Thursday, February 28, 2013

Business Models

Analysts have their say about DreamWorks Animation's down-sizing:

"They spend as if every movie they produce is a new 'Shrek,' but it's unreasonable to spend as if you are making big, big tentpoles when you really aren't," Vasily Karasyov, an analyst for Susquehanna Financial Group, which is a market maker in the securities of DreamWorks Animation, told TheWrap. "They need to cut production and releasing costs to make it less risky." ...

I've been strolling through DreamWorks Animation since it was housed in a building on the Universal lot, developing Prince of Egypt.

DWA has been a great studio, focused on product, working to do right by its employees. But over the years I've seen administrative staff grow top heavy, seen studio politics grow more intricate. The curse of the human animal is the proclivity to empire build and ferociously defend territory. Back-stabbing is always part of the game, whether it's Disney's Hyperion plant circa 1937, or Disney Feature Animation in the 1990s or DreamWorks Animation today.

And when a studio is successful with several hit movies, staff bloat becomes almost inevitable. From the 1980s to the mid 1990s, Disney Feature Animation went from three production staffers to 23 corporate Vice Presidents with an army of production managers/coordinators/ assistants in the lower ranks. For a board artist to see his director he had to schedule meeting time with administration, then pad back to his office or cubicle and wait for an e-mail detailing the date and time that an audience would take place.

Put any spin on it you like, this is bureaucracy run wild. And ludicrous.

DreamWorks Animation has never been in the Disney-Animation-amok-in-the-nineties category, but it spends more money on features than any animation studio this side of the Mouse Hose and Pixar. And when you're a stand-alone company that depends on cash flow and healthy profit margins to remain in business, you kind of narrow your strike zone by producing $150 million features that, after marketing, need a $500 million worldwide gross to go comfortably into the black.

Down-sizing and change at DreamWorks Animation has been in the cards for awhile, but I'm sorry it had to be this drastic so quickly, because employees are suffering.
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The next Afternoon of Remembrance...

... our annual memorial service, is coming up this Saturday, March 2, at the Hollywood Heritage Museum, on Highland Ave. across from the Hollywood Bowl.

Reception with refreshments starts at noon, memorials start at 1 pm.

A list of honorees is here.
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Guerrilla War

Now with Add On.

Innuendo and rumors, fueled by the trade press.

Growing anger in the struggling visual-effects community is raising concerns that some of its more extreme members could mount a cyber attack against a major vfx facility with the intention of damaging digital assets for one or more upcoming studio tentpoles.
At present, the evidence that such an offensive is in the works is slim but significant enough to prompt rumblings among vfx insiders regarding specific plans being in the offing.

If successful, a cyber attack that damaged or destroyed vfx assets could set back production by months, cost each pic affected tens of millions of dollars, and wreak havoc with release dates. Any vfx company that lost its studio assets would probably be out of business in short order, as it would never again be trusted with studio work.

Even an attack that only disrupted a company's internal network could slow production and add costs.

It's hard to know from which ass the above was extracted, but it's always good to invent threats out of thin air. As if studios weren't paranoid enough already.

As a CGI supervisor wrote yesterday:

This article dropped my jaw, not the least because it seems to be sourced entirely from rumor. But then, I forget that that's what the Hollywood press is paid to do.

Add On: The author of the Variety piece, David Cohen, now tweets:

There's an erroneous headline mentioning "artists," which I didn't write. Apologies to #vfx artists 4 that. ...

Ah yes. Kick them while they're on the ground in the fetal position. Most excellent.
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Wednesday, February 27, 2013

Lots of Animation ...

and lots of CGI, wrapped into hybrid packages.

Paramount said that the Teenage Mutant Ninja Turtles reboot, originally scheduled for wide release on May 16, 2014, will now open three weeks later, on June 6. For now, Teenage Mutant Ninja Turtles has the date to itself. It opens a week before Jurassic Park 4 (3D). ...

The turtles have been around in hand-drawn versions, men-in-rubber-suits versions, and CGI key-frame animation. This time around, it will be a wee bit different:

... The film will be a hybrid using real actors for the human roles and CGI motion-capture for the turtles themselves. ... So perhaps the delay is just an added post-production cushion to give the computer animators more than enough time to make sure this thing looks spectacular. ...

My question is: Where will the visual effects be done? Montreal? Vancouver? Or will Mozambique be offering big subsidies, causing Viacom to do the viz effx there? ...
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Lazy Portfolios

We're at the end of the month and hitting the deadline for 401(k) enrollments. So ... time for an article about how to out-perform Wall Street sharpies:

There are 95 million Main Street investors in America. Want to buy stocks? You have no choice. You gamble your hard-earned money, actively trading retirement money at Wall Street’s casinos. You can’t win. ...

Call it behavioral economics, brain science or just plain investor psychology, the fact is your brain is a brilliant computer, if you use it right. Most investors either don’t, or more likely, the Wall Street casino operators secretly hire thousands of high-priced behavioral-science experts who understand your brain’s quirky bias better that you. So they help traders develop super-sophisticated computer algorithms that are virtually impossible for Main Street investors to win.

Get it? Not only is the investor’s brain overloaded and prone to forget too much, but Wall Street casinos are sabotaging your brain’s computing system with viruses and malware so your brain can’t think straight. In fact, the vast majority are losers who can’t even beat an index fund.

As behavioral-finance guru Richard Thaler neatly put it: Wall Street casinos need investors “who are irrational, woefully uninformed, endowed with strange preferences, or for some other reason willing to hold overpriced assets.” Yes, the croupiers are constantly manipulating your mind.

Yes, the games are rigged, the cards are marked, the house always wins, and yet the great American spirit drives us. Of course you have to ignore study after study proving that the vast majority of investors believe they are one of the rare above average brains who can beat Wall Street casinos and market averages. ...

[Lazy Portfolios] are designed for the vast majority of Americans, because all eight portfolios involve no active trading. They really are perfect for passive investors who hate giving away a third of their money to Wall Street casinos. Rebalancing is done when you add new money to your portfolio.

Lazy Portfolios, long-term winners beating Wall Street casinos. ...

Warren Buffett currently has a bet going with some hotshot hedge fund managers: The S & P 500 index against their hedge funds. After five years, the index fund is winning:

It's halfway time in the 10-year stock market wager sometimes called The Million-Dollar Bet—that's Warren Buffett backing the performance of an S&P index fund vs. a New York money manager backing five funds of hedge funds—and there's double-barreled news.

Item One: For the first time since the bet started five years ago, Buffett has moved ahead—by an okay margin to boot.

Item Two: For the first time ever as well, both sides have crawled out of the ditch (though the funds of funds barely made it) and are showing positive results. ...

What does Buffett know? That hedge funds have high costs, index funds don't, and the vast majority of hedge fund managers aren't smart enough, or nimble enough, to make up the difference.

It's really simple math.

The closest thing the TAG 401(k) Plan has to "lazy portfolios" is a half dozen Vanguard Target Funds. These funds are inexpensive and broadly diversified across asset classes, and they do all the heavy lifting, automatically rebalancing the money that goes into them.

It's about as mindless a way to invest as any method I can think of. It's also about the most efficient.

Who says so? Warren Buffett.
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Tuesday, February 26, 2013

Don Jurwich @ Gallery 839, starts Friday

Don Jurwich's show at Gallery 839 opens Friday, March 1; reception from 5 to 9 pm at
1105 N. Hollywood Way in Burbank.

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Confirming The News ...

DreamWorks Animation has announced its fourth quarter 2012 and total 2012 earnings.

In the quarter, the Company reported total revenue of $264.7 million and a net loss of $82.7 million, or a loss of $0.98 per share. For the twelve months ended December 31, 2012, the Company reported total revenue of $749.8 million and a net loss of $36.4 million, or a loss of $0.43 per share. ...

Impacting DreamWorks Animation's fourth quarter and full-year 2012 results is a charge of approximately $165 million, which includes a write-down of film costs for Rise of the Guardians in the amount of $87 million, charges totaling $54 million related to the Company's decision to return Me & My Shadow back to development, a write-off of a number of other development projects in the amount of $20 million and a charge of $4.6 million related to restructuring activities.

Adding to which:

DreamWorks Animation will lay off approximately 350 employees, about 15 percent of its full-time staff, CEO Jeffrey Katzenberg and CFO Lewis Coleman said Tuesday during the company’s fourth-quarter-earnings call.

The Burbank, Calif.-based company posted a loss of $83 million in the fourth quarter of fiscal year 2012 due to development costs and the poor performance of its latest film, "Rise of the Guardians." ...

I spent the afternoon at DWA's Glendale campus and things are much as they've been for the last few weeks: empty desks, somber faces.

I spoke to a number of people for whom this is the last week of employment, giving them health coverage information, pension information, etc. It's never easy when there are big layoffs. I've been though a few before -- both as an axed employee and as a union representative -- and they are always sucky. I hate them.

-- Steve Hulett

Add On Too: Jeffrey Katzenberg addressed Rise of the Guardians weaker performance (along with other things) here:

... The audience response to Rise of the Guardians was strong, which is demonstrated by the fact that it delivered 4.2x multiple off of its opening weekend and also garnered and A cinema score rating. Still, Guardians did not reach the box office levels required of our film. ...

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The Big Boys have at last launched their anti-piracy internet warning system.

The entertainment’s industry new piracy warnings to computer users started flowing Monday as the industry and internet service providers finally launched their long-promised Copyright Alert System.

Announced in 2011 and originally set to begin by the end of 2012, the alert system is an effort by the movie, TV and recording industries and major cable providers to move much more swiftly to issue warnings whenever copyright owners discover that an account is being used to access or download pirated content. ...

Announced in 2011. These folks don't like to leap into anything too rapidly, do they?

Of course, trying to get new anti piracy laws through congress kind of blew up in Hollywood's face last year, as newer industries (Google, anyone?) had the leverage to stop old media's wish-list in its tracks.

This is a good step in the ongoing fight to protect copyright, but don't anybody kid themselves. The problem won't be solved by notices. Maybe, however, it will put a dent in the internet traffic.

More on the same subject here.
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Monday, February 25, 2013

TV Output In The Middle Kingdom

As insular as we are, we seldom hear about this:

Beijing was ranked 10th among Chinese cities in terms of animated TV productions in 2012, with an output of 23 animated TV series, reaching an overall 9,950 minutes, according to a statement recently released by the State Administration of Radio, Film and Television.

The ten Chinese cities producing the greatest number of animated TV series in 2012 are Suzhou, Guangzhou, Dongguan, Fuzhou, Hangzhou, Hefei, Wuxi, Shenzhen, Ningbo and Beijing. ...

The country yielded 395 animated TV series, totaling at 222,938 minutes in 2012, down 40 and 14.66 percent, respectively, year on year (the first drop since 2008).

China surpassed Japan to become the world's biggest animation producer in 2010, when it produced more than 220,000 minutes of animated TV series, signaling the country's effort in boosting its cultural sector. ...

The reason that our fine, entertainment conglomerates go apeshit over the Chinese market is that it's freaking huge, and growing. Nothing like expanding television and movie markets to make hearts in executive chests beat faster

DreamWorks Animation, Disney and other lust to break into the market because it's big and well worth their while. As Russia has become a big market for American cartoons and live-action, so has China. (And based on population China will ultimately put Russia in the shade.

None of this is lost on Americans who bankroll movie and television entertainment. They want to get their hands on the wallets of the residents of Moscow, Beijing and all the other municipalities in China and Russia. It's an old American custom that Americans are happy to export to the Middle Kingdom ... and other places.
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Bleeding the Creatives

The theme of the Oscars (first, last, and always) is "celebrate the winners." And the losers?

Ignore them.

The visual effects community sees red in the wake of Oscar protest and on-air snub

Is Hollywood paying attention? Because real trouble is on the horizon

... [T]he time to deal fairly with independent FX houses seems to have passed. With Disney's purchase of Lucasfilm and ILM with it, they've brought the two largest talent pools of state-of-the-art computer animation under one roof. Pixar and ILM aren't just part of the big leagues… they are the big leagues. And now they are all part of one brand, and I can guarantee when ILM is picking who works on what movies, the A-team, the absolute cream of the crop, will always be working on Disney projects first. That's great news for Marvel Studios. It's great news for anyone making a Disney film.

I think the 21st century is going to belong to companies that follow a model along the lines of what Hydraulx is doing. You don't have to like "Skyline" to admire what they're up to, or to see how canny it is as a template for how to make movies in this modern economy. They don't have an FX department… they are an FX company that also has a creative branch. They are developing material in-house, and they own their own cameras, their own post-production facility… they can go start to finish on whatever they want, and all they need is a few hits to make this really start to pay off. They can make movies for 1/10th of the budget of something and make it look the same. In many cases, passion on these smaller projects pushes people to work even harder than they do for the giant impersonal blockbuster stuff. "District 9" was a great example of a movie that felt like it was made by people with something to prove working outside the system.

I didn't watch the Oscars yesterday, but enough people were instantly outraged by the way the orchestra played off Bill Westenhofer, who won for "Life Of Pi," a movie that was impossible to make without the active participation of a team of FX artists working at the absolute peak of their craft. It's particularly galling that the FX guy, speaking about a protest that was happening outside that directly addresses the financial realities that are starting to damage the FX community in a way they may not be able to fully recover from, was cut short at a ceremony where they actually had a computer-animated character give away an award on live television. Ted was so successful an effect last night that my mother called me after the awards to ask me how they fit the midget into the suit. ...

But really, it's no big whoop that Mr. Westenhofer got the bum's rush from the Academy. It's been this way since that fine institution's beginning. Nobody who counts, you see, wants to talk about unseemly things like destroyed jobs and careers on Hollywood's Holy Night. It's all about designer gowns, artfully applied makeup and the Little Gold Man.

When Hollywood felt threatened during the black list era, it destroyed the careers of the commies and lefties to keep the power elites happy. And all the unions, from the IATSE to the WGA to the Directors Guild, went along cheerfully. As did the Academy of Motion Picture Arts and Sciences. Because it's about the folks at the top getting (and keeping) theirs. If a few innocent, hard-working bystanders get trampled, that's a price corporate chieftans are thrilled and happy to pay.

And what was the Academy doing during the bottom of the Depressions? In 1932 and 1933? It was cutting workers' salaries and defanging labor unions. For awhile there, the Academy tried to represent all the working stiffs in Hollywood as if it were a big, clubby, company union, but it was quickly obvious the Academy served other masters and the plan to keep everybody on a short leash under the Big Tent fell apart.

