Corporatists On Steroids

Remember the wage-fixing dust-up between Google, Apple, Pixar and others?

Turns out there were a LOT of others.

Apple and Google’s wage-fixing cartel involved dozens more companies, over one million employees

... In January, I wrote about “The Techtopus” — an illegal agreement between seven tech giants, including Apple, Google, and Intel, to suppress wages for tens of thousands of tech employees. The agreement prompted a Department of Justice investigation, resulting in a settlement in which the companies agreed to curb their restricting hiring deals. The same companies were then hit with a civil suit by employees affected by the agreements.

This week, as the final summary judgement for the resulting class action suit looms, and several of the companies mentioned (Intuit, Pixar and Lucasfilm) scramble to settle out of court, Pando has obtained court documents (embedded below) which show shocking evidence of a much larger conspiracy, reaching far beyond Silicon Valley.

Confidential internal Google and Apple memos, buried within piles of court dockets and reviewed by PandoDaily, clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP. All told, the combined workforces of the companies involved totals well over a million employees.

According to multiple sources familiar with the case, several of these newly named companies were also subpoenaed by the DOJ for their investigation. A spokesperson for Ask.com confirmed that in 2009-10 the company was investigated by the DOJ, and agreed to cooperate fully with that investigation. Other companies confirmed off the record that they too had been subpoenaed around the same time.c...

The revelation that tech companies and animation companies built themselves a cartel to suppress wages (free markets, hell yeah!) shouldn't surprise anybody living in 21st Century America.

I have learned over the years that companies will do lots of things to hold down pay. Sometimes what they do is borderline legal, sometimes not. Beyond conspiracy, one of the more basic ploys is to tell employees not to share wage information. The fact that this maneuver violates a wage earner's right of free speech and various labor regulations doesn't way heavy on many employers' minds.

Neither does lying to employees about what other individual are making. It's a practice so common that many managers consider it basic good business.

We today live in a corporatist state with most branches of government in service of corporations, from military manufacturers building tanks the Pentagon doesn't want, to a banking industry scooping up piles of free money, to entertainment and oil conglomerates guzzling tax rebates. That illegal wage suppression got so egregious the Department of Justic stepped in to slap hands and wrists is an anomaly, not a sight that "the system is working."

In 2014, the system is designed for entities with the word "incorporated" at the back of their names, not for flesh-and-blood individuals.

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Your American B.O.

Mr. Peadbody and Sherman takes a major hit as the Muppets enter the marketplace, but remains in third place.

1). Divergent (LGF), 3,936 theaters / $22.8M Fri. / 19.75M Sat. to $19.9M (-12% to 14%) / $13.9M Sun. (-30%) / 3-day cume: $56M to $56.7M / Wk 1

2). Muppets Most Wanted (DIS), 3,194 theaters / $4.6M Fri. / $7.1M Sat. (+53%) / $5M to $5.3M Sun. (-25%) / 3-day cume: $16.5M to $17M / Wk 1

3). Mr. Peabody And Sherman (FOX), 3,607 theaters (0) / $2.7M Fri. / $5.3M (+95%) / $3.97 (-25%) / 3-day cume: $11.7M to $12M / Total cume: $81M+ / Wk 3

4). God’s Not Dead (FREE), 780 theaters / $2.79M Fri. / $3.3M Sat. (+18%) / $2.1M to $2.7M (-15% to 20%) / 3-day cume: $8.6M to $8.9M / Wk 1

5). 300: Rise Of An Empire (WB), 3,085 theaters (-405) / $2.4M Fri. / $3.6M +53%) / $2.5M (-30) / 3-day cume: $8.6M / Total cume: $93.7M / Wk 3

6). Need For Speed (DIS), 3,115 theaters (0) / $2.2M Fri./ $3.3M Sat. (+52%) / $2.1M Sun. (-35%) / 3-day cume: $7.6M to $7.8M+ / Total cume: $30.2M to $30.4M / Wk 2

7). The Grand Budapest Hotel (FSL), 304 theaters (+238) / $1.8M Fri. / $2.9M Sat. (+55%) / $2.2M Sun. (-25%) / 3-day cume: $6.75M to $7M / Per screen: $21,500K to $23,100K / Total cume: $12.9M to $13.1M / Wk 3

8). Non-Stop (UNI), 2,945 theaters (-238) / $1.8M Fri./ $2.9M Sat. (+57%) / $1.7M Sun. (-40%) / 3-day cume: $6.3M / Total cume: $78.6M / Wk 3

