Has Passive Storytelling Reached the End of the Road?

Passive storytelling has been around since the dawn of time. It will likely continue to exist until the end of time too, as humans have exhibited the trait across generations and cultures without fail. Storytelling exists today in many forms, and it is in that sense that modern passive storytelling (where the audience merely listens or watches) may be reaching the end of its long dominance of the entertainment business.

Read more

Minimum Wage Artists & The Price of Work

Earlier this week, Noah Bradley published a piece concerning the astonishingly low wages that many artists endure. Although raising valid points, he neglects to address the multitude of factors that help create and sustain such a scenario.

Read more

Know Your Animation Tax Incentives!

Coming by way of a tweet from Cathal Gaffney is an overview of production incentives from around the world put together by Entertainment Partners. Since it focuses on every credit in most major jurisdictions and sub-jurisdictions, I thought it would be easier to tease out the ones pertaining specifcally to animation and comment on those instead,

Starting off in the US, there is Connecticut, whose credit was successful in attracting Blue Sky Studios to the state from its cormer home just next door in New York. While the credit has undoubtedly helped the studio establish a home and serve as a production base for some very successful studios, it has nonetheless served to sap some of the talent from nearby New York City. Nonetheless, it has so far allowed a major studio to remain in the north-east US, for now.

Australia has both federal and territorial credits with the former requiring an “Australianess Test”, something that is common in many countries offering credits (although not all apply to all productions). At the lower level, New South Wales and Queensland offer credits as well. Australia was the first destination for overseas animation production all the way back in the day when Hanna-Barbera among others started the practice in order to save costs. Today, Australia is still quite the contender in the animation scene with Happy Feet being the latest film touted on the Australian government’s quite comprehensive animation site. (No mention of Fern Gully though).

Moving on to the credits that American’s will be most familiar with, British Columbia offers, and has offered extensive credits for quite a while, and have been successful in establishing a “Hollywood North” in the state with the likes of Pixar among others being attracted to set up satellite operations there. Otherwise, home-grown outfits like Nerd Corps take advantage of the talent pool. British Columbia/Vancouver is often cited as the local industry that could stand to lose most should the credits dry up as it is relatively close to the epicenter of Los Angeles.

In contrast both Ontario and Quebec offer credits but appear to have a larger indigenous industry that can support production. Even then it isn’t immune to business failures (sorry, can’t find a link to the exact story) but successes have included the likes of Cake Animation and Atomic Cartoons.

Interestingly enough, France also offers an animation tax credit (up to EUR 4million) that will surely have been used by the likes of Illumination Entertainment as well as Bibo Films for their production, A Monster in Paris.

New Zealand also offers a credit but seems to limit it to shorts only. I suppose there is an obligatory shoutout to Mukpuddy who seem to have a lot of fun making animation down there 🙂

Then there is Taiwan, which has yet to stretch its animation muscles to the extent that Korea and Japan have in recent decades. The credit does seem to be quite generous, so it should not be surprising if we see more content coming from the island in the coming years.

Lastly, there is Ireland, which although is not explicitly outlined as having an animation credit, has nonetheless made the technique its own over the last 15 years. Plenty of studios have reaped its benefit (most obviously Cartoon Saloon with The Secret of Kells) but they have also been active producers of their own content as well; an absolutely essential aspect to tax credits if they are to be successful.

So there you go. There are plenty of places around the world where animation is being subsidised.

 

 

 

Let’s Talk Tax Credits

OK, taxes, boring I know, but it’s a pressing matter for animators in the UK. It’s also a topic that’s come up from time to time over here in the States, as places like next door neighbour Canada create incentives to get studios to move up north.

So the reason for this latest round of noise-making is that the British government is considering a tax break for “drama productions” that cost a certain minimum per hour of screen time. The thinking goes that with such a break, more productions will begin shooting in the UK thus contributing to the economy.

Animators contend that their industry would be more effective at keeping jobs in the country and, according to the Guardian article, would keep content on a more local level.

There’s nothing wrong with this, except that the reasoning is a bit flawed.

Basically, Ireland, the UK’s neighbour, offers tax incentives for animation production. The reasoning is is simple for this one: Ireland didn’t have an animation industry, so in order to get one jump-started, the government offered companies a tax break in return for taking the risk of setting up in a relatively unknown country (animation-wise).

The UK already has an established animation industry. It doesn’t need to effectively subsidies companies’ risk in setting up production there.