So the drowning out of bad news with the theme song from Jaws? Right in line with seventy years of Tinsel Town history.
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An afternoon of remembrance

The Animation Guild, ASIFA Hollywood and Women In Animation present

Saturday, March 2, 2013
Food and refreshments, noon
Memoriams, 1 pm

Hollywood Heritage Museum (Lasky-DeMille Barn)
2100 N. Highland (across from Hollywood Bowl), Hollywood

A non-denominational celebration of departed friends from our animation community:
  • Frank Andrina
  • Charlotte Armstrong
  • Dick Beals
  • Iris Beckerman
  • Lucille Bliss
  • Carmela Blitz
  • Dave Borthwick
  • Jack Bosson
  • Grigor Boyadjiev
  • Richard ”Kip” Carpenter
  • Ernie Chan
  • Kristine ”Casey” Clayton
  • John Coates
  • Franco Cristofani
  • Tissa David
  • Jim Duffy
  • Jake Eberts
  • Ethel Falkenberg
  • Ann Gefre
  • Jean ”Moebius” Giraud
  • Karen Greslie
  • Dave Hanan
  • Jim Hiltz
  • Daphne Huntington
  • Diane Keener
  • Fyodor Khitruk
  • Thomas Kinkade
  • Peter Kranjcevich
  • Joe Kubert
  • Bob Lambert
  • Ken Landau
  • Maxine Markota
  • Nancy McCullough
  • Rusty Mills
  • Sheldon Moldoff
  • Conne Morgan
  • Mark Nelson
  • Margaret Nichols
  • Naomi O’Loughlin
  • Rod Parkes
  • Bretislav Pojar
  • Buzz Potamkin
  • Al Rio
  • Geri Rochon
  • Ken Sansom
  • Mary Sarbry
  • Bruce Schaefer
  • Maurice Sendak
  • Mel Shaw
  • Robert Sherman
  • José Silverio
  • Marcia Sinclair
  • Dan Thompson
  • Ken Walker
  • Manon Washburn
  • Tom Woodington
  • Run Wrake
  • Uvon Young

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Sunday, February 24, 2013

Best Visual Effects

Here the winner is Life of Pi.

Which has a kind of ironic symmetry to it, since a lot of the artists who worked on it were out in front of the Oscars, demonstrating.

At least Rhythm and Hues (and its plight) got a mention before they moved the proceedings along.
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Best Animated Feature

... turns out to be Brave.

Could have fooled me.

Happy to see that Brenda C. upon the stage for her Oscar.
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Best Animated Short

... is Paperman.

Figured it was the odds-on favorite. But you never know. Click here to read entire post

Hitting the Street

Hundreds of VFX artists turned out on Hollywood Blvd. (ahead of the Oscar festivities) this afternoon. Apparently there is a wee bit of anger over how they're being f*cked with by Our Fine Entertainment Conglomerates. ...

As a foreign publication noted:

... Several hundred people reportedly congregated outside the Dolby theatre in Los Angeles as the stars walked the red carpet, demanding better treatment for the artists who make the spectacular visuals for blockbuster movies possible. The protest was planned after the well-known Rhythm & Hues effects house filed for Chapter 11 bankruptcy last week, shortly after winning a Bafta for its work on Life of Pi. ...

[A] chartered plane has been circling overhead towing a banner with the protest slogan: "Box Office + Bankrupt = Visual Effects" ...

Add On: How much media coverage the demonstration gets, I donno. But Deadline writes of it here, and Variety here:

The Oscars are no stranger to protests, both on the podium and on the surrounding streets, but Sunday's street rally of visual effects artists was unlike any other.

It's a running joke in vfx circles that its workers rarely see the sun due to their long hours in front of computers, but they were out at Hollywood and Vine on Sunday, some 200 of them sporting greenscreen ribbons and carrying signs saying "Respect for vfx" and "We want a piece of the Pi" ...
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Overseas Derby

While Bruce remains atop the b.o. heap at number one, there is this:

Wreck-It Ralph ... generated $8 million this past weekend on the foreign circuit, lifting the film’s foreign cume to $241.5 million and the worldwide total to $428.2 million.

As for other foreign and worldwide grosses:

Foreign/Worldwide Grosses
Ted -- $321 million/$539.8 million
Wreck-It Ralph -- $241.5 million/$428.2 million
Rise of the Guardians -- $200.3 million/$302.3 million
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Saturday, February 23, 2013

Secret is Out

From the interwebs.

Big Hero 6, the forthcoming animated feature film by Marvel Studios and Disney Animation, will hit theaters in the fall of 2014, according to Rentrak, a company that works regularly with studios in Hollywood and around the world.

They tweeted the release date (in Spain) as November 21, 2014 ...

I got tipped off awhile ago that BH6 would be going into full bore production later this year, but was told to keep my mouth buttoned.

No need to do that now. Some other entity is blabbing. (Besides, people new this movie was in work. Was it really much of a secret?)
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You Think?

The Wall Street Journal (Rupert's paper) states the obvious. Again.

Hollywood studios ready to make a movie typically solicit bids from visual effects shops like Rhythm, Digital Domain, Sony Pictures Imageworks, and Industrial Light & Magic (recently acquired by Walt Disney Co. as part of its purchase of Lucasfilm Ltd.), which attempt to complete the job for less than they're paid.

That approach has never generated robust profits.

"A good year for us was a 5% return," said Scott Ross, who co-founded Digital Domain

The business model of putting the effects work for a major motion picture out to bid has been around since the freaking nineties. It's much like throwing chum into a shark tank, much gnoshing and general savagery occur.

Making visual effects a sub-contract jpb separate from the actual shooting of the movie was a recipe for disaster then, and it remains bad news now. Except today you have our fine, entertainment conglomerates gobbling up tax dollars thrown at them from different states and countries, so margins wither away even more if effects work remains in town.

And what happens when the tax payers to the North stage a revolt and the Canadian subsidies disappear? What then?

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The Box Office

Now with Add On.

... and your weekend horse race.

The domestic box office continued to see lackluster results on Friday as new action-thriller Snitch narrowly beat holdover comedy Identity Thief with $4.14 million. ...

The domestic box office continued to see lackluster results on Friday as new action-thriller Snitch narrowly beat holdover comedy Identity Thief with $4.14 million. ...

Bruce Willis action pic A Good Day to Die Hard tumbled 61 percent to No. 5 with $2.8 million ...

And Escape from Planet Earth held on at #6 while collecting $2,354,000.

Add On: Escape from Planet Earth declined less than any picture in the Top Five, landing at #3. Its accumulation is now $35.1 million and looks as thought it will make some bucks for the Weinstein brothers. Other animated titles:

Domestic/Foreign Animation Grosses

Wreck-It Ralph -- $186.7 million/$428.2 million
Rise of the Guardians -- $102.7 million/302.3 million
Ted -- $218.8 million/$539.8 million
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Friday, February 22, 2013


The visual effects community is getting fed up (big surprise, what with the shutdowns and reduced pay and no pay at all.)

Therefore ...

The visual-effects community is planning a demonstration during Sunday's Academy Awards ...

Many in that VFX world argue that effects houses are struggling because of a business model that doesn't work, and they point to Rhythm & Hues Studios -- the VFX house behind the CG tiger in Oscar-nominated Life of Pi -- and the fact that it filed for Chapter 11 bankruptcy protection on Feb. 13 as the latest evidence.

A small plane with a banner that reads "Box Office + Bankrupt = Visual Effects" will fly over the red carpet on Sunday, according to the demonstration's organizers. ...

Dave Rand, an artist at Rhythm & Hues, said the aim of the effort is “awareness. We are not disrespecting Life of Pi or Rhythm & Hues. We are trying to enlighten the studios that they are taking their racehorse and beating it to death.” ...

Respect, of late, flows only one way. And it isn't in the direction of the people who create the images and do the animation that undergird studio blockbusters.