9). The Lego Movie (WB), 2,501 theaters (-539) / $975K Fri. / $1.8M Sat. (+92%) / $1.2M Sun. (-30%) / 3-day cume: $4.1M / Total cume: $243.3M / Wk 7

10). Tyler Perry’s Single Mom’s Club (LGF), 1,896 theaters / $939K Fri./ $1.4M Sat. (+52%) / $71M Sun. (-62%) / 3-day cume: $3M+ / Total cume: $12.8M / Wk 1

Deadline explains:

It’s traditionally very hard for the industry to track family films and Disney’s Muppets Most Wanted which was guesstimated to come in around the high-$20 million mark — and would have if not for Mr. Peabody and Sherman which is also after that family audiences — is looking like $18M to $19M tonight.

Muppets Most Wanted's budget is around $54M. Peabody is gonna pull $11.3M away from it, which is like when The Nut Job was in the marketplace and had a similar problem with Frozen (which no one could have guessed would have played as long as it did). ...

Frozen has now departed the Top Ten, which makes sense because it's now out on little silver disks and available everywhere. But it continues to be a money machine.


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Most Valuable Blockbusters

Deadline did a series of "Final Four" style match-ups today, just for amusement.

With one exception, the entertainment daily had the animated movie coming out on top.

Like for instance:

Despicable Me 2 vs. Star Trek: Into Darkness

... A first-round rout. The good news for Star Trek is, even without Abrams, Paramount and Skydance are formulating another sequel and continuing one of Hollywood’s most enduring franchises. In this matchup though, it’s no contest. Despicable Me 2 is pouring off $394.5 million in profit, by our estimates. By comparison, Star Trek generated $29.9 million. ...

And this:

Monsters University vs. Thor: The Dark World

The Winner: Neither gains much of an edge because each is the second installment of a franchise, though Thor 2 probably amps up expectations of the next installments of Marvel’s biggest jewel, The Avengers. So we go to the profit numbers. According to our experts, Monsters University will return $179.8 million to Disney, besting the $139.4 million that Thor 2 returns to Disney. Total cash-on-cash return edge goes to Monsters University. ...

The take-away here isn't that animated features made it into the match-ups, but that numerous animated features dominated the match-ups. How a small sub-set of movies that were once ignored are now at the top of the "Most profitable" category of feature films continues to amaze me.

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TAG 401(k) Plan Changes

This will be of interest to TAG members.

Yesterday, TAG 401(k) Plan trustees voted to change the Animation Guild's plan administrator. For the past several years the Plan has used Mass Mutual to administer day-to-day operations. Beginning this summer, Vanguard Mutual Funds will take over that function. ...

This change came about because Plan trustees have been focusing on service and costs. They've determined, after a lengthy vetting process, that Vanguard's service level, funds and overall cost structure best suit the Plan's needs.

There will be changes in the Plan going forward; we believe the changes will enhance participants' investments. Click here to read entire post

"Considering VFX"

There's another report out about how California's entertainment industry is currently starved for oxygen and thus eating it.

The section on page 15 (linked above) caught my attention. It's nice to see that some people have a clue.

... As larger budget films become more visual, dramatic and technological in their effects, the portion of the production budget spent on visual effects has increased commensurately. Yet in spite of the growth of the industry resulting from visual effects being increasingly integrated into films, employment in the industry in California has been stagnant over the past decade as outsourcing of services to facilities outside of the nation continues, drawn by generous subsidies and lower-cost labor.

California is one of only a handful of locations that does not have subsidy programs specifically targeting visual effects. As a result, even California-based companies are opening offices in Canada, the United Kingdom and in Asia to qualify for tax incentives offered in those locations.

For the special effects industry, even more so than film and television production, the work can be done anywhere by qualified labor. It is a lucrative business, with a high-skilled, highly-technical workforce that can produce quality product using personal computers across the globe. As such, the threat to this industry’s long-term survival in California is real.

Consequently, a provision specifically aimed at allowing visual effects providers to access tax credits may be considered.

The credit level applied to visual effects should be determined based on (a) the acceptable level of ROI and (b) the expected percentage of California expenditures that qualify for inclusion. If the acceptable level of ROI is 1.00, and assuming all visual effects expenditures in California qualify, then using the relationship between the two variables found in Exhibit 5-1 the maximum credit incentive level would be 12.5 percent. It is not known whether this would be sufficient to make the domestic industry competitive. ...

If AB 1839, the legislation to expand California movie and television tax credits that is now under consideration in Sacramento, gets passed, it would be good if there were benefits to the Golden State's visual effects businesses, since they are

a) high wage employers,
b) high tech business that are a big plus for the state, and
c) a growing and vibrant part of the motion picture business, so to exclude them from the bill doesn't make a huge amount of sense.

There will be a number of amendments to the AB 1839 (and its Senate counterpart) over the next few months, so visual effects might be brought under the law's umbrella before the bill is voted up or down. The report from California's governments simply spells out the obvious: It's not a swift idea to not have a growing, cutting-edge sector of the movie business left out of the bill, but politicians (have you noticed?) march to their own drummer lobbyist.

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Pete Young

Long ago, Mr. Young was an up and coming creative powerhouse at Disney Feature Animation.

... [A] good story artist has to know when to make decisive moves in story development. Pete learned not to introduce a new story element if his director wasn't ready for it. Good ideas presented at the wrong time stood a chance of getting rejected. At Disney, the politics of story can be as important as creative skills. Pete Young - along with Ron Clements sold “Basil of Baker Street” as an animated project. And sure enough the film was green lit for production by studio boss, Ron Miller. ...

In the early eighties, Pete was one of the pillars of the Disney Feature Animation. He was in his middle thirties then, but looked like he was twenty-five. Or twenty-two. He was one of the drivers in the story department, with an uncanny knack for coming up with the right story/character/gag when the Boss (whoever he happened to be) was most ready to receive it.

He's been gone almost thirty years. I think about him all the time.

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The TAG Interview -- Randal Myers (Part II)

TAG Interview with Randy Myers

Find all TAG Interviews on the TAG website at this link

After Randy left Warner Bros. Feature Animation (and Randy sort of had to, since the studio shut down), he moved to a new studio called Cartoon Network, where Genndy Tartakovsky, a Cal Arts classmate, was creating and directing Dester's Lab and the Power Puff Girls. And Mr. Myers, his animator's background standing him in good stead, quickly became a director of television cartoons. ...

Since then, Randy has directed hundreds of cartoon episodes for most of the major studios in Los Angeles. He is of the opinion that, beyond working diligently, it's useful to know what's going on in the industry and to network, network, network. Click here to read entire post

Money Machine

Small wonder that Robert Iger was praising Frozen's virtues at yesterday's stockholder meeting.

Underscoring the popularity of Frozen, Disney said Wednesday that it has sold 3.2 million units of the movie on Blu-ray and DVD on March 18, its first day of sales.

The company believes it will be one the biggest titles released in home entertainment in the last decade. Following its debut on digital HD and digital 3D on Feb. 25, it quickly became the fastest-selling digital release of all time, according to the studio. ...

Disney will soon be able to open its own mint. From this one animated feature. Click here to read entire post

Craft Meeting #5 -- Animation Directors, Animation Checkers

Last night the fifth and final craft meeting took place in TAG's meeting hall. There was a good turnout of animation directors and checkers, and the first order of business was a veteran animation director's concerns about today's L.A. cartoon industry:

... Being referred to as "sheet timers" has had, from producers, an ill effect on us: 1) knowledge and respect for the work that we actually do. 2) The salary/ wages that we are paid reflective of that lack of knowledge.

Our job title should have always been "Animation Director," since that is what we actually do. We do not and have never TIMED X-SHEETS! What we DO is DIRECT the animation by Slugging (which is actually the portion of our work that should be called "timing.") We then Direct the animation action ( characters, effects, camera moves ) by scribing them onto X-Sheets; this is Animation Direction NOT Sheet Timing.

I don't know what other studios are doing this but, Warners, Hasbro and Marvel have taken the slugging portion away from us.
We are now given an animatic that we did not slug, with X-Sheets already "read" based on that animatic. We are then required to "make- it-work. That means as we are filling out the sheets, Directing the animation, we are, at the same time, slugging.

Unless we are fortunate enough to be "on staff" at a Union Contract Studio, earning a reasonable wage, we are, instead, picking up freelance work. That freelance work, as I believe you know, in reference to the amount of footage one is given/handed, varies. This is understood. The problem is that we are still being paid the same $3.00 per foot average for the past, what?... 25-30 YEARS!!!

On another serious note: For the first time in my career ( since 1977 ) I was ineligible for continued MPHW coverage due to the increase from 300 hours to 400 hours in a given qualifying period. With my banked hours applied, I fell short by 52 hours. Had this new 400 hour increase not be instituted, I would still have my wonderful MPHW coverage. ...