So what’s the real issue here?

Well, why set up shop in the UK, when you can go next door to Ireland, write off some taxes and get you series done for less. Right?

Will tax incentives in the UK change this scenario?

The answer is maybe.

Tax incentives will bring the cost of production in the UK down, but that is not a guarantee that productions will move there. It also creates another problem in that it hides the real issue: costs.

Naturally with their tax incentive, Ireland can operate on a lower cost basis, but, can you continue to operate on an incentive-based structure forever?

NO!

Incentives are meant to be temporary, or rather, short term. Long term reliance on tax-breaks and incentives can defeat the purpose. For example, let’s say you introduce a tax break for animation. After a while, another country introduces a tax break that brings their costs below yours. Now what do you do? Another tax break? Suffer the consequences? Give up?

Tax incentives mask the real cost of doing business. Yes, taxes may be higher here or there, but at the end of the day, they should be factored into the cost of doing business in the first place. Exchange rates will also factor into the equation, and depending on where you go, they may have a bigger bearing on costs than taxes.

If costs are your problem, then perhaps it is wiser to try and bring them down first, no? By doing so you will increase your competitiveness and not have to worry about it running out.

Besides, if you operate as a low-cost producer, you will always have to be the low-cost producer. Ireland has shown that they can move beyond low-cost with through their superb, home-grown content. Britain has a great track record in creating content. Perhaps they need to rediscover that talent.

What do you think? IS the UK really in need of a tax credit, or should it try other things first?

 

The State of Irish Animation in 2012

First of all, a Happy St. Patrick’s Day to you all. Remember, Guinness is Irish; corned beef and cabbage is not.

Irish animation has been on a roll the last few years as the combination of a strong talent pool. entrepreneurs willing to take a risk, continuous production demand, excellent products and a little help from the government in the form of tax incentives has made the country a very favourable one to do business in. In other words, the hard work continues to pay off.

Production now extends across the entire content landscape, from shorts through TV all the way to feature films. This growth has caused the industry to continue its expansions and growth at a time when the Irish economy as a whole has been struggling (to put it lightly).

No one studio seems to have eked out a significant lead as the larger ones have managed to succeed by going in different directions. Kilkenny-based Cartoon Saloon hit it right out of the park a few years ago with The Secret of Kells. As of 2012, development continues on their much-anticipated next feature, Song of the Sea.

Brown Bag Films has cemented their position as the studio to watch on the international stage. Besides announcing the sale of their first original series, Happy Hugglemonsters, they’ve also maintained their production series The Octonauts. Now employing over 100 people, Brown Bag have seem poised to continue their growth for the coming year.

Besides these two well-known outfits, other studios such as Jam Media, Kavaleer Productions (which recently celebrated 10 years in business), Boulder Media (currently winning accolades for their work on the Amazing World of Gumball), Telegael, Monster Animation and Caboom all continue to propel the industry to worldwide attention and admiration.

Noted newcomers this year include Giant Creative which has marked themselves out as a crowd to keep an eye on over the coming years.

Perhaps the largest sign that Ireland is making waves in the animated seas is the fact that this year’s Annecy festival will have a central focus on the country and what it can offer. Big things are expected to be announced come June.

Overall, the outlook for Irish animation is extremely positive for 2012 and beyond. Here’s hoping next year’s post will have even more good things to say.

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.

 

 

Four Signs We’re Possibly in an Animation Bubble Right Now

I’ll be honest, this post was not used as an excuse to post a picture of Bubbles.

Over the past number of years, we’ve slowly seen animation come in from the cold as it were. Yes, Disney has had critical and commercial successes for years, but only within the last 10-15 has anyone else actually stood up and taken notice at just how profitable an animated film is. Not only does it rake in the dollars at the box office, they also tend to have some very long legs. Just look at the Lion King, 17 years old and still going strong.

Which leads to today’s post. With the obvious success of the technique, are we in the midst of an economic bubble in terms of animation? I mean, there is a difference between strong economic growth and unsustainable expansion. The question is are we in one or the other. Here’s 4 reasons for the latter point of view.

1. Revenues aren’t rising as fast as costs

Revenues for animated features have been rising at a relatively steady rate, but they have not risen at the same rate as costs. Naturally this is partly to do with the greater use of technology than in the past. CGI isn’t as cheap to implement as traditional animation, which could be shipped off to Asia for the real labour-intensive work. CGI on the other hand requires a very large upfront investment followed by the costs of the labour to utilise it.