I'm in total sympathy and alignment for what VFX artists are doing. They work long hours, their pay ain't going up, and pension and comprehensive health benefits are (more and more) abstract concepts.

And our fine, entertainment conglomerates don't particularly care. In fact, most are too busy chasing government subsidies north of the Canadian border to give the problem much thought or attention.

As one exec once said of a similar group: "They're our lettuce pickers, our wrists."

You don't get respect until you demand respect.
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Say What?

Wouldn't this be filed under "Old News?"

... FOX dedicates two and half hours of primetime to animated shows. Adult Swim has created an entire channel built almost entirely on animated shows for viewers 18-35. Seth McFarlane, a writer and producer famous exclusively for voice work and animated programs, is hosting the Oscars this weekend.

All this being said, variations on the phrase “animation is for children” or “I’m too old for an animated show” are still common in the conversations of viewers across the television landscape. I would hope most college age readers of this column know better ...

I'd think that the above has been obvious for awhile.

Still in all, most conglomerates not named "News Corp." continue to shy away from prime time animation, though all have jumped into theatrical animation to a greater or lesser extent.

I think that many companies are catching onto the fact that CGI is a must in the theatrical realm, but not necessarily useful on television. CG shows don't perform better than hand-drawn shows, and some corporations have caught on to this. And it's a reason not to do CG tv shows, since they're more expensive, and ratings are not goosed.

Whether this will change over time, I do not know.
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Launching The Croods

The articles and tub-thumping commence.

... As the credits began to roll for this out-of-competition screening [for DWA's The Croods], an audience of 2000 got to its feet and began to applaud wildly for this silly, sweet yet surprisingly sophisticated animated feature.

And while all the DWA & Fox [execs] who were on hand for the world premiere of The Croods were thrilled with the reception that this new feature-length cartoon received, no one was more excited -- or more relieved -- than the film's two directors, Chris Sanders and Kirk Di Micco. ...

[W]hat pleased Kirk and Chris the most, what made them feel that all of those years which they'd spent reworking this movie's story had ultimately been worth it, was the reaction that the audience in Berlin had to what happens in Act 3. Which is when (SLIGHT SPOILERS AHEAD) this animated feature makes a deft left turn. Transforming from a broad comic adventure which is loaded with slapstick to this sweet & sincere story where our caveman family is suddenly faced with some very real peril. And one member of this comical clan has to make a pretty huge sacrifice.

"We actually built this movie around that moment," Kirk explained. ...

A rapturous reception at the Berlin film festival doesn't guarantee stellar box office, but it certainly bodes well ...

The reviews that have so far trickled out are positive with caveats ("It's entertaining, but ...")

Beyond clips and trailers, I have seen little of the feature, so my crystal ball is cloudy. But from early impressions, the picture is in the comedy and action mode that has made Madagascar and Kung Fu Panda sustainable franchises, and this film might follow down the same path because ...

-- Character comedy with lots of visual humor plays well worldwide.

-- Ice Age, another prehistoric comedy, has raked in major bucks.

-- Chris Sanders has had a strong track record over twenty years.

-- The Croods seems more in the middle of DreamWorks Animation's usual strike zone than Rise of the Guardians was.

However, the usual "on the other hands" apply: Maybe The Croods has the wrong release window. (Disney's Bolt was released the same weekend as the first Twilight, a serious error.) Maybe word of mouth will be tepid. Maybe the character designs are off-putting. (Some folks have complained about the "ugly" cave people, that Chris Sanders's early renderings were better, etc. etc.)

None of the above will matter is the picture is a hit. All of the above will be dragged out and pinned to the corpse if DreamWorks Animation's latest offering under-performs. We'll just have to wait a month and see what happens.

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Thursday, February 21, 2013

Free ... Free! ... FREE!!

As the visual effects industry reels, a solution is found:

“Beasts” is up for four Oscars, including Best Picture – a coup for a film made on a shoestring $1.5 million budget. ... Students worked from 10 to 40 hours a week as part of the academy’s “Compositing in Production” class dubbed Studio 400A, an advanced elective wherein students offer free visual-effects work for low-budget films.

“Finding out about this class was a revelation in an industry geared towards ‘Iron Man 3′ and ‘The Avengers’,” said Mr. Penn. Big-name visual-effects houses didn’t even want to talk to us, he said, let alone offer a price quote. ...

With visual-effects work more frequently being outsourced to China and India, the class creates a rare real-world opportunity for students to work with a lean pipeline of producers and editors.

From enhancing explosions to layering garbage onto surging water, Academy of Art students worked on 85 of 120 shots in “Beasts.” ...

Tonight I saw a news report that 71% of the population is in favor of raising the minimum wage to $9 per hour. So it's heart-warming to see an industry that is marching in the opposite direction.

Work for FREE! Make other people money!!
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Our Fine Entertainment Conglomerates

Metacritic gives details about OFECs health and well-being:

... Collectively, it was a good 12 months for the movie industry after a couple of down years in which revenues and attendance were in decline. Total domestic box office grosses were up over 6% in 2012 (to a record $10.83 billion), while the number of tickets sold also increased by a similar percentage after falling to a 16-year low the year before. Last year actually saw the largest year-over-year percentage increase in theater attendance since 1998, though total tickets sold fell well short of the all-time record set in 2002.

Globally, while the combined grosses of the six major studios fell slightly compared to 2011's all-time record high, the results were still strong, with four of the studios surpassing the $2 billion mark. And three separate 2012 movies each collected over $1 billion worldwide, matching the record set the year before.

With overall numbers like those, it's not surprising that four of the six major distributors were able to grow their domestic business in 2012 compared to the year before. Leading the way was Sony, the year's overall leader in market share thanks to a 41% increase in domestic grosses and an even bigger increase in foreign markets. At the other end of the spectrum was Paramount, 2011's market share leader. That studio plummeted to last place in 2012 thanks to a disastrous performance in all markets that saw Paramount collecting less than half of its previous year's revenues.

Paramount/viacom sank to the bottom of the tank, while Sony surged to the top. One interesting factoid: Disney had the highest average domestic gross for its domestic theatrical releases. The Big Six were as follows:

Average Domestic Grosses -- 2012

Disney -- $119.8 million
Warner Bros. $100.2 million
Sony Pictures -- $96.2 million
Universal -- $88.8 million
20th Century Fox -- $66.5 million
Paramount -- $62.8 million

It's good to see who's up and who's down, because it varies year-to-year. But cash flow for OFECs seem to be robust. (A pity we can't say the same for various animation and visual effects houses. But then the moolah is never spread around based on purity of heart. It's always juice and leverage that pulls in the big bucks.)
Click here to read entire post

Wednesday, February 20, 2013

At the Studios

The last two days of studio rounds have been kind of Ying and Yang.

Today I was at the DreamWorks campus, attending a CG artist's exit interview (at his request. Thereafter, I walked around the Lakeside building. Morale on the lower production floors is a wee bit dark. Lots of empty desks and somber faces. Up in the story department (the upper floors of Lakeside) the mood is brighter. There a staffer said to me:

People wonder how The Croods feature is going to do. Management has told us that the artists in the story department are safe, but I rode up in the elevator with a director who wouldn't give me eye contact. ...

And yet Wall Street is hopeful:

DreamWorks Animation (NYSE: DWA) was upgraded by Zacks from an “underperform” rating to a “neutral” rating in a report issued on Wednesday. The firm currently has a $18.10 target price on the stock.

DreamWorks Animation traded down 0.62% on Wednesday, hitting $17.50. DreamWorks Animation has a 1-year low of $15.90 and a 1-year high of $22.98. The stock’s 50-day moving average is currently $16.88. The company has a market cap of $1.476 billion and a price-to-earnings ratio of 21.48. ...