I explained that

* Seven years ago during IA-AMPTP negotiations, the Animation Guild's position was that the 300 hour contribution requirement should be maintained, but the IA decided to go to 400 hours instead of adding premium payments. (Note: Premiums for MPIPHP Health coverage were introduced in the last contract negotiation.)

* The title "Sheet Timer" was negotiated in the 1970s. And I detest the classification title.

* Footage rates can be eliminated through a disavowal in the next contract negotiation, since they're not in the guild contract but something that the studios conjured out of thin air. ...

There was a lengthy discussion about footage rates, and whether they helped or hurt animation directors. I said that eliminating footage rates would probably raise freelance wages by a small amount and increase the number of contribution hours into the Motion Picture Industry Health and Pension Plan. There were advocates for retaining footage rates, but more attendees appeared to be in favor of eliminating them and being paid the daily or weekly rate.

There were complaints about schedules, particularly freelance employees receiving 400 or 500 feet of work on Friday and being told "it needed to be in" by Monday.

There was a spirited back-and-forth about the use of animatics. And how animatics cut into timing directors' work. And how (in some cases) animatics eliminate timing directors' work altogether (and how studios often don't like the end-result of no timing, and then set about repairing the work by hiring ... animation directors). But whether or not animatics are useful and needed in the production process, it was generally conceded that studios like animatics, and they won't be going away.

SUMMARY OF SURVEYS

Median Timing Director Wage: $2198

Comments:

Schedules are most often too short -- pre-production pieces (board, design, etc.) are generally incomplete/inadequate -- mising info. -- little to no notes -- lack of informed people to answer questions!

Biggest issues working under TAG/IA contract: we wnat more money, more resonable schedules, and more job security.

Biggest issue under contract: Producers' wide discretion in firing.

Biggest issue: Raise footage rate and lower hourly rate used to convert footage to hours.

We need a footage minimum rate in the contract, subject to 2% increases.

Footage rates suck.

Freelance timing rate is unattractive to anyone talented enough to hire. Overtime is sometimes needed but never authorized.

Biggest issue: Footage rate should be $5 per foot with a 2% increase each year.

The time scheduled isn't really adequate but I make it work ...

The meeting lasted about an hour and a half, then continued another twenty minutes as people broke into small groups and continued talking.

Find a summary of all other craft meetings here.

Click here to read entire post

Box Office Drivers

The Mojo tells us:

As of Sunday, total domestic box office earnings have surpassed $2 billion in 2014. To date, the box office is up around eight percent from last year.

If that pattern continues, 2014 would come close to being the first $12 billion year. That isn't guaranteed, though: 2014 is lagging behind 2012, 2010 and 2009, none of which even came close to $11 billion.

Two animated hits are leading the way so far this year. The LEGO Movie is number one so far with $236.9 million (as of Sunday), which accounts for nearly 12 percent of year-to-date box office. The movie ranks second all-time among February releases behind The Passion of the Christ, and is on its way to being one of the highest-grossing original animated movies ever.

Frozen is in second place so far with over $133 million. Despite opening in November, the Disney Animation blockbuster has been in the Top 10 on all 11 weekends so far this year. That makes 16 straight, which is the longest streak since Chicago in early 2003. ...

On a worldwide basis, The LEGO Movie leads 2014 releases with $379 million (over 62 percent from the U.S.)*. 300: Rise of An Empire was a fast hit overseas, and ranks second for the year with $238 million. Thanks to huge numbers in China, the Robocop remake is currently in third with $234 million. Mr. Peabody & Sherman ($149 million) and Ride Along ($142 million, most of which is from the U.S.) rank fourth and fifth, respectively.

Domestically, Warner Bros. is the highest-grossing studio in 2014 with $442 million (22 percent). ...

None of the above is surprising information.

Animated features have been the high-profit segment of international box office for some years now. It's been decades since cartoons were a sleepy backwater of the industry, which most conglomerates ignored or scarcely knew existed. Even Warner Bros., which used to be where animated features went to die, has had stupendous success which its latest theatrical offering.

Animation continues to be the part of Movieland that shines. Click here to read entire post

At DreamWorks Animation

Barrons tells us:

Last week, DreamWorks Animation's dog-and-boy film Mr. Peabody and Sherman was labeled a flop after it took in just $32.5 million domestically during its opening weekend. However, Peabody isn't rolling over just yet. It made $21.5 million domestically this past weekend, enough to take the top spot during a slow patch. And the second-week drop was smaller than some analysts expected. ...

