adventures of Billy and Mandy made it all the way to 5 or more. This wave of shows brings us to around 2009-2010, at which point he current crop of shows took over and continue to this day.

These shows hold less nostalgia than those from the 90s, but they remain embedded in the consciousness of older fans.

How Cartoon Network Disrespects Both Types of Show

The signs have never been good for an animated show on Cartoon Network having much of a life off the small screen, or even after their original run has ended. Such a state of affairs has only very recently begun to change, which we’ll discuss further down.

Reruns (or rather lack of)

I never had the Cartoon Network until I came to the States, and it very quickly became apparent to me that current series are broadcast ad nauseum. Yup, when a series is “in production”, episodes will be broadcast non-stop with new ones appearing as necessary. I can safely say that I watched many episodes of Foster’s Home for Imaginary Friends multiple times.

That said, once a show has ended, it all but disappears from the schedule. Ostensibly this is to make way for the new show that replaces it, but in reality, it only serves to accelerate a show’s move into the history books.

Once a show is old enough, it is likely to get shifted onto Boomerang, but the lag between vanishing on one network and appearing on another can be years. By which stage the original audience has all but evaporated.

Merchandise

This one was apparent even to me, as I tried in vain to find some nice Foster’s merchandise. At best, all I could find were some figurines and a [very] expensive ‘cel’ of the characters. Could I find a t-shirt? Nope. Could I find a poster? Nope. I was grateful there were even wallpapers I could download for my desktop. Believe me when I say that Foster’s was not alone in that regard. All the shows suffered the same glut of merchandise.

The sole exceptions have been the Powerpuff Girls, which rode the fad all the way until it was too late for the feature film to succeed, and Ben 10, which through some magical twist of fate, has had a first rate merchandise channel since day one. Other shows in the CN library have been mostly forgotten or regrettably left to the likes of Hot Topic to satisfy fan’s desires.

Home Media

Of the three areas that are under discussion in this post, the home media efforts of the Cartoon Network are the most appalling. Let me ask you some questions:

  • Can you buy Season 2 of Johnny Bravo on DVD?
  • How about a blu ray of Megas XLR?
  • Can you legally download any season of Camp Lazlo besides the first one?

If you answered yes to any other those questions, you’re either a liar or you’ve mistaken your sources as being legitimate.

Yes, Cartoon Network is in the undeniably unenviable position of having a pretty shite record when it comes to its home media releases. That’s not to say they doesn’t release anything, they do. However, while the initial effort (read: season one) is decent, things quickly come unhinged (for reasons unknown) and subsequent seasons fail to appear.

It’s really quite sad that I can choose almost any of Cartoon Network’s shows and say that season one is available but nothing else is. In the case of a show like Ed, Edd and Eddy, it might be permissible since that show ran for six seasons over 10 years, and that’s a huge cost hurdle right there. But in the case of say, Chowder, which ran for 49 episodes over three seasons, it’s kinda unforgivable that all the fans have are a two DVDs with 5 episodes each.) It’s why I gave up buying Cartoon Network DVDs for the most part, my collections would never, ever be complete.

The one and only consolation throughout all of this was the mammoth boxset that the Powerpuff Girls were afforded on that show’s 10 year anniversary in 2008. It’s a fine set, but did nothing for the fans out there who had already purchased the initial boxset releases that were never completed.

To add further insult to injury, nothing from the libarary of shows is available on the likes of Netflix or Amazon Prime; a situation that Nickelodeon is currently cleaning house with its older shows.

Need Further Proof?

What prompted today’s post in the first place was one by the animated svengali that is Mr. Warburton. Tom was posting pictures of the special book that Cartoon Network put together for its 20th anniversary and featuring original artwork inspired by its shows. It’s a nice book and you should hit up the link to see the pictures, however Tom noticed something was terribly amiss, his show!

Codename: Kids Next Door ran on Cartoon Network for a not inconsequential six seasons and 78 episodes from 2002 to 2008 and yet was completely absent from a book celebrating such shows! Tom also noted that Ed, Edd ‘n’ Eddy were similarly absent.

What does that say about how a network treats its shows? If it’s willing to sideline them entirely for its official history then it can’t think very highly of them can it?

The current methods are almost certain to continue, at least for the older shows. Newer ones like Adventure Time and Regular Show seem to have spurred the network to take its properties more seriously. DVDs of both shows are available (although only the former as a season boxset) and both can be streamed through Amazon up to the current season. Both shows have also seen much more (and higher quality) merchandise than previous shows, Adventure Time in particular.

Not all shows are treated equally though, with a lot of the criticism over the cancellation of Symbionic Titan levelled at a lack of available merchandise.

All of this is rather depressing from both a fan and a business standpoint. Cartoon Network shows are popular, but it seems that the dunderheads withing the Time Warner corporate monolith are determined that they should be treated like unwanted children once they’ve fulfilled their initial runs.

Do think Cartoon Network have done a poor job of handling their shows? Let us know in the comments!

UPDATE: It would appear that Cartoon Network has started to see the error of their ways. From March 2013, a whole host of content (both new and old) will be available on Netflix. The deal also includes a load of Warner Bros. content although no details are available at the time of writing.

This is most certainly a great positive step in the right direction for the network. Hopefully it’s not the only one.

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Only 14 Months Late, ‘A Monster in Paris’ Finally Reaches America

4 Comments / Business Models /
Amazon_A Monster in Paris BR cover
Via: Amazon.com

You may or may not be familiar with A Monster in Paris. It’s an animated film produced by Luc Besson that never seemed to make it to American shores despite a limited release in Canada (and a proper English dub too.) It was first mentioned on this blog nearly two years ago, and Irish animater Nichola Kehoe was exceedingly generous in providing a guest review when the film was released there in February 2012. Now, fourteen months after its premiere, A Monster in Paris finally gets an official US release.

The Facts

With thanks to Mike Bastoli over at Big Screen Animation, we learn that the film gets its release through the good people at Shout! Factory. They’re not being picky either, with both a 3-D Blu-Ray/DVD/digital copy combo pack and a plain ol’ vanilla DVD being your choices come April 16th.

I’m excited for this film, and have been ever since the I saw the trailer above (and even more so since Katie Shanahan,  a.k.a. Kt Shy gushed about it after a Toronto screening). It looks fantastic and Luc Besson being the experienced director that he is, the story is sure to be at least competent in concept as well as execution.

Why The Heck Did it Take 14 Months?

Unfortunately, the film did not do great business at the box office despite being a hit with the critics (isn’t that always the case). Yours truly was even admonished by Digital Domain founder Scott Ross for suggesting the film was a model to follow. (It lost ~$10 million.)

In any case, no US partner was involved in the production. This alone would have made getting into that market a lot tougher. Yes, GKids has been known to take on independent foreign films with success. Why they did not do so in this case remains unknown, but their 2012 slate was quite a full one so it’s a possibility that A Monster in Paris simply didn’t get the luck of the draw.

Without a theatrical release, DVD sales are a steep uphill battle (no pre-existing public exposure). Shout! have a bit of a knack for precisely this kind of thing though (they released, and I have, DVD boxsets for the DIC series Sonic Undergound if that’s any indication). Discussions take a while and so finally, more than 14 months after its premiere, we’ll finally be able to see A Monster in Paris in the US without having to resort to ‘special imports’ or The Pirate Bay.

The Questions This Debacle Raises

From a fan’s point of view, it’s ludicrous that we’ve had to wait so long for a film. OK so there aren’t that many of us (or maybe there are, if Google search recommendations are anything to go by), but we do have money that we’d gladly give to see the film. I’m a patient man, but plenty of others are not, and by waiting so long, the producers may well have forgone some revenue. A $10 million deficit is a large amount, but getting some money back is better than none at all, right?

Secondly, what exactly has been going on in those 14 months? I doubt that the producers have been searching for a US distributor all that time. All signs seem to indicate that none was lined up before the film’s completion and all mentions of a US release end around the time of the film’s premiere.

Lastly, how does this delay benefit the studio that produced it? Not being in the US market until now will undoubtedly have hurt their revenues, and not just in the obvious ways. Yup, CGI filmmaking technology continues to develop a rapid pace, and a film released last year (let alone more than a year ago) is going to look outdated no matter how well it was made. By releasing so long after its production, it will run the risk of appearing to those unfamiliar with it (read: the general public) as an inferior, cheaper production than it really is. All told, it hurts the studio’s chances and opportunities for creating another feature film.

