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Animation Operations and Supply Chain Management

Apologies for the profoundly boring title. Knock off the ‘animation’ at the front and you pretty much have the class I’m taking right now. It’s basically about operation decision-making within a company and how to manage the supply chain of a business (don’t get too excited, it’s an entry level course).

Therese Trujillo and Eric Robles of the Frederator/Nickelodeon Production fanboy & ChumChum with the show's schedule behind them.

It got me thinking though, when it comes to animation, the supply chain is somewhat flexible yet inflexible at the same time. It’s flexible in that if you have a bunch of great artists who can crack on with the job and churn out exactly what you’re looking for, then you might be able to squeeze things a wee bit and wrap up early. If you run into delays, that sends a shockwave down the rest of the production pipeline.

Right now, we’re looking at shoes and how they are ordered months in advance of the season for which they are intended. Not too different from animation, eh? The interesting thing about the three cases we’re looking at (Crocs, ECCO and New Balance) is that all three take quite a different approach to their manufacturing and supply chain (outsourced but flexible, vertically integrated and some outsourcing but some manufacturing in the US).

Perhaps surprisingly, animation, really has developed supply chain-wise since the hayday of Hollywood. Things have changed dramatically since then, what with the off-shoring of the actual animation in the 70s and all, but we have gradually seen a return to the rather flexible nature of doing everything in-house.

The introduction of Flash certainly helped as it made animating in the US cost-comparable. Secondly, the internet has meant that the cost benefits of off-shoring or outsourcing can be had without sacrificing the immediacy of working in a studio. Daily production can be supervised closely from the other side of the planet without much effort.

My point is that while the animation industry has not seen the kind of seismic changes (such as off-shoring) in quite a few years, there have nonetheless been advances in how animated films and TV shows are created. Increased efficiencies in this area have only lead to better quality content and lowered (relative) production costs. Just something to keep in mind.

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An Open Letter To Mr. Tom Lowe

Not that I want to keep coming back to the same topic, but waaaay down in the comments for Amid’s recent post on Cartoon Brew about making money from your short film, are some responses from a Mr. Tom Lowe who would seem to be involved in Bob Gofrey’s official website.

In case you’re curious, here are his comments:

Each video on YouTube had around 4000 hits, and there were around 5 videos up, so around 20,000 hits in total. Not much by YouTube terms.

We are looking in to DVD-to-download options, as the inital cost of DVD mastering would be way too much at the moment.

As for the films initially being free, can I ask where you got that information from, or have you just made it up?

As for free and extra content, we have an interview with Bob talking about Henry 9 ’til 5 which is free before the paywall for the film. More films will include these interviews with Bob, for free.

As for an iPad app, I’m not going with a closed-system run by Apple. As for services like Netflix or LoveFilm, they only deal with distributors, finding one of those isn’t something I have any inclination to do, as we would lose control and certain rights. It may generate more revenue, but it’s simply not an option for us.

As for a better designed site, we’re working on it. We are trying to perfect it and make it as user friendly as possible, so please keep comments coming, we are listening.

In the mean time, if you do want to use the site, we offer weekly subscriptions from £2.99 (around $5) a week.

And here’s his response to a few other comments which pointed out where you could still watch the shorts online.

Here’s his final comment after all of the above:

Amid, I must say it’s a shame that you want to rubish our Pay-per-view site and break copyright law, rather than contact us, talk to us about it and maybe come to some agreement about giving your readers a discount, maybe even giving you a percentage. This would be far more constructive for everyone involved.

With all that fresh in your mind, may I present my open letter to Mr. Tom Lowe:

Dear Mr. Lowe,

The career and legend of Bob Godfrey as an animator will never be forgotten, as long as people such as myself are alive who have fond memories of growing up on some of his greatest works (I have an affinity for Roobarb myself). His many short films and the numerous nominations he received for them solidify his place in animation history without a doubt. What I am concerned about, is that his legacy is at risk in this new, digitally connected age.