[DreamWorks Animation] hasn't had a $200 million domestic grossing film since How to Train Your Dragon in 2010. Since then, Pixar topped the $200 million mark with Brave; Disney Animation with Tangled and smash Frozen; Universal with Despicable Me; and Warner Brothers with The Lego Movie. ...

But actually, staff at the Glendale campus aren't morose. As one artist said to me: "We got a Number One movie this week, and we'll take it." The question is, how will P & S hold up when Miss Piggy and friends enter the marketplace on Friday?

Animation is wrapping up on How to Train Your Dragon II, and only lighting and surfacing remain to be done. Home, the short for which is displayed below, comes out in the Fall.



A staffer noted:

Home has a lot fewer major characters than most of our movies, so rigging was easier, we didn't have as many complicated rigs to do. ...

I've got no idea what Home's final budget will be, but DWA usually produces $150-170 million dollar features. By the accounts I've heard around the studio, the picture is funny and fast-paced. DreamWorks Animation hasn't had a lot of luck with its recent originals (The Croods excepted), but maybe Home will break with recent box office history and have big returns.

If so, it'll mean that the majority of DWA's 2014 feature slate will be winners.

Click here to read entire post

The TAG Interview - Randal Myers (Part I)

TAG Interview with Randy Myers

Find all TAG Interviews on the TAG website at this link

Director and animator Randy Myers is nothing if not persistent. When he got turned down by Cal Arts for a spot in their animation program, he applied a second time. When the school declined to accept him a second time, Mr. Myers started taking art classes in earnest, redid his portfolio, and finally found success ...

But Randy Myers was a young man in a hurry. "It was the early nineties," he says, "and there was a demand for animation artists. And I had loans of pay off, so after two years I left and went to work full time in animation. ..."

It was a heady time. Disney Feature Animation was on a roll with a string of hits, and every major entertainment company wanted to be in the animated feature business. Randy went to work for Turner Feature Animation, where he worked his way up to animator on Cats Don't Dance, then moved over to the Warner Bros. feature studio where he animated on Quest For Camelot and Brad Bird's Iron Giant in rapid succession.

Randy speaks of these things and more in the first of a two-part TAG interview. Click here to read entire post

Organizing

Why organizing VW went down in flames:

Last month, the United Auto Workers (UAW) attempted to organize a Volkswagen plant in Chattanooga, Tennessee. The union failed. Media reports of organized labor’s demise have followed, with the debate divided between one camp that views the labor movement as beyond-resuscitation dead, and another that views the patient on life-support with only a slim chance of survival.

Perhaps there is no turning back. But the fight in Tennessee doesn’t really tell us much one way or the other, despite all the hyperbole surrounding the lead-up to the vote. ...

What then is the real lesson of Chattanooga? The campaign illustrates how labor law disadvantages unions trying to make inroads across industry after industry in today’s economy. ... To remain relevant, unions must find success in the fast-growing occupations of our increasingly service-dominated economy. This means occupations like home health care aides (a rare bright spot for organized labor in some states), retail workers, fast-food employees, and customer support specialists. And last month’s struggle in the South makes clear what an uphill battle union expansion will be absent significant changes in the laws governing collective bargaining. ...

I've been in the union organizing game for a while now, and here's what I've figured out:

The movie business is an anomaly. Outside of the public sector, it's about the only American industrial area that remains highly unionized. In some ways this is a fluke of history; American movies and television shows haven't had (until now) stiff competition from overseas, and in fact, American movies and television shows have been major export items for the United States. By dominating foreign suppliers, American entertainment has remained robust ... and as a result union contracts in Movie/TV-land have continued in place.

What's the one part of movies/tv that isn't unionized? The part that wasn't invented when unions were dominant: CGI visual effects. This isn't, I don't think, accidental.

I'm (relatively) optimistic about the movie/entertainment business remaining union for the foreseeable future. But for the next five to ten years, I'm pessimistic about unions organizing everything else. The article linked above gives some reasons:

[During the UAW organizing drive of Volkswagen], Tennessee state legislators warned darkly about cutting future state subsidies should the workers vote the union in – effectively threatening future jobs for their constituents should the union win. As Harvard Law Professor Benjamin Sachs has written, “conditioning the availability of tax incentives on VW’s union status would in all likelihood be preempted by federal labor law, and therefore illegal.” Senator Bob Corker went further, claiming he had evidence that Volkswagen would expand its Tennessee plant’s product lines if the workers voted down the union (the company strenuously denied the claim). ...

