Sunday, March 29, 2009

Overseas American Animated Feature

From time to time we discuss "Is It All Going to India?".

I keep saying no, it isn't. But of course, I'm no more a soothsayer than anybody else. I take what knowledge I have and make educated guesses.

Like any guesses, they could be wrong.

But since a commenter offered the prognostication that Southern California animation was going to go away in the next several years, let me tee up -- again -- the reasons why it won't ...

It's not just a matter of cost, you see. It's also a matter of producing a feature that will make lots of money at the box office. Thus far, that means "Do it stateside," because it does no good to create something for $30 million if all it makes if $40 mill. Much better to spend more money and grab at those hundred million grosses.

The reason that so much of the animation industry lives in California is: cartoon studios are here developing talent, which causes more studios to spring up, the better to partake of that talent, which causes more talent to grow here ...

And so on.

This is, after all, about talent that creates value, about critical mass and gravitational pull. Obviously that pull is tested all the time. In fact, it's being tested now. Currently there are two animated features scheduled for American releases that are being (mostly) produced overseas. One is Astro Boy from Imagi. The other is Despicable Me from Chris Meledandri's new studio Ilumination Entertainment, bankrolled by GE/Universal.

Now here's the nitty gritty: If Astro Boy hits a three of four bagger box office-wise, heads might look up in Hollywood's front offices, and small light bulbs might wink on. But it will take a sizable hit to make the wattage power up to where attention starts to be seriously paid.

Despicable Me is getting produced in France by Mac Guff Ligne. Why? Mac Guff has talent, and France has tax rebates. As Meledandri explains:

"I came to France because of the extraordinary talent of French artists working in animation," says Meledandri. "They have one of the very best animation schools in the world, Gobelins, as well as a great cultural tradition of animation."

But of course, there is also that tax thing:

... [T]hanks to the 20% tax rebate plan approved by the French parliament in December, foreign CG and toon producers doing business with Gallic houses will be able to seek tax breaks worth up to €4 million.

My best estimate is that both AB and DM will do respectably at the world box office. But neither will do the kind of jaw-dropping numbers that cause the Masters of the Cinema Universe to put down their I-phones and rejigger their business models in any large and meaningful way.

Naturally, I could be in error here, but it takes a long time to turn an ocean liner around. So too conventional wisdom about animation business practices. And it's going to take more than a brace of mega-hits from outside the U.S. to bring sizable change. Even those numbers might not be enough.


Anonymous said...

wishful thinking...

Anonymous said...

"Much better to spend more money and grab at those hundred million grosses."

Hmm...I disagree. There is no reason that any film should cost $80-100mm. There is so much waste that goes in the big studios.

What causes the big box office pay day is not the $100mm production budget. No, it is the marketing onslaught that these studios unleash on the public months in advance. Without that, these movies would flop.

I think $30mm is actually a sweet spot for a production budget, keeps the executives from sticking their thumbs in the pie and allows freedom to the director. And despite what people think...quality animation can be done for that much. You do that and adequately market said film...that is a recipe for massive success.

The whole, "we have to spend $80-100mm to have a block buster film" is a complete myth that the Hollywood machine has pumped out.

I mean just look at Aliens vs Monster this weekend. $165-170mm production budget and the film was dreadful. But they marketed the hell out of it starting months and months ago. And bam...#1.

Some smart studio is going to finally figure it out...and completely change the way current animated movies are made.

Anonymous said...

Isn't DreamWorks already animating their Madagascar Christmas Special in India. Pretty soon those animators will be all trained up and ready to work on Madagascar 3 or Monsters 2. Money is a huge motivator in Hollywood. Steve, you're burying your head in the sand.

Kevin Geiger said...

There's a whole range of territory in which films can be profitable without raking in monster grosses, if expenses are in line and overhead is low. If you analyze indie animated feature box office grosses and work backwards from there, you can derive a business model that works to the numbers. I blogged on this a while back:

...and am in the process of practicing what I preach here in China, with figures even more conservative than those presented in the blog post (including an 85% distributor take on DVD, etc...).

For example, if you could demonstrate the likelihood of a minimum 50% ROI to investors, would they care that it was "only" $7M of profit after their $14M capital was returned?

Bloated studios need consistent homeruns to stay afloat. There's room for the fleet of foot to create work that aims for "small victories" which are profitable and ensure subsequent production.

At least, that's the hope. ;-)


Steve Hulett said...

Personally, I think there's a wide variety of business models that would work fine.

The blockbuster model, which is coupled to high budgets and high overhead, I've always believed to be unsustainable over time.

But I have been consistently proven wrong.

Kevin Geiger said...

The blockbuster/bankbuster model will always be with us, and hooray for that! :-)

But what's really exciting right now is that there's ample territory to be mined by independent creators at price points that, while still in the millions, are at least conceivable.

The playing field may not be leveling, but there's room for pickup games. ;-)


Site Meter