The Disconnect That Leads to Industry Breakdown

Donald_chalkboard

Any industry is a complicated beast and animation is no exception. The skills in demand are constantly changing and nobody really knows where things are heading in that regard. Many still pine for the days when traditional animation was either hand-drawn or stop-motion. Today, CGI comes in a dizzying, vast array of forms and associated skillsets. How these skills are taught is something that has been discussed here before with this blogger advocating a return to apprenticeships in animation as opposed to undergraduate degree programs that teach skills that may be obsolete by the time students graduate. On a recent post on a related topic, commentator johnV posted a comment excerpted below:

I personally feel that the reason there are more CG films than Traditional Animation is because the lack of talent and the colleges that only teach CG animation. Before, the majority of animators were artists. They went to art school, not to an animation school. They knew how to draw, paint, sculpt, and create art. They learned animation from other animators while working in the animation studio. They knew the fundamentals of ART. John Lasseter said it himself, that all animators should know the fundamentals of art.

Today, most animation students don’t bother learning the necessary principles to creating art. Thus, they become button pushers. There’s not enough people who can do Traditional Animation anymore, because it’s not being taught. Animators who want to animate traditionally, have to teach themselves, watch Youtube videos, and read books. But there are no colleges for that anymore. There are a few that will teach a class or two, but not one that will have it as a degree.

And that’s perfectly fine for the colleges. Colleges are nothing more than a business, they use the technology and computer animation aspect to attract new students. They don’t care about the industry or what is the viable form of animation. They care that they fill seats in their class rooms, sell books and supplies, and charge an insane amount of tuition that the students will be paying back for a very long time.

And speaking of business, the major studios love button pushers… they’re easy to replace. Do you think that a computer animator has the pull and power of a traditional animator…. computer animators are a dime a dozen. A traditional animator is hard to come by. They can demand from their employers. So the studio prefers the control over the computer animators.

I’ve broken the original comment up for clarity, but let’s discuss all the very good points raised.

Learning the Art

Animation is grounded in art. It’s where the inspiration comes from and where it’s influence is felt. It is nigh-on impossible to completely appreciate animation if one does not have at least some appreciation or understanding of art in general.

So the question arises: should students be forced to have a solid grounding in art before undertaking a study in animation?

I would hazard that they should, animation can be taught, but appreciation requires coaching of the kind that education is supposed to provide in an ideal scenario. While many artists employed in studio’s today undoubtedly have artistic talent, we must consider those coming behind us as well.

Skillset Supply and Demand

johnV is right about a shortage of colleges not teaching traditional animation, but it comes back to the notion that a bachelors degree is something that affords the holder the ability to produce animation. That isn’t true, and plenty of the best animators managed to get by without any sort of formal qualification when it came to their animation talents.

In a way, we are seeing the flipside of what CGI went through 25 years ago. Back then, if you wanted to learn CG animation, you had to suss out the information for yourself; hardly anyone was going to teach it in a formal setting aside from a computer science degree.

Do we strictly need a traditional animation degree? Maybe not, but it is the lack of one that indicates how the skill faces a decline as old masters retire and their skills are lost to the ether.

College as A Business

Is college a business? Undoubtedly (at least in the US), it is, and we’re talking about more than the “for profit” colleges of the kind highlighted on Cartoon Brew a while back. Therein lies the disconnect between the education and the industry. Cathal Gaffney of Brown Bag Films has long bemoaned the skills taught by Irish animation programmes that are out of date compared to the ones he needs for the studio. The result is that he must source (more expensive) animators from abroad.

Do universities and colleges strictly care about whether or not what they teach matches what the industry needs? Well, why should they? Employment after graduation is the student’s concern, right? Whose to blame if they learned the wrong skills. Again, it comes back to schools teaching “animation”, a skill that, theoretically, should be universally applicable. Software is software after all and it can be learned or taught separate from the academic program.

We have long ago lost the close connection between studios and schools wherein there was co-ordination and cross-pollination between employees and students. CalArts is the utopian example, but others exist too. Today, employees, as disposable as they are, do not have the long-term relationship with studios that encouraged the notion of investing in oneself for the betterment of the whole. This leads to employees (to the delight of employers) acquiring a set of narrowly defined skills and relying upon them. Not only does this make them more disposable, it also tends to make them cheaper since they now compete against each other rather than everyone. Which leads us to…

Skillset Supply and Demand

Even a basic course in economics can highlight just what it is about supply and demand that vexes most people. They know that as supply increases, the price you have to pay for something decreases, but what if the supply is people, and the price paid is your salary?

In a purely economical situation, your salary will fall relative to the increase in demand. Any time salaries for animators falls, it isn’t so much because studios are trying to squeeze the extra buck (they are), but they can also get away with it because they can still find the labour they require.

