The Soldier on The Merger

I've been asked by many: "What's going to happen with DreamWorks Animation?" Though I don't have specifics (because the rude folks at Comcast-Universal have dropped me off the "CC" list for internal e-mails), I have made predictions about how DWA's future will unfold. And now I find, courtesy of a TAG member, that VFX Soldier has stirred back to life and offers this:

... [The DreamWorks Animation-Comcast merger] is a huge success for Katzenberg and he deserves it. However for the employees at DWA it’s a vastly different story because Comcast will subscribe to Mellandri’s feature animation production model and not the production model of Katzenberg.

... Katzenberg generally subscribes to the ["end-to-end"] production model in feature film CG-animation that is shared by John Lasseter at Disney and Pixar ... where from the storyboard to the final comp the whole production pipeline is generally housed under one roof. The employees are treated very well with good salaries, generally longer term contracts and with some having union benefits. The management team can clearly see what works and what doesn’t and adjust accordingly. The problem is adjustments can be like turning a huge ship which can lead to overflowing budgets if you’re not looking ahead. ...

Another model is the traditional outsourcing model that many ... love to talk about. This is where pre-production is done by animation veterans in the US and sent to CG productions facilities in Asia like India and China where labor costs are very low. ...

The final model is the one that I believe Comcast will subscribe to: The subsidized production model. This is the model that Comcast will adopt from its leading animation producer Chris Meledandri. It’s the same model former Imageworks exec Bob Osher adopted and one that many other VFX facilities have been forced to adopt: Move your production to locations where the government offers huge amounts of free taxpayer money. ...

The first bad sign [about the merger] is Katzenberg leaving. That gives Comcast no resistance to do what it intends to do no matter how stupid or costly it is. I know the Kool-Aid can be very potent at DWA and if I were you I would be completely skeptical of any terms of transition directed at any of you. A buy-and-hold period of about a year has been established so you have between now and “ground zero day” to pack your parachute. If ground zero day arrives and your safe great, if not, at least you are prepared. Given the landscape of VFX and CG animation production these days you might want to begin looking at the option to move to Canada, New Zealand, or the UK if you are interested in pursuing a career in VFX and animation. ...

Soldier's thoughts about DreamWork's future pretty much track my own.

On the bright side, I think the company will beef up pre-production for both features and television. Comcast is interested in following the Disney synergistic model where content boosts merchandise, beefs up the amusement parks, and becomes a driving force for video games and various distribution platforms. Much of this work will stay near the mothership in Los Angeles.

On the less-bright side, some (all?) feature production will leave town and go to places that pay lower wages or give away free money. As I write, there are 565 Guild members at DreamWorks Animation feature division and 261 Guild members at DWA's TV division. In the next one to three years, I would expect the feature numbers to diminish and the TV numbers to increase.