The frontier that is the internet has been drastically altering the entertainment landscape for some time now with no end in sight to the revolution we are currently going through. It has been tough on many aspects of the film and TV businesses as they have struggled to try and find their place in the new landscape. You are not alone in your attempts to preserve the legacy of Bob Godfrey for all to enjoy.

You face a considerable challenge in this regard, and I admire you for making the effort necessary to bring Bob’s films to the attention of people who may not be familiar with his works. Naturally it is desirable to do so in a profitable manner that is sustainable, yes? After all, no-one could they be expected to incur the considerable costs of providing streaming content by themselves, I know I sure wouldn’t.

However, your comments as posted to the recent Cartoon Brew posts are somewhat disheartening, especially so when considered in light of your comment on Amid’s post back in 2010 where he revealed that the shorts were online. There is a great air of optimism about it! You seem excited that fans are enjoying the YouTube channel and its videos. The comments above are such a turnaround from then, yes?

Four thousand hits on YouTube is actually pretty decent, considering the videos were only up for a couple of months. Great films such as those are lucky in that they are not constrained by the need to feel ‘new’ or ‘hip’. They are timeless and as a result, could remain on YouTube for many years without ever going stale. Twenty thousand hits overall may not be much by YouTube standards, but there are millions of videos on that site that have maybe hundreds of hits, and there are plenty with none at all!

You also mention providing free content and use the documentary as an example. While this is “extra” of the films themselves, it regrettably does not provide someone who has not seen Bob’s films with a big enough incentive to pay for them. Think about it. If the latest Harry Potter film came out and instead of a trailer, they posted a documentary about the actors instead, would half as many people want to go see the film? I doubt it very much.

People (in the US in particular) have become accustomed to most things available online having no direct cost to them. That is how things have played out over the last 15 years or so and once people know they can get stuff for free, the become extremely reluctant to being paying for it. While your plan to charge £2.99 (or $5) a week is commendable, it absolutely pales in comparison to the tens of thousands of hours of content I can view on Netflix for $8 a month. The problem is not so much how much you charge, but how little substitute services like Netflix charge in comparison. You are not so much competing for my wallet as for a combination of time and choice.

You are in a strong position, Tom. There are plenty of other avenues to pursue besides charging people to watch the films. I’m sure there are many items that could be sold instead. How about limited edition drawings, sketchings, posters, etc? Sure physical objects like these cost more, but they make more per sale too. Besides that people sometimes buy more than one. I’m sure you can figure something out, in the meantime, why not help spread the word about  Bob’s films? Cartoon Brew has already done so and introduced many more people who would otherwise not have known about Bob or his amazing films. Even this letter, which I am posting to my blog, will introduce my readers to a legendary animator who they not have known about.

Lastly, it is important to be acutely aware of the distinction between copyright and theft. If sharing copyrighted materials was theft, it would already be covered by the many laws already in place that cover physical property. Copyrighted materials do not come under such laws and in legal circles they take pains to avoid confusion. Unauthorized reproduction of copyrighted materials is considered infringement for this very reason.

Surely it would be much better view people who want to see Bob’s films as fans, yes? And if they want to view the films, why not let YouTube take care of the cost of hosting and streaming them? They’re willing to do it for free, why should you take on the burden and cost of doing so? Let YouTube carry take the risk!

I sincerely hope that you find a way to keep Bob’s shorts online in a way that caters to his fan’s needs and helps attracts new people to Bob’s timeless films.

Sincerely

Charles Kenny

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Cartoon Brew On Monetizing Your Content

Amid over at Cartoon Brew has an insightful piece on English animator Bob Godfrey and the attempts being made to make money from his works. It plays almost exactly into my post from earlier this week on the same topic.

Amid raises some important points and theories but it is in the comments that things get interesting. The post is well worth taking the time to check out.

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The Only Surefire Way To Make Money From Your Film In The Internet Age

With the rise of the internet, the media and entertainment landscapes have been irrevocably changed. Gone are the days when getting people to see your film meant cajoling your friends down to the local cinema where your short was being screened. Today, thanks to the internet, you can throw something up on YouTube and get a million hits within an hour (if you’re really lucky, in which case, you should play the Lotto as well).