How To Ensure It Doesn’t Happen Again

Europe remains a productive creator of animation (both theatrical and otherwise), but I fear that in the case of A Monster in Paris, not enough effort was put into making the film available in other parts of the world. That’s not to say they didn’t try; the film was lip-synched to the English script, not the French one, but of course that won’t bring in revenue on its own.

The US market is massive, and complicated to boot. Unfortunately it is also dominated by a few large chains; chains that are cozy with the large US studios and would far rather show a film from one of those than a foreign, independent one. GKids has so many issues with them, that they almost always avoid them; favouring independent cinemas instead.

This situation is where a service like Tugg would come in useful, allowing independent players the ability to reach mainstream audiences without the cost of a traditional blanket marketing campaign.

Until then, April can’t come soon enough.

Would you have seen A Monster in Paris in the cinema in the US? Why or why not? Let us know below!

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What An Analyst Sees In DreamWorks…And What They Missed

Analysis, DreamWorks /

DreamWorks_Animation_SKG_logopng

DreamWorks Animation is a public company. Its stocks are sold on the New York Stock Exchange (NYSE) and have been since it was spun off from the original DreamWorks LLC in 2004. Since then, it has existed as an independent entity producing its own films in partnership with a distributor (formerly Paramount, now FOX). As a public company, it is subject to how various ‘analysts‘ think the company is doing. Today I’m going to look at one so that we can all see what Wall Street sees in Dreamworks, and also what they miss.

For the analysis, we’re going to use a recent one by Buffett Junior on Seeking Alpha, a website devoted to analysing stocks in all sorts of ways. It’s a fairly straightforward article with no big surprises but that doesn’t mean its all-inclusive.

What The Article Got Right

DreamWorks Success

During the last fifteen years, DreamWorks has created some of the best and most memorable CG animated films of all time.

You can’t argue with that. The studio certainly has created a string of successful CG films that are bettered only by Pixar. Disney as we all know, struggled to get their CG act together before ultimately buying the Emeryville studio to fix the problem. Other studios have also found success, but on a much more modest scale. DreamWorks specialises in big-budget blockbusters, and has so far done well by US standards.

Its Release Schedule

More recently, the company announced that it will now do three films per year from 2013-2016. I believe that this larger annual release schedule is likely to create more stable financial results for the company.

Despite the increasingly crowded marketplace, DreamWorks does need to get as many films out as quickly as possible for simple reason that as an independent company, it is dependent on its library of works. Tying into this was its recent purchase of Classic Media, which will further enable it to extract revenue without the expense of creating something new.

The Focus On Sequels

Investors might notice that a good portion of the future release schedule is comprised of sequels. The company’s long-term goal is to release at least one sequel film every year. With an entrenched fan base, sequels are inherently less risky and provide the opportunity to generate additional profits through increased home video sales, merchandising, and licensing.

You can’t argue with that logic, its right on the money but we’ll discuss it more further down.

Non-Film Activites

In recent years, DreamWorks has commenced a number of initiatives aimed at further capitalizing on its franchise film properties, such as Shrek, Madagascar, Kung Fu Panda and others. These business initiatives seek to diversify the company’s revenue streams by exploiting the film properties in other areas of family entertainment…

Slowly but surely, the studio has moved from its traditional base in feature films. the article discusses live-shows, TV shows and the various theme parks the company has either announced or already has in the works. There’s not a lot to say except that the move ensures that as the feature film division starts to play a smaller role in the revenues, it will help insulate the studio from the fluctuations of the film market.

The Managment

Under Mr. Katzenberg’s leadership, DreamWorks became the first studio to produce all of its feature films in 3D and in 2010 became the first company to release three CG feature films in 3D in a single year. It would be difficult to name anyone better suited for this job than Mr. Katzenberg.

My admiration for Jeffrey Katzenberg has been noted before and to say he is the best person suited to the job is a fair assessment of his value to the studio. His experience with Disney during its 90s renaissance has proven very valuable to DreamWorks, especially so since the company was spun off from its parent.

Risks

Because of the company’s limited release schedule, a box-office flop could significantly impair annual earnings and cash flows. It is extremely difficult to forecast a movie’s performance before its release, especially for non-sequel movies.

…

Animated films typically take longer and are more expensive to produce than live-action films, which increases the uncertainties inherent in their production and distribution. The typical DreamWorks animated film takes three to four years to produce after the initial development stage, as opposed to an average live-action film, which can be produced in less than one year. Additionally, the average budget for a DreamWorks film is $150 million, which is much higher than even that of a big-budget live action film.