Revenues are not rising at the same rate and the result is squeeze somewhere along the production line that will eventually reach a crunch point.

2. The Number of Players in the Market is Rapidly Growing

It’s elementary economics that once someone discovers a way to make money, at least one other person will attempt to emulate their success. Animation is no different. Today, there are no less than 4 large players (Disney, DreamWorks, Sony, Illumination) in the market and more are being added all the time.

When this becomes a bubble is when you see players who attempt to over-extend themselves into the market. We’re seeing this right now with various one-man bands and VFX studios that have figured they can have a go too. Of course, this is nothing new and has been happening since day dot. The difference is that the rate at which we’re seeing new entrants has substantially increased over the last couple of years. This leads us nicely to….

3. Competition is Becoming Intense

With more players in the market, this leads to increased competition in just about all aspects of the business, from artists, to technology to studio space to release windows. More competition is always welcome as it keeps everyone on their toes and ensures a more efficient use of resources. the only downside is that it also tends to weed out the smaller or inefficient guys.

Why would more competition signal a developing bubble? Well, with an increased demand and scarcer resources, costs for those resources tend to rise. Since competition is increasing at a faster rate than the market is growing, that is indicative of a bubble.

4. The Market is Limited And Changing To Boot

Right now, the market in North America is limited. The market is mature and it’s not getting bigger in the grand scheme of things. The growth markets right now are in Eastern Europe and Asia. the only problem is that those markets tend to have quite distinct cultures, and as a result, aren’t as open to Western films as the rest of the world.

Negating the fact that DreamWorks recently announced that they’re building a studio in China to capitalise on the local market, it’s clear that Western studios face a market with increased competition but not an larger space in which to grow. The result is that we’ll either see reduced revenues or studios being forced to reduce costs. Mark my words, $300 million movies are not sustainable in the long run, at least not right now.

Coupled to this, the changes in the market in general, thanks to the internet, mean that the industry as we know it may be vastly different in a few years time. The rise of streaming, the decline of traditional TV, and the new revenue streams that go along with them means that studios will have to adopt a different tune. Whether they are proactive or not in this regard will surely determine whether we’ll see the bubble burst.

People I Respect: The Irish Guys

This is the second in a series of posts in which I explain why I respect certain people in the animation industry and why you should do the same.

Paul Young and Tomm Moore Via: IMDB

Cathal Gaffney and Darragh O’Connell Via: Brown Bag Films

Yup, I’m shoehorning four lads into this post, but with good reason, for without them, the Irish animation scene would look quite different than it does today.

The name Cathal Gaffney may not ring much of a bell with you but he is someone I have a lot of respect for. Together with Darragh O’Connell, Cathal founded Brown Bag Films, based in Dublin and has had tremendous success over the last 14 years including not one but two Academy Award nominations. Both men have worked hard to promote the indigenous industry within Ireland as one that has a lot of potential for long-lasting prosperity.

Tomm Moore and Paul Young started Cartoon Saloon in Kilkenny back in 1999 and since then, they too have found tremendous success with the crowning achievement being the Academy Award nomination for their feature, The Secret of Kells, which itself was a remarkable achievement considering that it was only shown in one cinema prior to nomination!

Why do I respect these four guys? For one, they helped start animation studios in Ireland when the industry was next to non-existent and have grown them into internationally-recognised companies that work with such large global players as Nickelodeon/Viacom and Disney.

Even more admirably, all four have managed to grow businesses at a time when Ireland has seen one of the worst recessions in the Eurozone, which is no mean feat! All four are also as ambassadors for Irish animation around the world and is continually promoting the industry at home and abroad.

For this and more, Cathal Gaffney and Darragh O’Connell, Tomm Moore and Paul Young are four guys I respect.

People I Respect: Hayao Miyazaki

This is the second in a series of posts in which I explain why I respect certain people in the animation industry and why you should do the same.

Hayao Miyazaki imageDo you really need me to explain why I respect the greatest animation director alive today?

How about a long and varied history of making animated films of the best quality? How about being the single biggest force in helping anime films attain popularity in the US? (Yeah, Akira helped too but Hayao’s films appeal to everyone).

Hayao Miyazaki’s output at Studio Ghibli has mesmerized the world for over 25 years and shows no sign of stopping. That is not why I respect the man though.