Such a scenario is great for a lot of people, certainly the viewers, but if you were to listen to the likes of the MPAA, the sky was falling down. “We’re losing money” they cry, as they trip over themselves trying to figure out ways to make money off the internet.

When it comes to animation, making money has always been a little bit trickier than live-action. For one, you can’t have your actors show up at a party and have them start gushing to everyone they meet about what a great film you made and why everyone should go and see it. Nope, you can’t do that with animated characters.

So let’s assume that your film is on the internet and people can watch it for free on YouTube. How can you earn money from it? The answer is surprisingly simple.

Know the difference between what is scare and what is not. People will pay for scarce things, but not for something (or a substitute product) they can get for free relatively easily.

Having your film online is not making it scarce, in fact, it’s making it about as plentiful as you can get. Even if you took it down, it would continue to live on for years, decades even in cyberspace.

There’s a good chance that you’ll  have to figure out what it is about your film that is ‘scarce’. Is it the physical drawings used in the film? It might well be. Bill Plympton draws everything on paper and if you were at MoCCA this past weekend, you could have bought one from his latest short, The Cow Who Wanted to Be A Hamburger.

Physical objects relating to a film will always be scarce as they are harder to duplicate and there is often a limited supply out there. That’s why you see cels from the likes of The Little Mermaid selling for $1,200 or more. There’s only one of that particular cel out there and that’s how much people are willing to pay for it.

If selling the original art doesn’t appeal to you, you can always create some more! If you decide to sell, say, a DVD, why not throw in a quick sketch, like Tomm Moore did with The Secret of Kells. If you go the T-Shirt route, why not sign your name on it or something like that. Consumers love something that appears to be unique, that they have the only one or one of the few of in the world.

I know I keep coming back to the idea of scarcity, but that really is the secret to making money from your film. If you figure out what is in limited, supply about it, then you are in a position to start making money from it.

 

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Is Animation Really Killing the Movie Business?

Exhibit A, this quote from an article by Mark Harris in GQ Magazine (I profusely apologise, I would never consider linking  to, much less blogging about, an article from such a rag unless it is under exceptional  circumstances similar to this one) which came my way via Marco Arment.

As recently as 1993, three kid-oriented genres—animated movies, movies based on comic books, and movies based on children’s books—represented a relatively small percentage of the overall film marketplace; that year they grossed about $400 million combined (thanks mostly to Mrs. Doubtfire) and owned just a single spot in the year’s top ten. In 2010, those same three genres took in more than $3 billion and by December represented eight of the year’s top nine grossers.

Let me posit something: That’s bad. We can all acknowledge that the world of American movies is an infinitely richer place because of Pixar and that the very best comic-book movies, from Iron Man to The Dark Knight, are pretty terrific, but the degree to which children’s genres have colonized the entire movie industry goes beyond overkill. More often than not, these collectively infantilizing movies are breeding an audience—not to mention a generation of future filmmakers and studio executives—who will grow up believing that movies aimed at adults should be considered a peculiar and antique art. Like books. Or plays.

Where to start? If you have read the rest of the article, you will know that is a passionate lament about the slide of the quality of Hollywood films over the last 40 years or so. He talks about the seismic shift towards more family friendly films and how they are strangling the mature films that he decries as a rare find today.

In my (admittedly) hard-headed Irish opinion, it’s a complete load of bullshit that smacks of both desperation and a complete misunderstanding of the facts. He focuses solely on content and uses that as a crutch for why films made for adults are becoming more and more scarce. Harris bemoans the fact that R rated films have to be made on a relatively small budget. He goes so far as to say:

The economic pressures the studios are facing aren’t just an excuse—they’re real. Movie-ticket sales may be reasonably strong, but any number of economic forces are conspiring against the production of adult dramas. They don’t generally have the kind of repeat-viewing appeal that would make them DVD smashes. They often end up with an R rating, which puts a ceiling on their earning capacity and makes a modest budget absolutely essential. Oscar nominations or even wins can no longer be relied upon to goose a quality film’s revenues.