A more near-term risk that investors should consider has to do with the company’s most recent theatrical release Rise of the Guardians, which so far has been a huge disappointment. The film cost about $145 million to make, and it has generated $260 million in global box office ticket sales since its debut in late November, well below that of a typical DreamWorks Animation movie. Before DreamWorks can make a profit on the movie, its distributor needs to recoup all its expenses plus pocket 8% for itself. That is the hurdle a DreamWorks movie has to clear before it even reports any revenue. Since the entire undertaking shared by the studio producing the movie and the distributor is approximately $300 million, DreamWorks will most likely be forced to record a large write-down next quarter. In other words, the company will report lower earnings than investors expect and the share price will most likely suffer because of it.

All of these can be evenly applied to any animation studio, although they are again more pronounced because DreamWorks is independent with no corporate parent to pick up the difference if they make a loss. There’s not much to add to these, but other risks are discussed below.

The rest of the article deals with the financials and valuation, neither of which is of interest to me and is unlikely to be of interest to you either, so we’ll ignore them.

What the Article Missed

The article provides a very comprehensive overview of the DreamWorks Animation organisation. The items above are totally worthy of inclusion, but they are not in and of themselves the entire story when it comes to a studio like DreamWorks. Here’s what it missed.

DreamWorks (Relative) Success

Yes, the article does include this, but it does only look at CG films and in although it notes that the studio’s films make up almost half of the top 20 highest grossing CG animated films, it’s not quite as simple as that. Why? Well quite simply, the entire list is made up of films from DreamWorks and, uh, Pixar. In other words the only other CG studio in existence for much of the time.

OK, so the revenues look good, but it’s like being in 1939 and saying Fleischer Brothers is a successful animated feature studio when there’s really only Disney to compare it to, and the market hasn’t fully developed.

The Animated film market is a bit more complicated than that, especially when you realise that DreamWorks began with traditional 2D animation and has faced competition from the same ever since.

The Focus On Sequels

Again, the article makes light of the sequels and notes that they are safer than original material. However, DreamWorks has been known for being extremely sequel-happy. (Remember Jeffrey Katzenberg’s comments about there being five Kung Fu Panda films after the original’s success?)

What the article doesn’t look at is how restricting that outlook can be. Yes, sequels are a financial safe bet but that argument flies out the window when you look at Pixar. They somehow manage to get a good story out [almost] every time and to be fair, their case of sequelitis has more than likely been acquired from Burbank than from within.

Original films do carry more risks, and this is something that animators and those unfamiliar with the way stock markets work can find tough to understand. Yes, it would be great if DreamWorks released original films constantly (and got great revenues for it), but when the odd dud does get through, that regrettably puts a squeeze on the studio’s ability to borrow money (and thus operate); an ability that is sadly regulated by the stock market and its skittish ways.

Alas DreamWorks needs sequels, at least for the foreseeable future as it funds its expansion plans. Until then, we can expect to see regularly recurring franchises. Let’s just hope they don’t reach Ice Age levels of ridiculousness.

The Non-Film Activities

The article doesn’t dwell too long on these anyway, but it completely neglects to mention two things, namely the studio’s digital strategy and its gradual shift to a technological focus.

Firstly, DWA has proven to be a bit of a pioneer in the digital media market. Although it remains a very traditional Hollywood studio in its home video dealings (there’s still plenty of money in DVDs), it was the first major studio to give Netflix the early rights to films. In other words, from 2014, their films will be available on Netflix before they are broadcast on television networks. Although it’s a fairly minor detail, it is indicative of the seismic shift that the media market is currently undergoing.

Secondly is the studios not-so-advertised shift to technological development. Besides the Ptch app the studio has developed, on the enterprise side, its tools and systems have become models for others to follow. That is something that many analysts seem to gloss over despite the fact that it his rapidly becoming a critical factor in the companies operations.

‘Piracy’

Piracy and shifting consumer preferences could severely weaken DVD sales, a major source of profits for all movie studios for the last decade.

Although that’s a common argument, there are many, many more factors at play when it comes to DVD sales. Illegitimate downloading is only one factor. DreamWorks appears to be already addressing the issue with the aforementioned Netflix deal, but you can be sure that the studio is well aware of what will happen as DVD sales slide. It’s a risk, but not as substantial a one as it normally made out to be.

