State of the Animation Industry and the Wider Economy

Animation employment is now higher than it was on the right side of the chart ...

The last few weeks, I've gotten questions about ...

1) The Animation Business

2) The Economy (i.e. "Acch! My 401(k) is Tanking!" and "Should I go buy a house now?")

3) The Future of the Business

Here are my answers ...

1) The Biz: Overall it's up. DreamWorks has a lot of new hires, Disney Animation Studios has a sizable staff sprinting to the end of Bolt, and a burgeoning group is well into work on all aspects of Princess and the Frog. (And yes, there will be a bunch of layoffs when Bolt wraps up in September.)

In teevee, while Cartoon Network, Warners Animation and Disney TVA are far below previous staffing highs, Fox Animation has got most of its artists for Family Guy and American Dad back to work, and crew is slowly ramping up for the thirteen new episodes of The Cleveland Show, the FG spinoff.

So, total employment numbers are good, even though there are weak sectors inside the larger total.

2) The Economy. Many complain about putting money into their 401(k) accounts and watching their investments shrink. Sadly, shrinkage is the normal deal when the stock market is sliding downhill. But that's sort of a good thing when you're in your twenties, thirties or forties with twenty-five or thirty work years ahead of you, because you're buying stocks at a discount thanks to a slumping market. (I think the market will go right on slumping for the next year or three, but understand I'm a certified amateur prognosticator.)

Of course, almost nobody looks at a down market that way. They see the numbers going south and freak, pull their money out of stocks and put them into bonds and stable investment accounts, and are inconveniently off the equities (stock) escalator when it moves up again.

And last week I got a call from an artist who wanted to pull his money out of his 401(k) accounts to buy a house. I told him I thought it might be a good idea to wait a while. Here's why:

The Big Picture points out, as does various commentators, that real estate sales and prices continue to decline year over year and the financial and lending crisis is a long way from over. In Burbank, housing prices have dropped 25-30%, and in outlying areas like San Bernadino and Lancaster the bottom has dropped out.

And it's not over yet, so put off buying the new mansion. Which leads to

3) The future of the Biz. Like, how does the economic downturn impact us? What happens if there's a deep recession that goes on for a couple of years?

For animation, not much. I've ridden through two recessions while in the business, and the macro economy isn't the driver for cartoon studios hiring or cartoon studios not hiring.

The tide that lifts our boat or drops it is the entertainment marketplace. When the economy was sagging in 1991-1992, the L.A. animation industry was in the midst of the biggest boom it had ever seen. Animated features were roaring, and television cartoons were being created hand over fist. Employment was skyrocketing.

Why? Does BeautyandtheBeastDuckTalesAladdin PinkyandtheBrainAnimaniacsTheSimpsonsLionKing mean anything to you? Thought they might. If the conglomerates see big bucks being minted with animated product, the congloms make more of it.

And conversely. Just now, the Disney Channel is enamored with live action shows because they're doing gangbusters, and other big companies are imitating them slavishly. But these things are cyclical. Animated teevee will come back because it's cheaper than scripted live action and sells lots of DVDs, even as the video market declines.

There are, after all, lots of cable networks, and all of them are hungry for product. Animation is a relatively cost-efficient way to fill time slots, and animation sells well in ancillary markets.

So. If history is prologue, animation will do fine for the foreseeable future. Regardless of what the economy is doing.

'Toon Employment Distribution: