The theatrical market for animated feature films has remained much the same for many decades. A few things have changed of course, but on the whole, things operate in much the same way that they always have. That is to say, films are released to cinemas first, then home media, then PPV cable, then regular cable, before finally spluttering onto regular TV many years after the initial release. Such a model has served the industry well for decades, but for cinemas, the jig may finally be up, and animated features are going to have to change if they are going to survive and thrive.
Cinema is changing, The writing is on the wall an has been for some time. The industry likes to trumpet the continual growth in box office receipts, but they conveniently neglect to mention the fact that actual attendance numbers (or the number of bums on seats) has been either stagnant of falling for years.
The massive and consistent success of animated films in recent times does not offset these trends. Sure they’ve been a solid and reliable revenue source for many studios, but even they cannot halt the changes being foisted up on the entertainment industry as a whole.
In a series of posts over on MediaREDEF, (and if you aren’t subscribed to Jason Hirschorn’s newsletter of the same name, you are out of the loop,) Liam Boluk and Prashob Menon take a long hard look at the cinema industry and propose some badly needed changes that are unfortunately becoming increasingly necessary if the industry is to stave off the competition. Their three part series is well worth your time to read and mull over:
- Part 1:The US Film Industry is Not a Growth Business
- Part 2: How the Major Studios Can Drive Domestic Growth
- Part 3: The Future of Independent Filmmaking
While animation is not necessarily the focus of the series, its growth as a format has made it inextricably linked with the remaining, live-action segment of the industry. It’s that relationship that this post will focus on through the lens of Boluk’s and Menon’s posts.
1. The Lack of Growth
That heading does seem contradictory doesn’t it? Animated films have exploded in recent years and everyone is trying to get in on the rush for box office gold. It seems to all and sundry that as long as you have a half-decent story, animation that passes for a Pixar knock-off and maybe a celebrity or two to round off the marketing efforts, you’ve got yourself a winner.
Perhaps you have, or rather, had. Overall, as pointed out in Part 1, the movie market is stagnating, and while revenues from animated features have been growing, they are merely taking money away from other films instead of driving overall industry growth. That is good news for animated studios, but still bad for everyone as a whole.
Boluk and Menon paint an even more depressing picture in the fact that while the number of films released by the major studios has fallen, their marketing spend per viewer has risen dramatically, and the leftovers of the box office pie are now split even more finely among the independents.
Where does that leave animation? In a sense, animation has conformed to this changing landscape more rapidly than live-action. The contraction of animated genres as produced by the major studios brings things down to essentially just one: comedy. That brings in the audiences, sure, but it confines the technique to only that in the minds of consumers everywhere. Similarly, live-action has rapidly shifted to tentpole spectaculars laden to the hilt with VFX and superheroes.
All this ought to be real concern for anyone either in or hoping to get into theatrical animation. The constraints may prove to be too much (i.e. we’re in a bubble) or given the long production times, may mean your animated comedy is out of style by the time it is finally released. The bottom line is that theatrical animation is even more exposed to the challenges outlined in Boluk and Menon’s analysis than live-action is. That could be a real harbinger of doom if things take a turn for the worse.
2. What to Change to Drive Growth
Boluk and Menon proposed some excellent changes and discuss them in superb detail but here’s a summary:
- New Release Models and Capturing Lost Spend
- “Non-Traditional” Release Dates
- Improving the Reliability and Comfort of the Theatrical Experience
- More Bundled Experiences
- Indie Acquisitions
If you can’t already tell, there’s a balance to be had between the responsibilities of the studios and those responsible for the screenings. Animated films have been robust for the the simple reason that their main customers (kids and their parents) aren’t a particularly fussy bunch. The appeal of added extras to the experience isn’t a huge concern for them, as is cost. A trip to the cinema remains a relatively cheap way to entertain kids, especially on a hot summer’s day.