Revenue Sources

The company currently derives substantially all of its revenue from a single source, the production of animated family entertainment, and the lack of a diversified business could adversely affect the company.

Such a statement appears to imply that the animation market is a non-diversified one. It’s the classic “animation is a genre” outlook. There is plenty of diversity within animation itself and the studio has done quite well to diversify itself within it. The article even discusses its move into other industries like theme parks and so on.

I don’t think it’s a fair assessment to proclaim DreamWorks content model as a risk. Would it be nice to see some more mature content from the studio? You bet, but the US is regrettably far behind the likes of Japan where animation is almost as much of an adult’s movie-watching experience as a child’s. Until that fact changes, DWA will have to stick with aiming content at younger consumers for the time being.

Conclusion

Apologies for the super long post. If you hung in until now, you’ll know that sometimes a studio’s health is dependent on a wide variety of factors that analysts can sometimes skip because they aren’t as important to the bottom line as they initially appear. Secondly, you’ll have garnered an idea about how a studio can get the cold shoulder from stock markets when an artistically great film does below “expectations”.

What would you add to the above? Is there something that DreamWorks could be doing in your mind to grow its business but isn’t? Let us know in the comments!

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More Evidence Of A Theatrical Animation Bubble

6 Comments / Industry /
PPG-Bubbles
Animation+bubble = Bubbles!

Back in October 2011, I took a look at four indicators that appeared to demonstrate that we were in a theatrical animation bubble. While those four factors are still very much relevant in 2013, let’s focus on one of them, namely the number of players involved. That factor alone should be cause for concern that we’re getting ever closer to a theatrical animation bubble.

The Current Players

For years, Disney pretty much had the theatrical animation market to itself. Sure there were a few minor players now and again (Don Bluth, Steven Spielberg, etc.) but for the best part of the last century, animated feature film = Disney.

That all began to change in the 90s as more studios latched on to the profitability and longevity of animated films. That period continues through to today with the  studios below planning to release films in 2013:

  • Pixar
  • DreamWorks
  • Sony
  • Blue Sky (FOX)
  • Disney Feature Animation
  • DisneyToon
  • Illumination (Universal)

That’s a fair number of studios simply producing films. On top of that, they are actually releasing nine films. Now that’s just your large American studios, on top of that, there are films being released around the world that may or may not make it to these shores (although yours truly hopes that Song of the Sea certainly does.)

Nine Films? Can that be considered crowded? That’s a good question and the answer is, maybe. Animated films have shown remarkable resilience in the market but only if their perceived quality is high. CGI was a bulletproof format until it became ubiquitous. Today, mediocre CGI films can have a tough time just breaking even. DreamWorks’ recent Legend of the Guardians is proof of that.

The Current Signs of a Bubble

What prompted today’s post was the announcement that Warner Bros. has made a move to explore feature films again by tapping a number of talented individuals to operate as a sort of think tank for ideas. While Warner did have a theatrical division at the turn of the millennium, it has decided not to go that route again (a tacit admission that they screwed it up last time), opting instead to use an outside studio for actual production.

While the Warner move should be welcomed, it does make cause for concern that at this point, there will be eight entities vying for a similar number of young eyeballs that there was 10 years ago when only half those studios were in the marketplace.

With more players comes more competition, and with that comes the possibility of spiraling costs and compromises on quality. I don’t mean to engage in fear-mongering, far from it, but we should be considering these things while times are good, because they will help prepare us for when those times when the chips are down.

Poorly performing films already result in layoffs, what happens when that affects more than one studio at the same time?

The Deciding Factors

The first thing to consider is that the amount of free time people have isn’t rapidly changing. It is gradually increasing, but there hasn’t been any massive changes over the last 40 years or so (at least in the US.)

Secondly, theatrical films, or more accurately, feature films, must contend with lots of other competitors at multiple stages of their commercial lives. At the cinema, they must compete with other uses of people’s time. At the store, they are competing against other DVDs, and when they finally make it to TV, they could be up against the latest reality TV show. Cinema’s themselves, though long used to competing with the likes of television, must now also grapple with the fact they they are no longer the sole place to see the latest films.

Lastly, quality will have a massive bearing on whether we are in a bubble or not. The year 2012 was a good one for the the north American box office but it was driven by only a few large hits, a worrying sign that smaller films aren’t picking up the slack when it comes to dropping cinema attendance.

On a related note, we should keep in mind that the box office is far from the only thing affecting the profits of feature films. Things like home video as well as TV and streaming rights all have a role in how animated feature films perform. However, history indicates that Hollywood studios remain inexplicably fixated with box office grosses and continue to measure a film’s success by that yardstick more than any other.

The Mitigating Factors

Managing the bubble is tough. Profits are being made, wages are relatively decent and consumers continue to watch animated films. As far as the indicators go, it’s a good time to be getting into the market. However, as we all know, the housing market was also a great thing to get into, until it suddenly collapsed in 2008.

Ideally, we need to see either less output on the part of the studios, or more opportunities to watch them. Seeing as the number of screens and the amount of free time consumers have aren’t changing as rapidly as the market is rising, we’re eventually going to see a crunch. That means output is going to have to be reduced.

“But Charles,” I hear you say, “Pixar, Disney, Sony, Blue Sky and Illumination only release one film a year, how can they cut back?” That’s true, but remember, in the 60s and 70s, Disney only put out an animated feature once every three years. Dark times they were, but economics dictated such a schedule and the studio survived (barely.)

That leaves DreamWorks as the only large studio pumping out more than one film a year. Although that’s all part of Jeffrey Katzenberg’s current strategy, there’s a good chance we’ll see that number dropping in the near future as that studio’s library gets up to an acceptable size.

Will The Theatrical Animation Bubble Pop?

I sincerely hope not, and audiences have shown a remarkable fondness for animated features on a level that they have never enjoyed before. It would be devastating in plenty of ways if the [good] momentum that has built up over the last 20+ years was lost. For now, keep an eye on the numbers, and hope that they remain good.

Do you think the bubble will pop? What can be done to ensure it won’t? Let us know with a comment!

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Why The Brand Of An Animation Studio Matters

Analysis /
Via: The Animation Background Blog (defunct)
Via: The Animation Background Blog (defunct)

In a recent post on Cartoon Brew, Amid Amidi makes the case that YouTube’s attempt to create branded, niche “channels” has been ineffective compared to the individual videos that have been racking up the large viewing numbers on the site. I will demonstrate why the concept of the brand of an animation studio matters and why that will likely continue for some time to come.

The Background To Amid’s View

The original post dealt with the fact that the recent video of a toddler being grabbed by an eagle was technically animated and therefore one of the most viewed animated videos of the year. Amid’s point was that this single video did so without any significant backing behind it at all:

The success of this animation serves as a reminder that corporations remain clueless about what audiences want to watch online. YouTube spent $100 million dollars last year in its backward-looking attempt to create niche “channels” a la cable television. This single piece of animation, produced by students as a class exercise, outperformed the viewership of 76 of those YouTube channels. I don’t claim to have any answers as to what people want to watch online, but it’s pretty clear that the entertainment industry’s cynical top-down approach of mass-producing content for narrow demographics has become irrelevant.

Now that’s a fair assessment of the situation, but it does over-simplify things. This video garnered so many views for its content; an eagle snatching a child. That’s something that a lot of consumers (and not just brainless ones) want to see. It’s the kind of video that in times gone past would have made the evening news across the country, but thanks to modern technology, we can see it instantly on the internet.

Where Branding Comes Into Play

My original comment on the article pointed out that branding was the main reason why the YouTube channels were being created in the first place:

…If you asked the average punter in the street who made this, they likely wouldn’t have a clue. The limits of their knowledge would extend to the fact that it was outed as a fake and that’s it.

Branded channels are an easy way for companies to give consumers an easily recognizable symbol of quality and style. So even though it may appear backward looking, it actually does serve a purpose.

Videos like this one and Psy’s Gangam Style are flashes in the pan. Yes, they rack up the views, but any record company executive will tell you that a moderately successful artist will bring in more money than a one hit wonder any day and their brand helps play a large role in that.

Amid’s response was as follows:

Branding is a term that means nothing in the context of entertainment, creativity and filmmaking. It’s a modern concept invented by business world hacks who cannot comprehend the abstractions of creative enterprise.

