The production of animated TV programs has never been greater. All three kids channels have full slates, numerous cable networks have their own shows, and FOX continues its long tradition of animated programming on Sunday nights. It’s a good time to be an optimist, yet it’s never been more important to be pessimistic about this sector of the business, because it’s about to go barrelling over a cliff.
I’m generally an optimistic person. It’s always more enlightening to see the upside in things, and to believe that the best is yet to come. However, when it comes to TV animation, there are dark clouds on the horizon. They’ve been slowly rolling into view over the last number of years, but they’re about to unleash their torrent of water and wash all that we know away.
There’s a couple of familiar reasons why the animated landscape is changing. They don’t need to be detailed here, but the combination of the internet, streaming, and new business models are all impacting the existing industry, and are producing radical changes as I write this.
However, it seems that very few artists (or indeed anyone) are aware of two important aspects to these changes:
- the actual effects they will have
- how quickly changes will occur
These two aspects will result in a drastically different animation landscape five years from now. In this post, we’ll discuss them, and what can be done to survive the rough waters we’re heading into.
1. Kids Channel Ratings Are Collapsing
This fact should be as plain as the nose on your face. Kid’s TV, once the most predictable, and stable portion of the business, is now in massive flux as its audience rapidly shifts to alternative viewing habits. Kids today watch content anywhere but on a TV, and they aren’t being passive either. Interactive games and apps rule the day, and many do not integrate fully with an existing TV show.
The most prominent indicator of all this is that ratings for all three kids cable networks in the US are falling, and fast. Nickelodeon just launched an OTT service, but coming about three years too late, the revenues from that service will not be able to offset the drop in advertising revenue from the cable channel.
You might think that this problem will be isolated to just the kids channels. There’s just one wee problem with such a viewpoint…
2. Guess Who Makes The Most Animated TV Shows?
Bingo! The same networks who’s ratings and revenues are dropping like stones. Industry employment in the US is heavily centred on California, and although features gobble up a lot of the publicity, it’s TV shows that employ the bulk of the industry. Disney, Nickelodeon, and Cartoon Network produce the vast majority of animated shows as measured by volume, and those network shows aren’t cheap by any means either. They require studios, artists and production staff, and take a long time to develop and produce before being broadcast.
All three kids networks will be making changes to their operations at some point in the near future, and given concentration of production in LA, that’s going to produce some real ramifications to the local industry, and the nature of employment within it.
It’s a double-whammy that the networks that produce the most animation are getting hit the hardest with their business models. Kids growing up today perceive television and passive entertainment completely differently than any generation coming before it. Digital platforms and interractive entertainment are growing in popularity and influence. Animation is certainly capable of adapting to interractive forms, but we cannot assume that the budgets we see for shows today will be maintained.
Networks will not throw millions of dollars at animated shows if the audience is not there to sustain it. Hell, they’ve proven as much already, even before the internet became a concern. What kind of reaction do you think they will have when there is no audience to speak of?
Other networks are not immune either. FOX has struggled for years to find a replacement for the Simpsons, and Seth McFarlane’s shows are starting to get a bit long in the tooth as well. That network’s shows has a good hold on the key 18-39 demographic, but my suspicion is that younger viewers are not moving into the lineup’s audience at near the rate that they should be, and the network is struggling to find the animated content necessary to do so.
All this isn’t a problem that’s confined to the US either. Although many channels in Europe are sustained by license fees or other public funds, they too are experiencing the same kind of audience shifts. They’re also facing the same challenges regarding ratings and advertising revenues, albeit not at the same severity as US networks. Europe and other parts of the world rely much more on 3rd party licensing when it comes to animated content, but American content is also broadcast in Europe, and vice-versa. The regions are interlinked, and problems in California, will reverberate elsewhere with similar results.
3. Nobody is Prepared for the Future
Even though the animation industry as a whole is nomadic in nature, I still don’t think the vast majority of people are prepared for a real and prolonged decline in the market. I’m not talking about a more severe recession either; there will be real and radical changes to the nature of both employment, and output.
The industry has always been able to weather general recessions, and even major layoffs at individual studios. Yet anything more drastic than it’s used to could create a truly dire situation.
Think in terms of the skills and work ethic that current employees have. They do no translate easily to the kind of business model and pace demanded by studios who release on the internet. Things have to be done quicker, more effectively, and for less money too.
Oh yeah, I haven’t mentioned that yet, have I? If you thought current salaries are low, just wait. Web animation has drastically lower budgets, and, given the low bar of quality that internet audiences will tolerate, the talent pool that existing artists will have to compete against just got a lot much larger.
Output, skills, salary: these are three areas that many in the industry today have been trained for, and grown accustomed to, as commanded by the established studio model. All three are about to be upended, and many will not be able to successfully adapt; the rest will be put through the proverbial ringer.
4. Things Will Get Worse Before They Get Better
How bad could things really get? I’m willing to bet that a 50% drop in output is not an unreasonable estimate. It might be even more, if live-action grabs a larger share for itself, and shows are licensed instead of produced. The point is that it will not be a normal recession. It will be wholesale changes to all aspects of the industry that will overturn everyone’s way of thinking about television and animation.
The good news is that once a new norm is established, things will grow again. Animation has an entertaining artform has proven very suitable for the internet and alternative viewing platforms. Although budgets and quality are low today, they will rapidly increase and will eventually reach the point where TV animation is today. The issue is that the rise will not coincide with, or be as rapid as, the fall in contemporary business models.
This is why I’m an optimist. The future for animated TV is very bright, even if the near future is decidedly murky. What is important is that people are aware that changes are coming, and that they are prepared for when they do. If they are, they will come out the other side relatively unscathed and ready to progress themselves and the industry.