Wednesday, January 17, 2007

Animation? Going Away?

This is a (sort of) followup to the Wages post down below which bears scrutiny. We noted that wages have stayed relatively level the past few years (they did decline in the late nineties after the 'toon boom of hand-drawn animation ran its course. A commenter said:

The more we ask, the more likely they will take the business overseas eventually. It is already happening, the problem is you can never compete against the people who are willing to work with 1:5th of your salary no matter how good you are!

There's truth to the observation that animation work has shifted overseas. If you see new episodes of The Flintstones or a Daffy Duck feature-length cartoon, the odds are good that some or all of the production work was done in the Phillipines, Korea, maybe mainland China. But this is far from the whole story.

As I've said before, when all animation production work was done in Los Angeles start to finish, there were about 1500 TAG members doing the work (and kindly note that almost all L.A. cartoon studios were unionized at the time.)

Forty-five years later, with union contracts covering 85% of t.v. and movie animation work in L.A., with 80% of television production work (animation, background, and layout) being shipped out of county), there are 2200 TAG members doing the work.

How can this be? Because the animation pie has gotten bigger. Way bigger. Forty-five years ago there was television animation (all done here), feature animation (i.e. Disney), and some commercials. Today there are games, the internet, t.v. animation, feature animation, visual effects, broadcast graphics, and so on and so forth. Where once there were a couple of thousand people employed in Southern California in animation, today there's five or six times as many (and newer media is mostly not unionized.)

Make no mistake. Southern California is one of the high-rent areas on the planet in which to produce animation. It can be done a number of places for less money. But as more than one producer has said to me and/or TAG's members:

"L.A. is where the big animation talent is..."

So animation producers are faced with a choice. They can go to India, or China, or Bangladesh, and they can get a project done more cheaply. But they lose quality and they lose quality-control, and if those things are important -- as often they are -- then hey. They don't do it there.

There's another wrinkle, told me by an animation software executive this very day: Sub-contracting studios on the Pacific rim are now faced with skyrocketing labor costs as their employees move into the middle class. So American studios have much bigger cash outlays going to their (previously) inexpensive foreign sub-contractors. One solution, of course, is to simply chase after the latest low-cost provider in Kurdistan or wherever, and in many cases this is being done. But then the old issue of "quality" once again rears its ugly head.

Many studios are going (or will go) a different route: The L.A. talent pool, combined with newer, more powerful animation software, is a strong magnet for many producers, and makes production in Los Angeles feasible in ways it hasn't been in decades. Television animation hasn't been created in L.A. in years, yet Cartoon Network and Renegade Animation (and probably studios I don't know about) are doing it for television.

There are three feature animation studios in town, as well as four large visual effects houses. Game studio Electronic Arts has a new, not inexpensive facility in Playa Del Rey.

And how many of these places are here because L.A. County offers the most bang for the employment buck? None. Nada. But L.A. is where the creative action is, where the deepest pool of talent is, where the infrastructure is. This isn't to say that the talent magnet will be here forever, or that other centers can't grow and develop (obviously many have...can we spell E-M-E-R-Y-V-I-L-L-E?), but it is to say that the demise of L.A. based animation has always been overblown.

Walt didn't grow his animation studio in L.A. rather than low-cost Kansas City for no reason.


Anonymous said...

Amen to that.

I had the opportunity to visit Walt Disney's old Laugh O'Gram studio in Kansas City about a year ago. Restoration continues on this Disney landmark. Kansas City is a pretty nice town and working there wouldn't have been half bad.

However, even Walt must have realized that he needed to head west. Virginia Davis (star of the "Alice" comedies) said that Walt gave her parents a hard sales pitch about moving west. Hollywood was where the action was -- and continues to be to this day.

Anonymous said...

Well, one of the reasons Walt left Kansas City was that he ran up bills he couldn't (yet) afford to pay. He paid every one of these bills back in full, and made lifelong friends in the process--but he probably wouldn't have been able to pay them as quickly had he not gone out west. And Walt chose west to try his hand in live action. Thankfully, he found animation to be an excellent niche and worked forward from there.

Anonymous said...

Lets not kid ourselves either.

the animation industry has never been more unstable even with the abundance of films out there. many of which that are not produced in L.A. and one that made more money than CARS globally like N.Y's Ice Age 2. and yes, Pixar is still far from L.A. as is the PDI successes. L.A. definitely still has a concentration of great artists but our country in general is losing production in droves to countries like India and the Asian rim not to mention our friends in Canada who have an incredible production incentives. well known studios are sending multimillion dollar productions overseas that i am sure could have been done in the states.

yes, there are a number of states in the U.S. that have state incentives and i know a few smaller studios that are using those to their advantage but i dont know how we can stop the studios flood of production that is leaving.

I'm glad for the Jeffrey K's of this industry.

Steve Hulett said...

The animation industry has always been a roller coaster, from its beginnings to now.

Boom in '56. Bust in '58. Flush times in 1960, then recession two years later. New York City was a major animation hub for years, then a wasteland.

The 'toon business has never been serene. I'm simply saying that it goes on domestically despite almost forty years of globalization.

Tom Sito's book Drawing the Line details the ups and down well. You want peace and stability, you probably won't find it in the animation industry.

Anonymous said...

As a box office hit, I'm so happy for Ice Age 2. But Cars has made FAR more money overall, especially when you factor in the $2 billion in toys alone the film h as sold. If only Blue Sky had fully anticipated such an incredible hit, maybe they'd have pushed merchendising more!!

Anonymous said...

you cannot beat the marketing insanity of Disney. they are masters at the deluge upon the unsuspecting consumer.

Anonymous said...

yes. animation is cyclical but the latest wave that is heading to places like India and beyond has never been experienced in the industry. No one can say where the domestic production will be in 5 years. pre pro sure, actual production - on the decline for sure. Unless we can find ways to maximize cost efficiencies without having starving artists suffer.

my 2 cents, for what's its worth.

Anonymous said...

LA is a friggin' dump though!

Too bad is the center of the universe when it come to animation....


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