The kicker to the entire article is that it seems like one big advertisement for Hollywood, in particular the large studios.

Studios make movies for people who go to the movies, and the fact is, we don’t go anymore

Duh, no shit sherlock. It costs a fortune to do that and the films are generally not that great. Besides, I can’t watch the film in my underwear or drink beer at the cinema, which I can at home (not that I actually do, but it’s nice to have the option).

Harris completely (and I mean utterly) misses the point, which is that animated films have become successful over the last number of years because they’re great films, and their suitable for all ages too!

He fails to mention the seismic shift in cinema over the last number of years, namely the rise of the internet and the total failure of Hollywood studios to adapt a new business model. They keep spending tons of money suing fans that completely pisses them off and make life difficult for them to enjoy what they love.

Harris’ position is that because animated films are successful at the box office, they will eventually push out “real”  films that are ultimately less profitable to make because they are appropriate for a smaller audience. As any business student can tell you, that’s basic economics. If a film is suitable for a larger audience, it will of course, make more money. That is a simple fact that has been true since the dawn of time. The only difference is now there are many more animated and family-friendly films being made than in the past. A fact that zooms straight over Harris’ head.

Overall, this article was not worth blogging about because I have only served to call attention to it and the nonsense contained within. The only reason I do so is because it is featured in GQ magazine, one that I can only presume people other than myself read and respect. As a result, I cannot allow such readers to believe that what the article says is the truth.

Animation is an artform for filmmaking. It does not purport to usurp the crown of the classic American dramatic film. It is also not guilty of ‘gaming the system’. many have tried that game and failed miserably. Hollywood as an industry is in a time of great upheaval and those who do not adapt are getting left behind. it is these tragglers that Mark Harris is lamenting, because there continues to be plenty of fantastic, dramatic films being made outside the system, and their often much better for it. This includes animation, the supposed slayer of the industry.

So don’t blame animation and children’s films for the demise of Hollywood, it’s their own damned fault.

 

The economic pressures the studios are facing aren’t just an excuse—they’re real. Movie-ticket sales may be reasonably strong, but any number of economic forces are conspiring against the production of adult dramas. They don’t generally have the kind of repeat-viewing appeal that would make them DVD smashes. They often end up with an R rating, which puts a ceiling on their earning capacity and makes a modest budget absolutely essential. Oscar nominations or even wins can no longer be relied upon to goose a quality film’s revenues.

The economic pressures the studios are facing aren’t just an excuse—they’re real. Movie-ticket sales may be reasonably strong, but any number of economic forces are conspiring against the production of adult dramas. They don’t generally have the kind of repeat-viewing appeal that would make them DVD smashes. They often end up with an R rating, which puts a ceiling on their earning capacity and makes a modest budget absolutely essential. Oscar nominations or even wins can no longer be relied upon to goose a quality film’s revenues.

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How the Internet has Improved Access to Animation

Animation is not the only artform to benefit from the best invention ever, in fact, all forms of audio-visual entertainment have benefited from it. What has brought this to my attention was the Chapter 11 filing of Blockbuster Video (click through to see the headline of the Chicago Sun Times that I can only hope was known to be satirical before it was published).

The store near us closed a couple of months ago, and I dutifully paid them a visit to see what I could salvage. I found an Irish film, the Teen Titans movie, Spirited Away and Beavis & Butthead Do America (ah , my teenage years). There was also some even more random items that I passed up on, namely some older children’s stuff and a couple of volumes of Sailor Moon.

The main reason I passed them up (besides not being interested) was that I couldn’t justify the cost nor the loss of space on my shelf. I suppose I subconsciously realized that if I really wanted, I could find them again through other means.

The growth of Netflix and Hulu has meant that for animation fans, finding older or more alternative TV shows and films is not near as difficult as it used to be. In times gone past you had to visit the Goodwill stores and car boot sales (also known as flea markets) to find them. For the slightly sketchy stuff, you might need to visit a speciality shop, or know a place with some items under the counter.