I think one of our fine, entertainment conglomerates would be delighted to pick up DreamWorks Animation (and its library) for $1.476 billion. But I think the principals and owners would like a little more money than that.

Yesterday I was at Walt Disney Animation Studios, across the Burbank city line, and the atmosphere is more upbeat. John Lasseter was at the studio for a screening of Frozen at the theater on the first floor, and production is moving ahead. And the smart money is laying odds that, on Sunday, the animation division will walk away with a brace of Little Gold Men:

The Walt Disney toon factory used to own Best Animated Short, taking 10 of the first 11 races beginning in 1932. Since that streak ended in 1942, it's won only three times, the most recent being in 1969 for "It's Tough to be a Bird." That dry spell could be over this year as it has the leading entry. However, another studio backed short could still play spoiler.

This black and white film fuses traditional hand-drawn animation with vector-based CG to tell a tale of lost love. A young man meets a beautiful woman while on his way to work. After spotting her again during his work day, he decides to do whatever he can to get her attention.
This Disney produced short by first-time nominee John Kahrs screened before “Wreck-It Ralph.” The choice of 14 of our 22 experts as well as four of our seven editors and 80% of users, it has leading odds of 17/10. ...

The newest Disney feature also looks good for a shiny statue:

"Wreck-It Ralph"
Disney's film leads a close race with 15/8 odds. 20 out of 26 experts, five out of nine editors, and 51% of users predict it will win. ...

Only one thing is certain, since DreamWorks Animation has no nominees this year, it won't be taking home a prize.
Click here to read entire post

Reel FX Ramps Up

... as others ramp down.

Reel FX has brought on "9" director Shane Acker to helm an animated feature based on Dark Horse comic series "Beasts of Burden."

Original story takes place in a town whose local dogs keep watch and protect citizens from supernatural dangers. ...

Reel FX, home-based in Dallas, Texas, has been a growing presence in animation and has a development studio in Santa Monica. A few weeks ago it brought Aaron Warner on as animation chief, so its expansion shouldn't be a surprise. Click here to read entire post

Tuesday, February 19, 2013

Chasing Other Opportunities

From Nikkster's site.

Jennifer Howell, head of 20th Century Fox TV‘s animation department, is leaving the studio to pursue other opportunities. I hear her contract is up in May and is not being renewed. Howell has headed the department since 20th TV created it in 2008. The series developed on her watch include Fox’s Bob’s Burgers, the recently picked up Murder Police as well as Napoleon Dynamite and Allen Gregory. 20th Century Fox TV chairmen Dana Walden and Gary Newman are expected to find a replacement.

Additionally, Howell ran the joint Fox/20th TV Fox Inkubation initiative focused on breaking new animation talent by evaluating potential toon series through fully-formed 2-minute shorts rather than by traditional script development. The program, also started in 2008, developed a number of projects though none got on the air. It was dissolved last year. ...

Ms. Howell appears to have had a so-so batting average at FA.

Bob's Burgers remains on the air, but Fox Inkubation initiative sounds as though it was a short-lived clone of Fred Seibert's animation development programs at Hanna-Barbera and Nick, (wherein a lot of pitches are made, then a lot of shorts produced ... with all of them making their way to broadcast and the pick of the litter going on to series.)

But apparently sufficient cartoon triumphs did not happen, and Jennifer will be moving on. We wish her well with her future endeavors.
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Number One?

This is interesting. Escape From Planet Earth, an animated feature that is getting a boatload of unkind reviews, finished Monday at

Numero Uno -- Top of the Box Office Heap

The feature bested Fox's latest Die Hard actioner by taking in $5,210,921 (a drop of 5.4%) to the Willis picture's $3,805,812. (Its decline was 49%.)

I think the Weinstein brothers, based on Escape's performance, will very likely stay in the animation business.
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Tipping Point

Variety tells us:

... [In] the visual effects realm there was a "big four" of vfx companies: Industrial Light & Magic, Digital Domain, Rhythm & Hues Studios and Sony Pictures Imageworks. Two of those, DD and R&H, have gone bankrupt in the last six months and the other two are studio-owned, which doesn't assure their future but assures they won't miss payroll.

You could see DD and R&H as sort of a canary in the coal mine for the state of the vfx business. But I think the vfx business is the canary in the coal mine for the studios' movie business -- especially the tentpole business. ...

Financial stress is widespread and growing among vfx companies. A studio vfx exec recently told me of another vfx studio, not in the U.S., that had to be bailed out last summer. Days later a vfx exec at a California vfx shop told me of having to bail out a smaller subcontractor facility that ran out of cash before it could deliver.

A former topper of another "big" vfx studio, who is now out of the vfx business, called me to point the finger at the studios.

"They know what our margins are and they won't let us make any money," he said.

He cited one vfx-Oscar-nommed tentpole his company worked on with another "big" shop, saying the director made probably $50 million but neither vfx company made a penny of profit. Such imbalances seem common. ...

It's a truism of tax policy that if you want less of something, tax it, and if you want more of something, subsidize it. But there is already more vfx capacity than work. ...

Fourteen years ago, I sat in a conference room at the Disney Co. and helped negotiate a visual effects contract for a new Disney effects studio called "The Secret Lab" (named for the villain's secret lab in The Emperor's New Groove.) The whole time I was sitting there, I was thinking this:

"Why is Disney negotiating this deal for an effect studio inside an animation studio? Warners Digital Effects Studio went out of business because it cost them more than subbing the work out; Sony ImageWorks makes little to no money, so how does Disney expect to do it?

"I bet in two or three years they close the place, just the way Warners did."

I wasn't off by much. In three and a half years The Secret Lab was as extinct as the passenger pigeon. And Disney was (again) subbing its effects work out, even as the Disney Animation Studio -- now under the Secret Lab contract -- marched steadily on.

At the end of the nineties, it wasn't profitable for studios to be in the effects business. A decade and a half further on, it isn't profitable for any entity to be in the effects business. And it's certainly become miserable for lots of visual effects artists.

The rolling disaster is now becoming even more distorted with countries, provinces and states flinging dollars at visual effects work the way apes fling shit in a zoo. And it probably won't stop until the implosion of the current effects business model ("Do it at a loss.") is total and complete.

At that point, there is the slimmest of chances that effects crews will become part of the production crew, because that will be the only way that high-end CG artists will be able to make a living as they create the effects work on which studios and their "blockbusters" have come to depend.

Industry veteran Dave Rand shares his views with the former British Columbia Film Commissioner at this link:

Click here to read entire post

Monday, February 18, 2013

Mr. Lee's Sorrow

Ang Lee makes his feelings known.

Reacting to the news that the visual effects house Rhythm & Hues, Oscar-nominated for Life of Pi, has filed for Chapter 11 bankruptcy, director Ang Lee said he is “very sad.” ...

“I would like it to be cheaper and not a tough business [for VFX vendors]. It’s easy for me to say, but it’s very tough. It’s very hard for them to make money. The research and development is so expensive; that is a big burden for every house. They all have good times and hard times, and in the tough times, some may not [survive]."

He continued, “I hope somehow, two things: It gets to be an easier business, cheaper, and more people can put their hands on it. Secondly, I would like to see it be used more of as an artistic form than just effects for action.” ...

Visual effects studios have had the problem of keeping their heads above the crashing waves for twenty years. The way the business is structured -- with conglomerates tossing VFX sub-contractors long knives to fight it out for the jobs -- is great for the major studios, but crappy for everybody else.

And now countries and states have gotten into the knife fight, using taxpayer dollars to subsidize effects for the film franchises of Fox, Time-Warner and the rest of the conglomerates. (It's kind of like mailing Warren Buffett welfare checks, but there it is.)
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An Extra Base Hit

So DreamWorks Animation's Last Big Movie underperformed, and the press wonders if animated features are getting a wee bit tired and wearing out their welcome. ... But then the Weinsteins, after years of failure, hit themselves a solid double in the middle of February.

... [P]opping up in fourth place, with a surprisingly strong $16.1 million, was a 3D cartoon that seemed to have come out of nowhere, "Escape From Planet Earth." Here's a kids' film that's not based on a familiar title or franchise, one without A-list stars in the leads, made by off-brand animators (Rainmaker Entertainment, which had never made a theatrical feature before) for an indie studio (The Weinstein Company), with marketing below the radar, no screenings for critics, and a nasty stench from the legal battle that kept the movie out of theaters for two years. Plus, the alien-invasion premise recalled last year's biggest animated flop, "Mars Needs Moms." In short, "Escape" seemed like the kind of unwanted picture that studios dump into theaters in the dead of winter when no one will notice. Certainly no one expected it to open in the upper teens.

So what's behind the surprising success of "Escape From Planet Earth"? Here are some galactic guesses:

Timing is everything. Yes, February is a box office dead zone, but it also has turned out to be a month sorely in need of a family-friendly movie. In fact, there really haven't been any since the start of 2013, a year marked so far by R-rated action fare, horror, teen romance, and Oscar-bait dramas. There's been nothing for kids, especially kids under 10, so "Escape" had the marketplace all to itself. And parents were apparently so happy to have something to take their kids to see that they even ponied up for the 3D surcharge, adding even more to the film's take.

[And] an original premise isn't a bad thing. ...

Here's a musty secret: The trailer for Escape From Planet Earth has been in theaters a good while now. I know this because I've seen the trailer for a good while. And the trailer always played well and got positive audience reaction. (There were usually other animated trailers; Escape got more pleasurable noises from the people in the seats.)

Audience response to a preview isn't necessarily a big predictor of audience attendance, but the trailer indicated a DreamWorks AnimationBlue Sky Studios kind of experience, and I think the trailer -- at the end of the looong preview cycle -- helped get fannies in the seats.

In any event, $16 million earned by a picture for which nobody had high expectations is pretty impressive. And no Big Star voices either! (Who would have imagined?)
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Straight-Ahead Animation

The Avengers effects Supe Jeff White sayeth:

... Any time you see The Hulk, he’s computer-generated. For most of the shots where he’s giving a performance, maybe it’s dialogue, or interaction with another character, that’s Motion Capture. Anytime he’s doing something that’s completely out of the realm of physicality for Mark, where he’s jumping from building-to-building, that’s straight-ahead Key Frame Animation. ...

Whether it's an "animated feature" or not, in the widening realm of big budget, effects-laden super hero/werewolf/vampire movies, there is lots of animation.

And even though the visual effects industry is going through upheaval and major restructuring, the need for high-end visual effects and creature animation rockets upward.

Motion capture ("the devil's rotoscope") has been a bust as a stand-alone technology (kindly note Tin-Tin and Mars Needs Moms.) But as an adjunct to live action in epics like Avatar or Rise of the Planet of the Apes, it's been a roaring success. Yet even there, the "mo cap" characters are not puppets that overlay an actor's performance. Most have key-frame animation that undergirds the motion capture.
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Sunday, February 17, 2013


... and erasing the past.

Remember the “Tom and Jerry” adventure in which Tom emerges from a pile of coal and then tries to fool maid Mamie Two Shoes into thinking he’s an entirely different cat by shuckin’ and jivin’ his way across the lawn? Or how about when Tom blows cigar smoke into Jerry’s face, slaps an oversized bow tie on him and drops him onto a sizzling-hot plate, forcing the mouse into a Mr. Bojangles routine?

Doesn’t ring any bells? Well, that’s how Hollywood wants it. ...

Disney still refuses to release "Song of the South" on home video to U.S. audiences. ... Disney historian Jim Korkis believes the studio, fearing a severe backlash in the States, is more interested in protecting its image than protecting youngsters. ...

This ain't about protecting delicate sensibilities. The movies are withheld to prop up profit margins. Diz Co. has no problem, after all, in releasing Song of the South in foreign markets. Beyond our shores, it's anything for a smooth buck. Here, it's about protecting the brand and not triggering angry, letter-writing campaigns that might depress attendance in theaters and amusement parks, or lower the public's desire to buy plush toys.

As I've noted before, if you want racial stereotyping, Gone with the Wind offers a much stronger dose of cringe-inducing racism than Song of the South. But GWTW is a bonafide blockbuster. Moreover, it was jointly created by M-G-M and Selznick International, two movie brands that are pretty much kaput as far as the general public is concerned. There is no "corporate image" to protect.

At least, that seems to be the attitude of Time-Warner, the current owner of the title, and TW has no reticence about rolling out Blu-Rays and "Collectors Editions" for the Selznick picture, because there are plenty of eager, willing eyeballs out there, so who cares if Butterfly McQueen is over-the-top in the "hysterical black houseworker" department? Commerce is commerce.

Me, I think our live-action and cartoon history should be out and readily available. And if big corporations need to give either format more context, then by all means let them do so. Teaching the way the country and popular culture actually were once upon a time is a good thing.
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Your International B.O.

Big Bruce is Numero Uno, but Wreck-It Ralph is no slouch.

... 20th Century Fox’s A Good Day To Die Hard easily captured the No. 1 box office spot overseas, grossing $61.5 million – the year’s biggest foreign opening tally thus far – at 9,595 locations in 63 markets, and moving its early foreign cume to $80.1 million. ...

Ranking No. 2 in second round in the U.K. was Disney’s animation title Wreck-It Ralph, which grossed an estimated $6 million in the market at 549 locations. That propelled the total weekend take to $11.5 in 68 territories. Ralph has now crossed the $400-million mark in worldwide box office ($411.2 million), and has tallied an international cume of $225.6 million. ...

Challenging Django Unchained for the No. 1 slot in France was Sony Animation’s Hotel Transylvania, which has resurfaced late in its foreign run (begun Sept. 27). Openings in France ($3.17 million at 588 spots) and in French-speaking Switzerland generated a total of $3.8 million from some 620 spots, moving the animation title’s offshore cume to $184.3 million.

...[And then there is] DreamWorks/Paramount’s Rise of the Guardians, $200.3 million; Universal’s Ted, $316.6 million ...

A week ago a DreamWorks artist said that animated features just weren't pulling the grosses they were a couple of years ago. I responded that it depended on the feature. I mean, one DWA under-performer doesn't mark a trend. And certainly Sony's most recent feature has out-performed other movies from the Sony Pictures Imageworks stable.

Worldwide Box Office

Hotel Transylvania (Sony) -- $332,451,975
Rise of the Guardians (DWA) -- $301,669,000
Wreck-It Ralph (Disney) -- $411,145,000

Compare these totals with the preceding releases from Disney/Pixar, DreamWorks Animation, and Sony:

Arthur Christmas(Sony) -- $147,419,472
Brave -- $535,383,207
Madagascare 3: Europe's Most Wanted -- $742,110,251

Squint your eyes, and I guess you could argue a lowering trendline, yet I'd still argue that it's the individual movie to which audiences respond. Wreck-it Ralph is still unspooling overseas, and it grossed 185.5 million domestically.

