Animation is Finally a Commodity. Now What?

It took long enough, but animation is just about everywhere you, and (among younger generations at least), is immensely popular. Many have long looked with envy at Japan with its ubiquitous anime and pined for a similar scenario in western markets. Their prayers may have been answered, but the reality is far from expectations. Animation has become a commodity, and with that it has lost its special place in the minds of consumers and fans alike. The question is, what happens now, and where does the industry go from here?

Read more

Why The Intern Pandemic is Bad for The Animation Industry

Note: I simply use this to illustrate a typical animation-related internship. I do not mean to imply that Blue Sky enagages in dubious behaviour when it comes to their interns.

Via: Blue Sky Studios

The impetus for this post was on Cartoon Brew a few weeks ago, which in turn was inspired by a book, Intern Nation, that quoted another Cartoon Brew post from a good while before that. It concerns internships, a concept that a lot of college graduates are familiar with in the United States.

Interships have become prevalent throughout many industries, not just animation. On the surface, they offer benefits that parties on both sides can stand to gain from. The intern obviously gets observational experience to put on their resume, and the company gains time as the interns perform non-project-related tasks that would otherwise consume paid employees’ time.

That is in the ideal world, however and there are plenty of stories of interns who were coerced into working long hours, performing actual work and and often for extended periods of time (many months or more).

This post isn’t so much about abuses within intern programmes, rather it is an analysis of how the prevalence of interns within the industry could potentially hurt it in the long run.

The problem is that interns, whether they do productive work or not, contort the economic realities of the industry. If an intern is strictly an intern and simply makes tea or shuffles paper about, then their impact is limited to slivers of time that the company could only reap benefits from in the very long term, read: a year or longer.

Interns involved in production, on the other hand, can dramatically distort costs because as anyone whose taken a managerial accounting class will tell you, what counts as a ‘cost’ is entirely up to management.

Take for instance an animator’s base salary. It’s paid (traditionally) on a per foot basis, i.e. the more animation produced in a given timeframe the more the animator gets paid. Now, when you look at how much it ‘cost’ to produce that animation, most people would factor in the animator’s salary and any materials used. What a lot of people neglect to consider is overhead; things like building rent, heating/cooling, electricity, etc. that were all used in production but can not be directly applied to a particular production.

Where interns distort this when they work on a production is that they create the actual work, but they only account for the costs associated with the overhead and any materials used, they don’t get paid so that cost is not accrued by the studio.

Why does this matter?

Salaries are often the largest single cost category for employers.

If a production uses even two interns on the production, the cost of said production will be proportionately lower than if two animators were hired. Now you might say that this is an isolated case, and so what if it is. However, what if it’s extended to the entire industry? If every studio decided to hire even one or two employees less than necessary per production it doesn’t take a genius to conclude that we’re talking about a lot of people.

“But certain areas wouldn’t be viably able to produce animation without interns”

This may be true, but again, interns distort costs so much, that that is precisely why certain regions cannot produce animation, or rather, cannot appear to produce animation in a profitable manner.

When it comes to the cost of production, the use of interns will naturally result in a lower overall cost, but the problem is that the difference isn’t “saved” as studios might have you believe. Their fixed costs will remain the same whether they hire the additional persons or not because they have to be paid even if no animation is produced at all! The cost to employ an animator is considered a flexible cost that is applied to the production and would (and should)  be ultimately paid for by the client.

The ultimate result of utilising interns for production is that the supply/demand nature of the job market is also distorted. Anyone willing to perform work for free will displace someone who will only work for compensation. This drives the mean salary of animators lower as they are forced to work for less than they would otherwise have. The difference is, again, not “saved” by anyone, it ends up in the economy somehow, the problem is that, ethically, it is sufficiently suspect.

So the crux of the problem is that either the job market is too willing to accept unpaid labour or that the various clients out there are unwilling to pay the amount that they should for a given production.

My suspicion is that it’s a mixture of both, a vicious cycle if you will. With people willing to work for free, studios and networks can use the resulting lower costs to argue that such and such a production is only viable if interns are used. This is patently false.  The cost should be what it ought to be and the client could either take it or leave it. Extracting free labour benefits them in the short term, but harrangs the overall economy and industry in the long term.

 

 

What Everyone Ought To Know About Movie Promotion

A movie lobby card (an old form of promotion) via: Retrospace

Most people believe that the cost of a film is whatever the studio says it is. It might well be, but as I learned in my managerial accounting class, what counts towards that cost can  be hard to determine.

For example, what about the people processing the payroll for the set designers, does that count as a cost? The answer is no, it doesn’t because it is considered overhead, in other words, those people processing payroll would be doing it even if the film wasn’t being made.

How about the actors? Well clearly they are a large part of the cost of a film and if the project didn’t exist, they wouldn’t be paid. So, yes, they are a cost to the film.

What about promotion of a film?

You would figure that into the equation, right? I mean, if you make a movie, you have to sell it somehow, and you can’t turn a corner without seeing an advertisement for a film these days. Besides, if the film wasn’t made the cost wouldn’t be there, right? Yes, that’s right. So it would make sense to include the cost of promotion into the cost of a movie, wouldn’t it? Again, yes it would. Except herein lies one of the tricks of the movie business that the public at large is not familiar with or aware of.

For you see, promotion isn’t handled by the studio, it’s handled by the distributor. Never mind that they are usually one and the same (think Disney and Buena Vista), the fact is, for the vast majority of mainstream releases, the cost of promotion is handed off to the books of the distributor, for which they normally receive a 35% cut of the box office gross.

What is the effect of all this? To make costs appear lower of course! Most large movies have a promotional budget in the range of half to three times the film’s cost (how it makes sense to spend more promoting the film than it did to make it is beyond me). So basically, a $100 million movie could cost anywhere between $50 million and $300 million in promotion by the end of its theatrical run.

So when you hear about a film raking in more than it’s cost at the box office, that just covers the studio’s cost, not the promotion. The end result? Films appear much more successful than they really are. Huge box office grosses are often a facade that masks the real cost of a film.

The truth never hurts, and I believe that if studios were more upfront and honest about the cost of a film, i.e. acknowledging the promotion costs more clearly, then they would be in a better position to operate effectively. Sadly, in Hollywood, everyone wants their share of the pie, and will engage in shady tactics like those mentioned above to make themselves appear stronger than they really are. In the end though, the emperor isn’t wearing any clothes, and he always get’s called out in the end.