The greatest asset to all of this has, of course, been YouTube. Just on a casual search from memory, I found Astronomeus (a Felix the Cat short) from 1929, Saturday morning cartoon from the 80s Galaxy High (with character designs by John K.) and an obscure English film animated in Poland during the Cold War.

The downside to all of this is that the vast majority of stuff posted on YouTube is illegal against copyright, so there is a good chance that if you’re reading this post in a couple of months those links will be broken. Happily, folks are always re-posting things so it should just be matter of searching a bit harder or by trying another video site.

What’s the upside, well for one if people are looking for this stuff it indicates that a demand does exist. What’s even better is that said demand can be satisfied relatively easily and cheaply by using the Internet in the same way that the pirates loyal fans have done. Older, more obscure content should not be left to rot away in the archives. It would be much better to digitize them and allow anyone to view them. Despite what the detractors say, it is always possible to use free content to turn a profit.

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What Does the Google/Verizon Deal Mean for Animators?

There’s been a lot of hoopla on the internet over the last couple of days in regards to the announcement that Google & Verizon have joined together with the aim of constructing a framework that would help legislators create a new set of regulations governing the internet and the content served on it.

Basically up until now, all traffic has been treated as equal no matter what. That means that a text file is given the same priority as a video stream. In years gone past, this was not a problem, mainly because there was more text files than video. However, with the advent of YouTube, Hulue and netflix et al, there is concern that things will not be quite as equal as they were.

The reason? Well, there is a perception out there that the pipe owners (Verizon, Comcast, etc.) will begin accepting payments by content providers (YouTube, Hollywood studios, your local TV station) in return for allowing their content to flow faster through the pipes. The idea being that if you want higher quality entertainment, you will have to pay for it (because  the content providers will only pass the costs onto you).

When you think about it, that is not much different to now. If I want to see Mad Men or whatever the latest hit is, I have to pay for cable. The problem with the idea is that it favours certain players over others. Witness Comcast’s purchase of half of NBC-Universal. Can you take a guess who would get top priority on the Comcast network if bandwidth space became an issue?

That’s not particularly fair. It may hurt the larger players, but it will absolutely crucify individuals. Imagine if you’re an animator/filmmaker, and on your website you have a page with your demo reel on it. How well do you think the video will play unless you cough up a fee to the ISP to ensure that you’re viewers see it at full quality? Are you gonna pay a fee like that? I doubt it. I wouldn’t, and the truth is, I probably wouldn’t sit around to wait for your video to load if you didn’t either. Who loses out? Everyone.

The internet is proof positive that when there is minimal regulation in an area, business thrive. YouTube would not have even got off the drawing board if the founders had to pay a surcharge on the delivery of their videos. Time and time again, we have seen that consumers have realized that the only commodity that the internet costs them is time. Money doesn’t even factor into it ever since AOL went to a flat monthly fee.

Besides, they way things work now is pretty OK. If I want my videos to load faster, I’ll cough up an extra $10 a month to Verizon to bump up the speed cap on my DSL line.

The biggest problem is perhaps the assertion that the “mobile internet” is separate from the fixed one. This is complete nonsense. Granted, there is only a limited amount of the wavelength spectrum available, but that does not mean that mobile users should have to settle for a different standard. Heck, if you wait much longer, Wi-Fi should be near ubiquitous in cities across the country. Why should I pay a data plan to the mobile carrier when I can find an free hotspot?

Again, this only hurts the small folks, i.e. you and me. If it will become hard enough to watch video on the regular internet, how hard do you think it’ll become on the mobile one, which by the way, is just the regular one on a smaller screen?

Animators and studios (big and small alike) need an open internet now more then ever. Why should either the ISPs or Google dictate how they can and cannot run their businesses? Charge them for the connection, charge them for the extra, scarce services that they decide they need, but don’t run rampant over the top of them in the scramble for profits. In the end, everyone gets hurt.

[sigh] You’d expect that a free-market economy like this would operate a little differently wouldn’t you?

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