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Saturday, February 16, 2013

Cartoonish Linkage

The long-neglected linkfest.

The artistry of Escape from Planet Earth analyzed.

Tim Burton speaks (of Frankenweenie.)

Will Netflix be rescuing DreamWorks Animation?

The Global Animation Report: a retelling of the obvious.

Ralph Bakshi rustles up money for a new cartoon short.

A new Batman Interactive Video Game? Created in Montreal with all those tax subsidies?

Also, too, the video game industry closes studios.

You will (hopefully) find something above of interest. Click here to read entire post

Your American (and Canadian) Box Office

A new weekend, a new group of movies collecting coin.

Over the past two days at the box office, Safe Haven at $16 million has slightly outgrossed A Good Day to Die Hard’s $15.5 million. The $28 million Relativity romance topped the chart on Valentine’s Day with $8.8 million, while Fox’s fifth Die Hard, which was financed for $92 million, earned $8.2 million. On Friday, the two films swapped places, though they each earned about $7.2 million, putting them each on pace for $27 million four-day weekends and about $35 million after five days. ...

Escape From Planet Earth the Weinstein brothers' animated feature which is mired in litigation, hasn't gotten many media ad buys but it's in a hell of a lot of theatres (and I have seen a lot of trailers for it at my local Bijou). the picture clings to the fourth rung of the Box Office Ten.

Friday Box Office

1) A Good Day to Die Hard -- $7,225,000
2) Safe Haven -- $7,150,000
3) Identity Thief -- $6,500,000
4) Escape from Planet Earth -- $3,702,000
5) Warm Bodies -- $2,600,000 ...

Add On:

A Good Day to Die Hard opened in first place over Presidents Day weekend, though it was overshadowed to some extent by strong runner-up performances from Safe Haven and Escape From Planet Earth. Meanwhile, Beautiful Creatures was such a huge miss that it could temporarily quell the post-Twilight young adult adaptation craze.

For the four-day holiday weekend, the Top 12 grossed an estimated $143.5 million, which is off around 16 percent from the same period last year. Overall, the month of February is on pace to wind up significantly off from last year's record-setting $818.2 million gross. ...

Click here to read entire post

Friday, February 15, 2013

Life Line

Amidst the lawsuits, the layoffs, the thumping from Warner Bros., a candle flickers in the darkness.

A federal judge approved a $17-million loan from two movie studios to keep the lights on at troubled Rhythm & Hues ...

Rhythm & Hues cited several factors, including a decrease in film production at Fox and Universal -- historically two of its largest customers – as well as rising competition from rivals in Canada, Britain, Australia and New Zealand.

The company added that higher labor costs in Los Angeles, such as the requirement to pay overtime, also contributed to its financial woes. At the end of 2012, the company had assets of $27 million and liabilities of $33.8 million. ...

So are we clear? All that nasty overtime was what sent the company reeling. The big, fat subsidies in Vancouver and Montreal probably didn't help either, but the TIMES describes those as "competition."

The truth is, our fine, entertainment conglomerates are like most other entities on the globe. They want quality things, but they want somebody else to pay for them. In the case of movie companies, they desire high-end effects, and if they can get a country or state to pick up most of the tab for making the effects, they're totally down with that.

Free enterprise now, free enterprise forever.
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Employee Push Back

The down-trodden strike back:

A fired Rhythm & Hues employee is suing the bankrupt visual-effects company for unpaid wages and benefits on behalf of the more than 250 people in California who were laid off this week.

The suit was filed in California bankruptcy court by Anthony Barcelo, who worked as a compositing technical director at the company's El Segundo, Calif. office. ...

"The employees were given no notice that this was coming, which would have allowed them to make a soft landing," said René S. Roupinian, an attorney for the plaintiff. "Mr. Barcelo asked for and received notices at several points that his job was secure, so he feels particularly betrayed. He is in dire financial straits, and he has a family to support." ...

On a related note, I spent most of the afternoon at DreamWorks Animation, going from one "See ya, bye" meeting to another. (A lot of employees were having their "exit interviews" today, and several asked me to be in attendance.)

After that I went through the DWA Lakeside building talking to people who had been pink-slipped about how long health benefits will last (for most, 12 to 14 months), who's vested in the Motion Picture Industry Pension, what companies are out there hiring, small but helpful things like that. I was stopped in Lakeside building halls a lot.

I'd describe the mood at DWA as one of glum resignation. But departing employees are getting X number of weeks of additional wages as they go out the door. The amount varies depending on A) the show they were working on and B) the term in their personal contracts.

That's at least a small sliver of light during a dark time in the industry.
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William Watts Biggers, 1929-2013

The co-creator of the Underdog TV series has died.
Family friend Derek Tague says Biggers, who went by “Buck,” died unexpectedly at his Plymouth, Mass., home on Sunday, Feb. 10, 2013. The native of Avondale Estates, Ga., worked for the New York City advertising firm DFS when he accepted an assignment from the agency's largest client, General Mills, to create television cartoons to promote its breakfast cereals. The most famous was “Underdog,” which debuted on NBC in 1964.
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Thursday, February 14, 2013

Kick Them While They're Horizontal

At least one of our fine, entertainment conglomerates is showing R & H no mercy.

... Fox and Universal agreed to extend credit that will allow the [Rhythm and Hues] to proceed with work on their films, presumably including Fox’s “Percy Jackson: Sea of Monsters” and Universal’s “R.I.P.D.”

But Warner, according to the effects company’s motion, has demanded the “return of all materials” related to three of its scheduled movies. Two of those were identified in the filings as “Black Sky,” a thriller from the company’s New Line Cinema unit, and “300: Rise of an Empire,” which was made in partnership with Legendary Entertainment, and is set for release in August. The third film ... is “The Seventh Son,” a Legendary film, which is scheduled for release by Warner in October. ...

Funny thing about Warner Bros.

Back in the go-go nineties, WB hatched its own visual effects house inside Warner Bros. Animation, then expanded it into a full-blown visual effects studio, housed in a large brick building at Empire Avenue and Buena Vista Street, near what is known today as "Media Center North" in beautiful Burbank.

Sadly, the VFX studio was short-lived. A month before it closed, I had lunch with a Warner Bros. exec who said "We're losing our ass on the visual effects division," so I kind of knew its days were numbered. Tim Sarnoff, its head, jumped ship right near the end and paddled over to Sony Pictures Imageworks, the only studio-based visual effects house at the time. (Disney tried the same thing with The Secret Lab at the turn of the century, but TSL didn't last long.ILM ate the place alive. All the "money shots" for Pearl Harbor, Disney's mega production at the time, were done at ILM.)

Now, a dozen years later, the big entertainment conglomerates are sending their money shots to Canada, where generous Canadian citizens (otherwise known as "suckers") underwrite Hollywood visual effects work. Meantime, Time-Warner makes sure as many bodily fluids as possible are sucked from the still-warm corpse of Rhythm and Hues. Warners is no doubt thinking:

"Hey Mo Fo, if we couldn't make a go of visual effects, nobody makes a go. Got it?"

Click here to read entire post

China Production?

This seems a provocative headline:

Source: DreamWorks could have saved U.S. jobs if they made 'Kung Fu Panda 3' in U.S., not in China

And so on.

Rumor has it that there have been major cuts at DreamWorks Animation's India facility, in addition to Glendale and Redwood City.

Fox News can't get an answer about a Kung Fu Panda 3, but I'm willing to stake my dentures on a third installment getting produced. (I've seen and heard various things, you see.)

