Wednesday, July 02, 2014

Sequels, Super-heroes and Animation

From a fine trade-paper type website:

... Nomura analyst Anthony DiClemente says we’re going to see a lot more of [sequels, super-hero and animated movies] — and that’s a good thing for studios. He raised his stock forecasts for Disney, Fox, and Time Warner this morning, arguing that their efforts to appeal to overseas audiences should enable them to profit as international box office receipts grow an average of 5.5% a year to $57.6B in 2022.

Disney, Fox, and Time Warner have “increasingly shifted film production towards genres that resonate well within these markets,” he says. Sequels accounted for 76 of the 107 top grossing films in the 10 largest markets over the last 12 years. The hot genres also tend to be the most profitable: The average animated film from 2004 to 2013 generated a gross margin of 52%, followed by action with 40% — well ahead of drama at 30% and comedy at 22%. ...

So now you know why there's a been steady growth in the animated segment of theatrical features. It happens to be where the biggest profits are.

This isn't a new phenomenon; since the coming of CG animation, broad-based profitability for long-form cartoons has been the norm. Pixar, DreamWorks Animation, Blue Sky Animation and (more recently) Disney, Warner Bros. and Illumination Etnertainment have struck gold making computer-generated animated movies. Contrast this to the 1990s, when a bunch of entertainment conglomerates leapt into the animation biz in an earnest effort to recreate the success of Beauty and the Beast, Aladdin and Lion King.

Twenty-plus years ago, every studio other than Disney flamed out spectacularly with the cartoon features they produced at great expense. Once Upon a Forest, Page-Master, Quest For Camelot and Cats Don't Dance failed to ignite at the box office, and by the late nineties the feature studios trying to replicate Disney's cartoon triumphs had been shuttered.

But now here we are in 2014, and CG cartoons are where the movers and shakers of Hollywood want to be. 52% gross margins do tend to make studio executives budding Walt Disneys, don't they?


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