Now I don’t disagree with that for a second because he’s absolutely right. Branding and creativity are mutually exclusive things. Creativity doesn’t depend on branding and anyone who’s familiar with Wal-Mart will know that branding certainly does not depend on creativity.

Such circumstances do not, however, mean that both can be entirely successful without the other. Branding may not be necessary for a quick success in the marketplace but I can guarantee that it will become necessary for repeated success.

The Historical Aspect Of Branded Animation

If we look back at the history of animation, it quickly becomes apparent that while branding didn’t play much of a part in the early years, by the early 30s, it became rather prominent. Early cartoons were produced by a vast array of individuals and small studios. Gradually, however, a few came to national success with one in particular casting a shadow over everyone.

That was, of course, Disney, whose cartoons were the standard against which everyone else was measured. In the beginning though, Disney was just a studio name like any other. Its purpose was simple; to inform the audience who made the film.

With the success of Mickey Mouse though, the Disney name came to mean much more than just who made the cartoon; it began to indicate the kind of entertainment and quality that audiences should expect in the film about to be screened. By the time Snow White rolled around, Disney was well established as more than a name; it was now a brand.

Other similar animation brands include the Looney Tunes and Merrie Melodies as well as MGM with their Tom & Jerry cartoons among others.

A cautionary tale can be had from all this though; note there is one studio’s name missing above. That would be Fleischer Brothers. That studio was second only to Disney in success in the 20s and 30s but, their brand was nowhere near as powerful as Disney’s. This was despite similar levels of success and the fact that each film had the ‘Max Fleischer presents’ line on every title card. When Paramount took over (whether through wanting to make a clean break with an unpleasant past or not), they eliminated the Fleischer name. The Fleischer brand quickly disappeared into the history books. It’s possible that with a stronger brand, Paramount may not have so readily cast it on the scrapheap.

The Contemporary Importance of Branding

Today, branding in animation continues to define what kind of entertainment each studio produces. Josh L. Dickey recently wrote an article on the very topic for Variety where he takes a look at the cross-pollination of the Disney and Pixar brands in their 2012 films, Wreck-It-Ralph and Brave respectively:

Could this be the outline of an identity crisis for Disney? In truth, having two of the world’s strongest entertainment brands emulate one another is probably a good problem to have. Disney insists no one at the Mouse House is sweating this, but the fact is the studios veered into one another’s creative lanes this summer and, well … people noticed.

To be fair though, Disney and Pixar continue to have very strong brands that resonate firmly with consumers. But what if you took a DreamWorks film (say Megamind) and slapped a Sony Animation ident at the start. Would audiences even notice? Is the DreamWorks brand strong enough and their films unique enough to differentiate themselves from the rest? What if there was an Illumation Entertainment ident in front of Cloudy With a Chance of Meatballs? Is either brand involved there going to be in trouble? The answer is possibly.

If you switched to the TV landscape, content aside, what differentiates the various studios? Brown Bag Films have their logo at the end of every show they produce, but most consumers know that Doc McStuffins is a Disney show, not a Brown Bag one. Surely that is an indication of the relative power of the brands. Brown Bag (being the smart people that they are over there) are rectifying the situation by heading into features, just like another Irish studio, Cartoon Saloon.

Why The Brand of an Animation Studio Really Matters

Returning to the context of Amid’s original post, YouTube channels don’t so much serve to create niche content so much as it gives creators (or more accurately, investors) the surety that the content they are funding will be received by a certain audience. Business constantly revolves around risk: measuring it, detecting it and managing it. Yes, you could fund the best animated film ever made, but because we are humans (and therefore idiots), a good brand association will not only greatly increase the chances that a film will succeed commercially, it will also help ensure it happens again.

In that frame of mind, if the creators of the eagle video launched another one tomorrow, would they achieve the same levels of success as their original one? What if they somehow branded the first video? Now how would they fare? In casual discussion, the first case would be “those guys who made the eagle video” while the latter would be “so-and-so”. They would, in effect, become a brand.

All that YouTube channels do is codify for viewers what kind of entertainment they can expect and in that respect, they are simply the latest in a long line of branded animated content.

Creative and artistic animation can still be commercially successful, but repeated creations inevitably lead to the creation of a brand, intended or not and since any commercial enterprise wants to succeed on a continual basis, that’s why the brand matters of an animation studio matters.

Do you think that branding YouTube channels is outdated? What could they do instead? Let us know in the comments!

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