If you’re not familiar with Warren Buffet, pretty much all you need to know is that he’s one of the richest men in the world. That doesn’t have a lot to do with animation, at least on the surface, but what Buffet is good at doing (investing) certainly is and his advice is well worth heeding too. Let’s take a look at why that is.
[box color=”blue” align=”center”]Are you receiving the only email newsletter of animation articles you’re not reading anywhere else? Get informed every Sunday by signing up here![/box]
What I’m getting at when I say that animation needs a Warren Buffet is that his approach to investing should be how studios approach ideas. It’s also funny to think that the most successful investor in American history is so often ignored by the very people who should be paying attention. When it comes to animation development, it’s a similar scenario; Fred Seibert has found plenty of success over the years with his incubator approach that has been seldom replicated with similar levels of success by anybody else.
So what sets Buffet apart and just why should animation development look to him for guidance?
The Focus on Growth
First and foremost, Buffet focuses on growth. he only invests in companies that he expect to grow, and in the medium to long term at that. He doesn’t buy things that will make him a quick buck today, rather he buys and holds for a long time, often decades.
Ideas and concepts in animation require a similar, long-term approach. There is little point in trying to capitalise on an idea that is popular today, if it’s likely to be out of date by the time the film is completed. It’s partly why you’ll often see animated films based on pop-culture quietly whimper out onto DVD and Netflix instead of getting the theatrical release that was originally intended.
This isn’t to say that sequels and spin-offs are a part of the equation, but rather that animated films have that timeless appeal that live-action can’t provide. Animated films have a habit of remaining popular for decades and you won’t ‘grow’ the film so to speak if you’re only focused on today. Plenty of films (those from Pixar and Disney included) have long stopped aiming for a long life and are more than content to live in the moment, hamming it up for all it’s worth.
If you read even a little bit of anything Buffet writes, you’ll quickly discover that he loves intrinsic value. He loves to pitch GEICO insurance too, but that’s another story. What intrinsic value is, is the non-monetary value that will be the real driver of growth in a company. In Buffet’s case, that’s usually the people, or the infrastructure or the product it creates/sells. In other words, a company can have a lot of assets and make a big profit, but if it’s workers all leave, or its product is bested in the market, it isn’t worth a thing. Essentially intrinsic value is the actual, real, value that Buffet gets when he invests, and what pays off in the end.
So how does that translate into animation? Impossible you say! Well, not so fast. Intrinsic value can take many forms in animation from the skills of the animators to the quality of the characters and storyline. For brevity’s sake, we’re just going to lump them all together and say that the intrinsic value of an animated film is how likely it is to be rewatched.
Kids will watch anything again and again, but adults are more selective. Perhaps it’s partly because they can absorb and process more information in one viewing or that the constraints on their time are more severe. Either way, they will not watch a film again unless they perceive a benefit in doing so. That’s where the intrinsic value of an animated film lies, and it’s where plenty of studios are missing out.
The best part is that this value can take multiple forms, e.g. the characters, the story or the visuals, but my money would be on the characters. If they are truly interesting, viewers will come back again and again to watch them. It’s why sequels and film series are so popular; most viewers aren’t so much interested in seeing what happens as they are how the characters will react. Why leave that until the sequel? Knock it out of the park the first time.
Striving for this aspect also does a lot to assist in the first point. High intrinsic value within in a film will do much to ensure it remains popular for years to come.
Let Go of the Emotion
It’s funny to think that such an emotional thing like filmmaking really commands that you let emotion go in order to succeed; it is a business after all. However, plenty of studios let emotion get in the way of business deals. They sign what’s hot, or with what appears to be a good idea rather than actually sitting down and hammering out the truth.
Warren Buffet does not do emotion when it comes to investing. He looks at the facts and only the facts of the deal. He looks at the intrinsic value of the investment, he looks at the predictions for the long term, he looks at the makeup of the firm, and he always looks at how much it all is actually worth.
A similar approach is needed to animated films. Decisions shouldn’t be made on how nice a character looks or what the plot is. They should be made on how likely the film is to deliver on the goals above, like how long it will remain popular and how likely people are to watch it again and again.
Too many animated features ignore this in favour of tugging on emotions in all directions. Frozen is a key example, as is Monsters University; films made on the preamble that the audience and studio are already [jointly] invested emotionally in them and are thus likely to be successful.
If Warren Buffet made investments based on emotion, he would not be near as successful as he would be, rather he would be just like plenty of other investors out there; buying high and selling low.
Accept the Losses
Going hand in hand with the point above are the losses. Buffet doesn’t get emotional about them; he accepts them as part of doing business and doesn’t let them get the better of him. Instead, he just gets on with it and learns from the experience.
Animation studios aren’t like that. They abhor losses of any kind and aim for a home run every time they’re up to bat. DreamWorks perhaps embodies this more so than others, and every time it missed, the studio suffered (in real and implied ways.)
The problem is that studios can’t seem to stomach any losses. We here about the big misses, but there are plenty of smaller ones too that don’t seem to hurt any less. That has to change. Some losses are simply a part of doing business and the goal should not be to eliminate them, but rather to mitigate their impacts. Buffet’s company does this by investing in multiple sectors of the economy so that a downturn in one won’t drag the entire company down.
A diversified studio will offset movie losses with income from TV and parks (a la Disney) but that doesn’t mean that the odd stinker won’t sneak though. If it does, provided the studio adhered to all the steps above, it may become profitable at some point in the future.
Warren Buffet has been expertly adept at seeking out and acquiring investments that have delivered phenomenal growth. He’s succeeded because he does his homework. Right now, it seems that everyone and their dog is getting into animation ins some way or another, but so many are rushing in without thinking straight. They’ve diving in without an exit strategy, or much of a clue of what they’re doing at all. Animation needs someone like Warren Buffet to not only show everyone how it’s done, but to improve the image of the field and bring it up to a somewhat respectable level.