Why do Corker and his anti-union colleagues feel free to offer expressly illegal advice – and issue illegal threats – to a private corporation? Because they don’t fear the consequences. This exemplifies the atrophied state of U.S. labor law today, where lawmakers freely flout the law, and demonstrates the long odds labor faces even in the rare case when management remains neutral during an organizing campaign. Would the outcome of the vote have been different if lawmakers actually supported the laws they are elected to uphold? ...

As any grizzled organizer will tell you, companies threaten employees during unionization drives all the time, and they do it despite federal laws that protect employees from retaliation or termination because of their organizing activities. (News flash: Having laws that are unenforced are like having no laws at all!) Corporations do this with an impunity that would have been unthinkable forty or fifty or sixty-five years ago, but then, the company-union playing field has changed. It really ain't even a playing field anymore. It's a steep slope on the side of Mount Everest, with conglomerates holding record profits and private-sector unions clinging to the cliff-edge. (The reason the IATSE and TAG still have organizing successes is due to leverage, not the law. There are enough unionized jobs in television and movies that non-union employees can achieve union contracts despite lax enforcement of laws.)

But history is an ever-flowing river, and as the gulf between rich and poor continues to widen, as private jets and gated communities proliferate and the population that lives paycheck to paycheck continues to grow, the citizenry will become more and more restless. It happened in the 1930s and 1890s, it happened in 18th century France and 20th century Czarist Russian. It happens today in Thailand, the Ukraine, and Egypt (to name a few countries with big disparities between the rich and working poor.)

Where there are yawning canyons between wealth and poverty, people get ticked off ... and then, more often than not, take action. The results are often unpretty, which is why I can never understand why billionaires so often push back ferociously against structural reforms that would preserve much of their wealth but give working stiffs a leg up. "Single payer health care? Forget it! Bigger Social Security checks? You're crazy!"

Sadly, it's part of human nature to look no further than the fence post a hundred yards down the road. The long-term history lessons provided by Czar Nicholas and King Louis are never fully learned, particularly by the rich. They're too busy accumulating the next billion to recognize that the angry mob gathering at the foot of the hill intends to take all that lovely money away.

Click here to read entire post

Moving North

Most everyone knew this was coming.

TORONTO - Industrial Light & Magic on Monday took the wraps off of its new and expanded Vancouver studio as it continues work on a new Star Wars franchise.

The VFX division of Lucasfilm, and a subsidiary of The Walt Disney Company, launched the 30,000 square foot feature visual effects facility in the city's downtown Gastown district.

Around 200 artists are expected to be at work at in the new Vancouver operation by summer 2014, with movies like Transformers 4, World of Warcraft and around a third of the production on Star Wars Episode VII to be done in the west coast city. ...

California continues to get kicked in the backside because of the torrent of free money that British Columbia and other Canadian provinces and countries throw at our fine, entertainment conglomerates.

There are really only two ways to counter this:

1) Countervailing tariffs get put in place against foreign subsidies (but this won't counter subsidies in New York, Georgia, Louisiana and other United States).

2) California offers tax subsidies that are competitive (or close to) with British Columbia, New York, Georgia, etc., etc.

But to strip away the b.s., there are no ideal solutions here. Only ones that are less shitty than the non-solutions we have now. Giving free money to large corporations has long-since become a fine, American tradition. We hand out dollars to banks, car companies, owners of big league sports franchises, so why the hell not Warner Bros., Disney, Viacom, and Twentieth Century Fox?

I detest the tradition and practice, since it turns free-market capitalism on its head, but twenty-first century America is what it is. Click here to read entire post

In Search of the New Iger

The ongoing quest.

Disney Starts Search For New CEO

... Bob Iger, Disney's current CEO, will be ready to leave in 2016, which means the search for a replacement is already underway.

•Ann Sweeney, head of the Disney/ABC TV Group, recently left Disney, likely in part due to being out of the running for CEO...

After 12 years at Nickelodeon and 3 years at FX, Sweeney rose through the Disney ranks and has headed the Disney/ABC TV Group since 2004. Sweeney was not being considered in the running for the CEO position of the Disney conglomerate, which could make her decision to take her career in a new direction more understandable. ...

Other names are in contention for the Disney top spot, including James Rasulo, the company's chief financial officer, and Thomas Staggs, chairman of the theme park unit. The two men have significant experience at Disney and would provide a smooth transition for company. However, it could be that the company is looking for a more innovative vision for the future that only fresh blood could provide.

