History of an Animation Startup

New animation studios happen from time to time. Pixar. DreamWorks Animation. And this one.

... For relative peanuts (at least compared to the price of acquiring a fully fledged toon studio), Universal underwrote the launch of Illumination Entertainment, which started with just two employees — Chris Meledandri and Kelly Martin, who had been Meledandri's executive assistant at Fox — and has since grown to more than 700, thanks to a successful partnership with Paris-based animation outfit Mac Guff. ...

Meledandri makes it a habit to share ideas for possible upcoming projects with Universal honchos Donna Langley and Jeff Shell at a very early stage. “Part of our strategy has always been to keep a very low ratio of developed projects to produced projects, which helps us to stay very focused on where we spend our resources,” Meledandri says. ...

When Illumination Entertainment began, it used a production process used often in television animation but seldom with its theatrical cousin. Illumination developed its movies in Los Angeles (often with moonlighting Disney and DreamWorks artists) and did the production overseas.

But it didn't use the traditional low-rent studios of India, Malaysia or the Philippines. It employed the MacGUFF animation studio in Paris. And with Despicable Me, MacGUFF and Illumination produced itself a hit right out of the box.

Illumination focuses on keeping its budgets in check and putting as much value as possible up on the screen. All of its animated features have been made at budgets below $80 million, which make them half as expensive as the DreamWorks Animation and Pixar product. To date, the lower budgets haven't impacted Illumination Entertainment's bottom line in the least. All of the company's animated features have made money, which has led Illumination Entertainment to buy MacGuff outright.

IE has upended old feature animation business models and gone on to produce hit after hit. It's become a force and influence in theatrical cartoons, and that influence will likely continue to grow. Where the number of successful theatrical animation bosses could be counted on two fingers (Lasseter and Katzenberg), three digits are now required.