CG animators are currently in demand, but there are also a lot of them. As johnV points out, they’re a dime a dozen, and unless you have something over and above what everyone else has, you’re expendable!

That said….a traditional animator may have a large skillset but not be in high demand. How much can they earn? Well, while price goes up with decreasing supply, it can also go down with decreasing supply if demand similarly drops. A traditional animator can hope to earn near nothing if there is no demand for their skills.

Where This Leads to Industry Breakdown

Where all the points discussed in this post tie together is that without sufficient co-ordination of skills, the industry from an employment standpoint starts to break down. We see studios close, artists laid off and production shifted elsewhere.

Colleges continually push students without any consideration for actual demand, that pushes salaries for existing employees down thanks to a larger than necessary supply of talent. We won’t even mention what unpaid internships do for the industry as a whole, but you get the picture.

On the other end, studios continually alter the skillsets they require leaving vast swathes of artists to either get with the program or get out altogether.

In the end, what results is an industry that doesn’t know what it needs and is incapable or producing it when it does.

The end result is breakdown.

Animation Industry Strategies Trends & Opportunities

 

Via:  Broadcast and CableSat
Via: Broadcast and CableSat

Have you ever heard of a report entitled “Global Animation Industry: Strategies Trends & Opportunities 2012“? It’s a rather serious-sounding affair with a pretty serious price too, €5,350.00 (or $5,000.00…hey, wait a minute, that isn’t right, is it?). Click here if you have any doubt. The report is put out by Research and Markets who bill themselves as “the leading source for international market research and market data”. Basically they provide data for market research purposes, the gist being that you can just pay them for it instead of having to conduct it yourself.

The description contains some fairly bland and generally known information about the industry (“animation is increasingly used in video games, and movies are also increasingly reliant on animation and computer graphic special effects”) but also lists the chapters of the report.

Now while I was all up for reading and reviewing the entire report. sadly $5,000 would create a sort of a cash flow, uh, crisis for me in this quarter and for possibly a good few after that, so instead, let’s see if I can’t come up with my own report instead. I’ll even leave it here for you to read, free! OK, let’s go!

1. Animation Segments

When you think of “animation segments” what do you think of? If you thought theatrical, TV, web and so on, guess what, you’d be wrong hahaha. You see the report considers animation “segments” to be different types of animation. I.e. flash, 2D, 3D CGI and stop-motion are all considered different “segments”.

Hmmm, that doesn’t make a lick of sense to me. Visual FX may  get a pass because the nature of that work does differ from traditional animation. So let’s re-write these animation segments shall we:

  • Theatrical films
  • TV shows
  • Shorts
  • Web series
  • Commercials
  • Video games
  • Visual FX
  • Etc. (educational and so forth)

These are the technique’s main areas of proliferation. They are where you can expect to find it, and they are where you should consider when deciding to create animation.

2. Forecasting Animation Content Demand

This chapter looks at animation demand around the world. Needless to say, things have been on the way up for many years now. North America has a decent market driven by features and TV shows.

Europe remains a very strong market thanks to various indigenous cultures, languages and producers. Of note is the industry in Ireland which has grown from near nothing to worldwide powerhouse in the space of 20 years. Creators in France and Italy continue to produce works for broadcast at home and abroad.

Markets in the far east are a bit trickier to say (at least from my place in the world) but one would assume that markets there, being significantly more developed than those in the west, are staying the course for the most part.

As for forecasting demand? Moderate growth in all markets would be a very conservative estimate.

3. Future Developments

A bit vague this one, but again, it can be broken down into a few easily digestible areas:

  1. Technology – Expect ever more reliance on technology in all aspects of the business; from design, to animation to distribution. Digital platforms will become ever more a part of the overall content strategy for all ages and genres. It would be wise not to discount the effect it will have.
  2. Audiences – Audiences won’t change drastically in terms of size (a steady growth as mentioned above is most likely) but I predict a greater number of young adults demanding good quality animated content and who are currently underserved.
  3. Revenues – As I’ve talked about before, the revenue model for all forms of entertainment has been upended by the internet. Traditional models of licensing to networks and broadcasters is disappearing and will likely be replaced by online viewing or pay per view in some form. Extracting revenues from audiences will command the successful creation and exploitation of a fanbase. That’s fairly tricky to accomplish but is not impossible. Either way, it is how things are going.

4. Animation Software Market Landscape

Much is given to the kinds of software that are available (there’s an entire section dedicated to plug-ins) but the gist of the matter is that software will continue to proliferate, but a gradual consolidation will begin to occur. Simply put, with an increase in complexity comes an increase in the amount of experience that is needed. More experience means higher wages. As a studio, it will become impractical to use software that is not in widespread use. The result is that the larger players (Adobe, Autodesk, Toon Boom, etc.) will corner the market. One will eventually get bought out.

That said, there could always be open source alternatives on offer…

5. Animation Content Creation

You know what’s going to change here? Not much, besides the increased use of digital and online tools for collaboration. Having animators in multiple locations working concurrently is nothing new. It stands to reason that the traditional methods of producing animation will continue in the same vein that they already inhabit. Interestingly enough, ‘ink and paint’ is a section here. Must be a ton of traditional animation being produced somewhere

6. Audience Dynamics

Because your audience is always moving, eh, eh? No? Oh well, Pixar is the poster child here for obvious reasons. Marketing and audience targeting get a mention, but c’mon, the easiest way to gain an audience is to simply create good quality content. Market research is a great tool, but it will only tell you so much, and it can so easily lead you astray.

Of note here is ‘Pixar’s Technological Advantage‘. While we don’t know what this section says, it is known that whatever advantage they did have has been eroded significantly since the heady days of the 1990s. While Pixar may continue to produce stunningly beautiful films, the competition has worked hard to catch up. Both camps are rapidly approaching photo-realism anyway, so on-screen advantages are mostly moot at this point. Interestingly though, DreamWorks has worked quite diligently to create and foster their IT platforms and software and they may hold an advantage over Pixar in ways that are not visible on-screen.

7. Economics of Animation

This one should be simple right? Make animation > sell for money > profit!

Things aren’t so simple though, and by the looks of things, the report goes into detail about licensing (pay to use my work), merchandising (pay to put my creation on your product), distribution (getting your work seen in different places) and exhibition (getting your animation on TV, DVD, etc). All of these require lengthy and costly negotiations and it’s well worth noting that even with the internet, these systems remain very much in place around the world.

That said, times are changing and it’s very much worth your while to keep in mind alternative options like YouTube and digital distribution. The report does not devote a section to it, but it is absolutely the single most volatile part of making animated content at the moment not only commands attention, it requires it.

Two sections are given over to copyright. Again, what they contain I do not know, but I’ve discussed copyright before and I would caution that relying on copyrights alone as a tool for extracting compensation or revenues is a false hope.

8. Guidelines for Setting up an Animation Studio

Already covered by this post!

9. Managing an Animation Studio

It’s just like any other business! Take in more than you spend, and make sure you have enough money to pay the bills as they arrive. Other than that, there really isn’t something in this section that you could not learn from a good business book down at your local library.

10. Animation Content Outsourcing

Ah, a contentious one this. Should you outsource? Are the cost savings worth the extra hassle? Which country should you outsource too?

These are all questions that will very much depend on the circumstances. It would be unwise to delve into them here.

The Rest

The remainder of the report goes through different global areas such as Europe, the USA, Korea, Japan and so forth with sections on how the industries operate, how large they are, how they do business and so on.

Conclusions

The bottom line is, this report is only worth paying for if you wanted to set up a studio and had absolutely no idea what the heck you are doing. Is it worth $5,000? I don’t think so. (I could easily do a detailed blog post on each and every section with what’s freely available on the internet.)

What does the report prove? Why that there’s a ton of money in animation of course!

Would you pay $5,000 for a report like this? Explain why with a comment!

More Evidence Of A Theatrical Animation Bubble

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!

Start Your Animation Studio In 6 Easy Steps!

The inclusion of this ad is explained at the end.

Yes! Start your very own animation studio is 6, yes, 6 easy peasy simple steps! Soon you’ll be on your way to Walt Disney-esque fame and fortune, or John Textor-like infamy and ridicule (if you prefer). Why have a boring office job, when you can be making cartoons! Funny, hilarious, maybe even serious ones! Your adoring public is awaiting! Don’t delay! Start today!

OK, enough of that nonsense and onto more serious things. Yup, animation is certainly booming. Everyone and their Mum seems to be getting into the business; either starting a studio or setting out their stall over on YouTube. So it should come as no surprise whatsoever to see that borderline spam site eHow (no, I won’t link, even Google will only help you begrudgingly) has a nice [snicker] guide to setting up your animation studio in 6 steps. Let’s deconstruct it.

Here’s the pitch:

Animation services are in high demand right now. Not only do film makers use animation services to create animated movies, but they also use them for special effects. Computer and video game manufacturers also utilize animation services to enhance their products.

Totally true, right? That’s why the industry as a whole has been expanding over the last 15 years. Then we get to the hook:

With such a high demand for animation this is an industry that is in desperate need of additional service providers, because of this you can turn your artistic abilities into a six or seven figure business.

That’s right, you too can build a $10 million business in one of the most competitive industries in the world.

From here, we go into the actual 6 steps. Step 1:

Find a niche for your animation business. You can focus on animation for commercials, animation for computer games, animation for video games, CGI animation for special effects or you can focus on producing animated shorts or features. The focus that you select will impact which supplies and equipment you use for your new animation business.

Hmmm, that’s a wee bit vague, but then again the industry is quite broad. Let’s see what step 2 says:

Buy equipment. You will need a quality computer system with extra hard drive space to store your animation, digital cameras, lighting equipment, animation paper, cellulose, paint, pencils, general art supplies, drafting tables, light tables, sound equipment and editing equipment. You will also need to buy enough licenses for your animation software to facilitate the size of your animation staff. Some animation software products that can be used include Toon Boom and Xara 3D.

A.K.A. Buy some stuff! Computers! Digital! 3-D!!!

Hire and train your staff. This is a step you can skip if you will be starting out as the only employee in your company. However, when you grow to hire a staff, you will need to make sure that each individual understands the code of ethics associated with your business. You will also need to make sure each is trained in the animation software the business uses. Fortunately, many animation software companies offer user training programs for employees to take advantage of.

Yeah, you probably should train yourself first, and you’ll probably want to hire trained staff so, y’know, they have a clue about what they’re doing. Then again, you could always hire interns

Develop a demo for attracting new clients. This demo needs to demonstrate your full range of animation services. Get the demo down to under three minutes long, while still keeping the images crisp, entertaining and cohesive.

Soooooo, spend money in the hope of acquiring business. Hmmm, surely you would start off small and build a reputation through hard work and excellent customer service and content, no? No? You’d rather blow all your seed capital on a demo that won’t earn you any experience points? Okie dokie then.

Acquire licensure and insurance. You will need professional liability insurance, commercial property insurance, a business license and a copyright for all intellectual property.

Very important these, especially the copyright, which you must acquire despite being granted it automatically. Also don’t forget to register and trademark the shit out of any names, logos, mascots, t-shirts and/or answering machine messages so you can sue the crap out of some poor sod and be rightfully compensated.

Launch your animation company by pitching your services to a target market. For example, set up a website to promote your services, purchase television and radio advertisements, or set up meetings with computer, video game and movie production studios to pitch your services. You may also benefit from hiring an agent to promote your services for a ten percent fee.

I love this last one. Basically it pulls the old “build it and they will come” schtick, which we all know works out well for anyone who’s tried it. Yup, nowhere does it talk about capital; where to get it, how to raise it and how to put it to work. In other words, the green stuff that enables you to do all the above.

The bottom line and reason for this post? The ad at the top gives a clue; people buy this kind of scammy advice! They buy it all the time! They see the dollar signs and the promise of a quick buck, and they get in there and have a good go at screwing up the industry for the rest of the folks busting their backs to make a living, or spend all their free time hustling to get new work.

It doesn’t take a genius to see the news reports of Pixar and Dreamworks’ mutli-million dollar grosses to convince greedy folks that yes, there is money in animation.

Who ultimately gets hurt (and yes, people do get hurt), it’s the actual animators and artists these clowns hire (or not) and either don’t pay them, or promise “exposure”. Let this be a warning: know thy enemy, he is the person who read those steps and attempts to hire you.

A Word on Blacklisting People

It’s a nasty practice and I’ve read about it in numerous places, most recently today over on the Animation Guild Blog, but blacklisting employees seems to remain commonplace or rather, perceivably commonplace within the animation industry.

First of all, just because someone pissed you off in the past, that’s no reason to never work with them again. People change, more often for the better as they get older and wiser (hopefully).

Of course, the ideal thing would to avoid the ugly situation that causes all the problems in the first place. Why let an employee wreck havoc in your department and ruin everyone’s day? It would be much wiser to sit down and try and figure out what they feel are the problems within the department or group. Often times it is the simplest things, like micro-managing supervisors that can be dealt with relatively easily, but sometimes larger things like deadlines can be what’s bothering them. Sadly, deadlines are part and parcel of life outside of a government job so there are not many ways around it.

Humans can hold some fantastic grudges that only serve to harm themselves in the long run. The blog post above mentions the infamous debacle between Art Babbitt and Walt Disney. The root of Art’s problem seems to stem from the fact the newcomers to the Disney studio were being paid at or near similar wages of guys who’d been there for 10 years or more. If I were in his position, I’d be pissed off too!

Blacklisting (among other things) can also damage your studio’s reputation. Granted, today’s weak economy means this is not as relevant as in the past, but if you have one or two employees who leave on bad terms, you can bet they’ll tell the world and his dog about how crappy it was to work at your place, and such word gets about, especially in industry circles.

I suppose respect for the individual is key here. If you respect them enough to work through their problems they way the expect their manager to, it is possible to avoid a heck of a lot of conflicts. Artistic industries (or indeed any industry) like animation should not be side-lining talented folks just because they had a row at work. The industry is all the poorer for it.

Lest we forget that classic quote from Homer Simpson

Kill my boss? Do I dare live out the American dream?

G’night everybody.