Sheryl Sandberg, who sits on the Disney board, is another name frequently mentioned. With her background at Facebook and Google, she has the foresight necessary to provide a vision for the future. ...

Lots of speculation at this point about who ends up getting the top spot.

But one thing seems likely: The current CEO will not be departing under the black cloud the previous CEO had hovering over him. If anything, there will be a lively fireworks display and a nice exit package when Robert Iger at last heads out the door. Click here to read entire post

Animation in the Middle Kingdom

Every year China puts out a glowing, upbeat report about how well the Chinese animation industry is doing. I'm in the habit of reading the internet summaries, and was surprised to this year see this:

... In 2013, because of rising production costs, serious brand [brain?] drain and less national support policies, investment in animation industry declined and the number of animations also dropped, enterprises producing movies and TV cartoons decreased in quantities, and original animation production was dropped to around 150 thousand minutes, year-on-year decline of 32.7%, indicating China's animation industry is developing from large quantity to high quality. ...

So is that it? A 33% drop in production means quality is going up? Couldn't it just mean ... you know ... that there's been a drop in production? How do you measure "high quality"? And how do you measure how much it's risen year over year?

Disney and DreamWorks Animation are in China setting up production units, but those studios haven't produced anything as yet. Which would indicate that domestic studios aren't doing as much production for the home market.

Or so it seems to me.

But the report summary doesn't quite jibe with a concurrent press release about a Chinese feature:

Magic Wonderland, based off a popular TV series, is Zoland Animation's latest original animation movie set to be released this year. Targeted towards children ages 5-12, the animation has already won a number of prestigious awards. ...

The Chinese animation industry has evolved over recent years from an outsourcing destination for animation to one that is renowned for the uniqueness and creativity of the nation's own original animation. With sales exceeding US$5 billion in 2012, over 4,000 hours of animation content produced a year and Chinese animation penetration in over 70 markets, China looks to be one of the fastest growing countries for animation, production, licensing and merchandising in the world. ...

Well, maybe the licensing and merchandising sectors are growing. But when production is down 32.7%, that doesn't quite fit the definition of "fast growing".

Click here to read entire post

Animation's World Box Office

The world totals for cartoons.

International Weekend Totals -- (World Cumes)

Mr. Peabody and Sherman -- $15,300,000 -- ($148,779,916)

Frozen -- $10,400,000 -- ($1,026,556,000)

The Lego Movie -- $4,700,000 -- ($378,431,928) ...

As the entertainment press reminds us:

... Disney’s Frozen, which held its Top 10 position at the domestic box office for the 17th straight weekend, is now open in all markets. It cast a spell in Japan this weekend to give Walt Disney Animation Studio its biggest opening of all-time there with an estimated $9.4M. That’s 13% off Monsters University’s opening last year – the film went on to be the No. 2 movie of 2013 in Japan with over $90M. I’m told that multiples for opening weekend in Japan can sometimes be as high as 15. If Frozen has legs there, it could potentially overtake Toy Story 3 as the biggest animated movie of all time. ...

Mr Peabody & Sherman is also continuing its strong run overseas. The movie travelled to another $15.3M from 10,340 screens in 61 markets. The international cume is now $85.6M for the Fox release. In Germany particularly this week, the movie saw a 9% bump, adding a further $1.5M. It’s still got Australia, China and Korea to go. ...

Warner Bros’ The Lego Movie added an estimated $4.7M in 52 markets for an international cume of $141.5M. Upcoming releases include Australia on April 3 and Germany on April 10. ...

All three features seem to have staying power in world markets.

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Running For Office

Patric Verrone, long-time animation writer (under the WGA) and a WGAw board member, goes after a State Senate seat.

WGA board member Patric Verrone, who as union president led the guild through a tumultuous 2007-08 strike, is running for state Senate in California's 26th district, he said in a fundraising letter Saturday. He faces five other candidates in the June 3 primary, but his biggest opponent may be his signature accomplishment -- the WGA strike -- whose effect remains hotly debated.

Verrone, an Emmy-winning writer on late-night shows and animation programs including Futurama, is also a lawyer admitted to practice in California and Florida. ...

The 2008 writers' strike ended up helping the Directors Guild of America leverage a New Media deal that other unions and guilds (including this one) have followed.

Mr. Verrone's two terms as WGAw President were filled with activism, and there's still debate inside the Guild and out whether the '07-'08 strike helped WGA writers or hurt them. But we wish Mr. Verrone well in his quest for legislative office.

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A Billion is Nice, But ...

... regarding Frozen, it ain't just the ticket sales.