No, I respect him for his devotion to animation as a storytelling medium. Much more than that is his devotion to traditional animation as a storytelling medium. In an age when the computer has conquered production, he remains lovingly committed to the paper and pencil.

Besides that, Miyazaki’s films remain fascinating studies in character. Yes, the animation is superb, but that is always a sideshow to the characters and their story, on whose level we always see the film.

Hayao Miyazki is more than worthy to be included on the list of people I respect.

People I Respect: Jeffrey Katzenberg

This is the first in a series of posts in which I explain why I respect certain people in the animation industry and why you should do the same.

Via: Talking Movies (click through for a great interview by Fergal Casey)

Love him or hate him, you cannot deny the fact that even thinking about American, theatrical, animation from the last 30 years will bring his name to mind.

While it can be said that Jeffrey Katzenberg is a bit of a bully, such a description could also be used for Walt Disney. Both men are/were not afraid to provoke strong emotions from their staff if he thought it would get the best from them.

Katzenberg’s influence over the Disney animation unit from the mid-1980s through the mid-1990s is stupendous. The period, colloquially called the ‘Waking Sleeping Beauty’ period saw a resurgence of the theatrical animated film after hitting rock bottom in the 1970s.

Why do I respect him? He’s focused, he knows what he wants and he is good at getting people to create his vision. Too often we see a film that was created with a vision in the mind of the director but who clearly could not communicate that to his crew.

Katzenberg can pick out good stories not just ideas. Look at the Disney renaissance films, no two are alike. They shoot off in all directions and hit a bullseye every time. John Lasseter and the guys at Pixar were clearly paying attention as they followed a similar path until the late-2000s.

Since leaving Disney, he has moulded DreamWorks Animation into a formidable competitor to Pixar. While the films are slightly less polished compared to the Apple guys in Emeryville, they are undoubtedly successful and last year’s How To Train Your Dragon was a sure sign that Katzenberg is narrowing the gap with the industry leader.

For his track record, his ability to inspire and his ability to manage artists on a par with Walt Disney, Jeffrey Katzenberg is someone I respect in the animation industry. His placing in the list reflects his penchant for [multiple] sequels.

What Makes Film Festivals Cool

Via: Azrael’s Merryland

This coming Wednesday sees the start of arguably the most important festivals for animation lovers in North America. Every year, Chris Robinson and Co. put together the Ottawa International Animation Festival and if you’ve ever read The Animation Pimp (either online or by the book) you’ll have an idea of how much effort goes into making everything run like clockwork.

There are tons of reasons why festivals such as Ottawa are such fun to attend. For starters, you are exposed to lots of new and interesting films that you’ll probably never see down in your local cinema. If you’re artistically inclined, that may pay off handsomely in the form of inspiration. If you can’t draw a straight line, well, you saw some really neat films that will hopefully inspire you in other ways.

Besides the actual content, festivals offer a rare opportunity for animation professionals to socialise. Now I am aware that animators do socialise outside of festivals (for some reason I always seem to meet them at a pub) but never en masse. While this can certainly have its disadvantages, it is safe to say that the ability to meet a wide range of friends, both old and new, far outweigh the brevity of the event.

Meeting fellow animators is enjoyable in itself and I’d be lying if I said that it was all purely for fun. The animation industry (especially outside of Burbank) is heavily reliant on word of mouth. In other words, its more who you know than what you know. Although this may seem frustrating at times, its only as difficult as you make it for yourself. Festivals are a great opportunity to go out and meet some other professionals. Heck, its the same for any industry, plumbers seem to have conventions all the time. Why? So they can build relationships in an industry where a lot of guys work independently.

Larger festivals such as Ottawa (and Annecy in France) may also have a studio presence. This development in recent years is beneficial to both camps. Animators want a job and studios want to find good talent. Putting the two in the same place is a match made in heaven. However, you should not discount smaller ones, such as the ASIFA-East festival simply because a major studio is not present.

So far, I’ve never heard anyone say they went to a festival and had a horrible time. They’ve often been tired, hungover, sick or incapacitated in some way, but they have never said they regretted going. Plenty of people (myself included) regret not going for all the reasons above and more.

If you don’t attend, you can make up all the excuses you want, but at the end of the day, the buck stops with you. Festivals are guaranteed to bring rewards and can often accelerate your progression up the career ladder, if you play your cards right. With that in mind, you don’t have much to lose now, do you?