That said, animated films could seriously benefit from some of the changes outlined above. Not least of which are the non-traditional release dates and improving the theatrical experience. By focusing on kids, animated films are concentrated on the Christmas and summer periods, which perhaps not-coincidentally, are when plenty of other films are also released; many appealing to kids as live-action flicks. Consider how well the original How to Train Your Dragon perfomed when it was released in relatively quiet March. Compare that with how the sequel performed during a summer release. For all intents and purposes, both films are equal artistically, and enjoyed good reviews from critics. Only one had the box office to itself for a number of weeks though.
Think of the theatrical experience. What does an animated film offer over a live-action one? Nothing! Yes, you could argue that a spontaneous commentary from the kid next to you is a non-optional feature, but otherwise it’s painfully obvious that animated films are as basic a viewing experience as any other film. They did have an edge a few years ago as animation proved a format that better exemplified the 3-D fad, but that advantage is now gone in both senses.
The only other proposed change that could radically effect animated releases is that of the bundled experience. Disney has long been the expert when it comes to disseminating its films across the company’s various divisions. The feature drives awareness which then feeds into merchandise, television shows, broadway shows and lastly, theme park attractions. The problem is that all these come after the fact; there is little drive to tie everything together before the theatrical release. While there have been moves in that direction in the last few years, for animated films to truly excel at the bundled experience in order to succeed.
Again, the focus on kids will severely inhibit the ability of studios to achieve this. Releasing an app for kids will not drive engagement or brand awareness in the same way that releasing limited edition merchandise will for adults. TV shows can likewise have disappointing results. Not to pick on HYYTD2 again, but even with a regularly broadcast TV show between films, its effect on attendance at the second film is marginal at best; the consumers (kids) either moved on or couldn’t fathom how the series kept them engaged.
So what’s the solution? There are many, but creating a bundled experience from library titles is a strong possibility. Which kid could doesn’t want to see their favourite film on the big screen, on their birthday no less, with all their friends present? The other is to try and appeal more to the adults in the audience. Companies like the Alamo Draft House are realising that it isn’t necessarily the content that is affecting adult audiences but the entire cinema experience itself. I.e. adults like to drink booze while watching a film, especially in a social setting. Why not watch The Little Mermaid while sipping a locally brewed craft beer? Most cinemas will only let you do so if you agree to stay at home.
3. Independent Films
In the final part of their analysis, Boluk and Menon focus in on the independents. While they have drastically increased their output, they’ve done so despite having an ever-smaller share of the overall pie. The result is intense competition among independent players and much-reduced revenues per film.
And they’re depressing figures too; 50% of films fail to bring in more than $250,000. Given how expensive animation is to produce, that represents a significant obstacle for independent animated films to overcome. Boluk and Menon choose to focus on pricing and distribution as possible areas in which changes would be beneficial.
Independent animation remains especially marginalised and ostracised in terms of theatrical distribution. Distributors like GKIDS are making inroads, but there remains a sizeable risk to their endeavours and the current payoffs are spectacularly small. Large cinema chains don’t help, but services like Tugg do by removing the risk for the cinema that they will have an unprofitable screening.
Finally, independent animation has a seriously unbalanced distribution of budgets. While larger independent studios like ReelFX, Laika, and Aardman can create films with budgets in the tens of millions, and truly independent animators can create films practically by themselves on a shoestring budget, there is a real lack of films in between. The Secret of Kells managed to blow everyone away with it’s level of quality, which it achieved for about €6 million. It’s sibling film Song of the Sea is likely similar, but they are quite alone.
A discussion about how independent animation could exploit gaps in the market could fill a series of posts in itself, but for now, I believe the market as a whole is criminally devoid of striking animated features, and such a situation isn’t going to change until someone cracks that nut that is profitability.
Boluk and Menon’s series of posts serve as a great snapshot of the film industry as well as a gaze into the crystal ball. The future challenges are undeniably coming and any studio that denies that is deluding themselves. DreamWorks sure isn’t, as their rapid (hectic?) diversification plans attest to. Yet film and cinematic film in particular isn’t going anywhere. Its survived the advent of television and it will survive the arrival of the internet, the question of what form it will take after all is said and done is still up for debate. I’m optimistic though, at the very least, we can see more than just animated comedies at the cinema.