... Merchandise is a big part of the strategy at Burbank, California-based Disney, which is the largest licensing company in the world. It's sold almost 500,000 dolls modeled after Elsa and her sister Princess Anna; during a limited-edition offer in January, almost 5,000 were snapped up in 45 minutes at Disneystore.com, a record for the site.

Mattel Inc., a Disney licensee, has sold more than $100 million of "Frozen" toys, while licensee Jakks Pacific Inc. has sold tens of millions of dollars worth ...

When you're firing on all cylinders, what's a little thing like box office grosses?

And this has translated into higher morale inside the Hat Building. As a storyboard artist said to me last week:

"Wow. Did you think this would ever be happening again? I don't think anybody around here imagined we'd be back on top. The last few years, we've felt like second class citizens, so having a blockbuster, it's a new experience."

Well, since the 1990s, anyway. But what I said (and honestly believe) is that hits go in cycles. Even Pixar, a studio with a never-ending hot streak, has movies that do less well than others. (Nobody points at Cars II as an iconic classic, although it did sell a lot of toys ... see above.)

One of the nice things about the hat building these days is it's packed to the gills. Staffers tell me when Big Hero 6 is fully ramped up, work space for the crew will be at a premium. Added to which, there's lots of projects in development, with artists spending their work days in story conference rooms, hashing out plot lines and character arcs.

"We've almost outgrown the building," a supervisor told me. "But it's a nice problem to have."

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The Box Office

Whoa, look who's on top.

1). Mr. Peabody And Sherman (FOX), 3,951 theaters (+17) / $5.5M Fri. / $9.5M Sat. (+75%) / $6.2M Sun. (-35%) / 3-day cume: $21.2M (-34%) / Per screen: $5,445 / Total cume: $63.3M to $63.8M / Wk 2

2). 300: Rise Of An Empire (WB), 3,490 theaters (+20) / $5.7M Fri./$7.8M to $8.1M Sat. (+38%) / $5.1M Sun. (-35%) 3-day cume: $18.6M to $18.8M (-58%) / Per screen: $5,420 / Total cume: $77.8M to $78.1M / Wk 2

3). Need For Speed (DIS), 3,315 theaters / $6.6M Fri./ $6.6M Sat. (0%) / $3.9M Sun. (-40%) / 3-day cume: $17.3M / Per screen: $5,400 / Wk 1

4). Non-Stop (UNI), Wk 3/ 3,183 theaters (+70) / $3.19M Fri./ $4.6M Sat. (+47%) / $2.6M Sun. (-44%) / 3-day cume: $10.5M (-34%) / Per screen: $3,390 / Total cume: $68.6M to $68.8M / Wk 3

5). Tyler Perry’s Single Mom’s Club (LGF), 1,896 theaters / $3.2M Fri./ $3.2M Sat. (0%) / $1.8M Sun. (-42%) / 3-day cume: $8.3M / Per screen: $4,378 / Wk 1

6). The Lego Movie (WB), 3,040 theaters (-250) / $2M Fri. / $3.3M Sat. (+62%) / $2.18M Sun. (-35%) / 3-day cume: $7.5M to $7.6M (-29%) / Total cume: $236.8M / Wk 6

7). Son Of God (FOX), 2,990 theaters (-281) / $1.4M Fri./ $2.2M Sat. (+52%) / $1.76M Sun. (-20%) / 3-day cume: $5.4M+ (-48%) / Per screen: $1,840 / Total cume $50.8M / Wk 3

8). The Grand Budapest Hotel (FSL) / 66 theaters (+62) / $1M Fri./ $1.4M Sat. (+360%) / $1.1M Sun. (-20) / 3-day cume: $3.6M (+349%) Per screen: $55,152 / Total cume $4.8M / Wk 2

9). Frozen (DIS), 1,466 theaters (-194) / $520K Fri./ $925K Sat. (+76%) / $560M Sun. (-35%) / 3-day cume: $2M (-30%) / Per screen: $1,390 / Total cume: $396.3M / Wk 17

10). Veronica Mars (WB), 291 theaters / $1M Fri. / $617K Sat. (-39%) / $375K Sun. (-40%) / 3-day cume: $2M / Per screen: $6,837 to $7120 / Wk 1

The Mojo remarks:

... Mr. Peabody & Sherman took third place with $5.45 million. That's a light 32 percent drop from last weekend, which suggests Peabody is getting strong word-of-mouth among family audiences. The DreamWorks Animation movie will take first place for the weekend with as much as $23 million. ...

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