In the meantime, from all reports we've received, DWA is giving separation money of varying amounts to laid off employees, and is paying out its longer term employee contracts. (That's better than getting a cardboard box for your belongings and a quick escort off the campus.)
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Wednesday, February 13, 2013

Petro Vlahos, RIP

A special effects wizard passes.

Special effects inventor and engineer Petro Vlahos, whose industry contributions made possible such iconic film moments as Julie Andrews dancing with penguins in the 1964 classic Mary Poppins, died Sunday. He was 96. ...

Vlahos had more than 35 patents for camera crane motor controls, screen brightness meters, safe squib systems, cabling designs and junction boxes, projection screens, optical sound tracks and even sonar. ...

His version of the sodium system was used on dozens of Disney films, including Mary Poppins, The Love Bug (1969) and Bedknobs and Broomsticks (1971) and was borrowed by Alfred Hitchcock for The Birds (1963) and by Warren Beatty for Dick Tracy (1990). ...

All of Mr Vlahos' technology is outmoded now, but it had a sizable impact on films in the '60s, 70s, and 80s; in the same way that hanging miniatures and glass shots made a big difference in the quality of features in earlier decades. Click here to read entire post

The Storm Has Hit

For years, it seemed that Rhythm and Hues was doing everything right. Except they weren't doing enought right, probably because they couldn't.

... [T}he troubles facing R+H are all too familiar in the visual effects community. Several top shops have experienced money troubles as studios seek to reduce costs by farming out work overseas. For instance, Digital Domain Media Group filed for bankruptcy in September before selling its VFX business to India’s Reliance MediaWorks and China’s Galloping Horse for $30.2 million.

“This results from the unrelenting drive on the part of the studios to continue to lower their cost of production,” says VFX veteran Bob Coleman, founder of Digital Artists Agency. “We call this the race to the bottom. Some point their fingers at the [VFX] companies, which continue to lower rates. But the net consequence is lower margins. We have known for last 10 years that profit margins at the biggest house have been 0-6 percent.”

But Coleman points out that Rhythm & Hues seemed to be adapting to the new climate. It was one of the first California-based VFX companies to open in India to take advantage of lower labor rates. More recently, it opened branches in Vancouver, as well as Malasia and Taiwan. ...

Funny thing, but an effects supervisor and I talked about how visual effects studios couldn't go on low-ball bidding jobs the way they were doing, because they were cutting their own throats.

We talked about this a while ago. Like in 1996.

Now, of course, it's even worse. Because places like Vancouver and Ontario are throwing money at our fine, entertainment conglomerates to come and do effects in their municipalities and get a big cash prize (otherwise known as a tax subsidy.)

The business models for visual effects are nuts.
Click here to read entire post

Tuesday, February 12, 2013

A New Cash Flow

And maybe DreamWorks Animation won't have to survive only on theatricals.

Netflix will release its first ever original kids series with DreamWorks Animation, the company announced Tuesday.

Based on the DreamWorks film "Turbo," which will be released this summer, "Turbo F.A.S.T." will debut exclusively on the streaming service in December. It joins a slate of original Netflix programming that includes the new drama "House of Cards" and new episodes of "Arrested Development" that will begin airing in May.

"Turbo: F.A.S.T." (which stands, obviously, for Fast Action Stunt Team) will be available in the 40 countries where Netflix offers its service. ...

Companies need diversified sources of income if they are ... you know ... going to carry on. Disney branched out from cartoons in the 1950s, and I'm informed the company is still around.

DreamWorks is taking steps in that direction. It doesn't make it easier for employees who are getting cut in the Great Readjustment, but it might mean the company is still around ten or fifteen years hence.
Click here to read entire post

Monday, February 11, 2013

The Beginnings of Disney TVA

When I was a mere slip of a boy working at Disney Feature Animation (more about that tomorrow), a friend in Disney's publicity department steered me to the transcripts of a lengthy interview done with Walt Disney in 1964 for the Saturday Evening Post. One of the exchanges that caught my eye was this:

Q: Walt, you do animated features. Why don't you do television cartoons like Hanna-Barbera?

WD: We did that kind of animation, those crude, limited shorts, back in the twenties. Did a lot of them, just cranked them out, like they do TV stuff today. I don't really want to go back to doing those things again. Hanna and Barbera can make them. ...

Walt died a couple of years later. And eighteen years after that, Walt Disney Productions changed its CEO ... and its mind ... about television cartoons:

... After taking control of the Walt Disney company in 1984, Michael Eisner and Frank Wells had a simple goal for the company’s animation division: It had to be at the top of every possible medium. ...

DuckTales, the most successful show of Disney’s short-lived television-animation renaissance—and a show that kicked off a brief interest in syndicated afternoon animation from a host of media companies—has mostly disappeared from the limelight. ... It’s an understatement to say DuckTales was a hit. Not only did it lead to a huge number of additional Disney animated shows that entered the “Disney afternoon” syndication package—shows like Chip ’N’ Dale Rescue Rangers, TaleSpin, and Darkwing Duck—but it led to other studios raiding their own cabinets to see what could be reworked into programs that would entertain America’s bored latchkey kids. With the rise of two-income households, there were more and more kids out there who couldn’t be bothered to do their homework until someone made them, and an army of shows marched onto TV to entertain them, including legitimate classics like Animaniacs and Batman: The Animated Series.

DuckTales was the first, however, and it served almost as a statement of purpose. Rather than trying to be as kid-friendly as possible, the series made its protagonist an irascible old man. Rather than celebrating the sorts of family-friendly virtues Disney was associated with, the series was about the awesomeness of unchecked avarice and greed. ...

Which, come to think of it, fit right in with Diz Co. after Walt Disney. The Founder didn't want to repeat himself, but the Founder was long gone. And the watchwords were now "maximize profits."

I was at the studio when Michael Eisner came up with the title (and idea) for Disney TVA's first series, The Gummi Bears. There were Disney feature staffers who were less than enthralled with the idea of Walt Disney Productions jumping into television animation, but I had no strong position on the subject. I had read Walt's thoughts on small-screen animation, but I understood that the parade had moved on, and the focus now was cash flow and profits.

The Disney Company might still be named for Walt, but the fine entertainment conglomerate that he left behind has only slightly more connection with its namesake than Time-Warner does to Jack L. Warner.
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Chaos and "Creative Destruction"

Now with Add On.

An animation studio/visual effects house bites the dust.

Oscar-nominated, VES-winning and Annie Award-winning animation studio Rhythm & Hues will be formally filing for bankruptcy Monday morning, Deadline has learned. Within hours of winning the BAFTA for Special Visual Effects for Life Of Pi, the financially troubled company informed employees around 9 PM Sunday of the upcoming Chapter 11 filing, insiders say. Many Rhythm & Hues employees were also told by management not to show up to work Monday.

In Animationland (which is also, if we're honest, VisualEffectsLand) things change quickly. The Fleischer Studio disappeared in 1942 after a couple of decades of existence, and lots of animators had to relocate from Florida. Disney came close to dismemberment in the early 1940s and then again in the 1980s, when corporate raiders threatened a leveraged buyout. Hanna-Barbera went the way of the Dodo bird after buyouts by Ted Turner and Time-Warner ...

And of course a week ago, DreamWorks Animation, in a world of hurt after Rise of the Guardians under-performance, began to cut staff, just as Walt Disney Productions did after Sleeping Beauty's less than boffo performance in 1958.

Call it Creative Destruction ... for employees. Companies restructure, companies go out of business, and the execs at the top take their exit money. Everybody else clears out their desk and heads for the unemployment office.

And it happens in all corners of the animation business. Like for instance Disney Interactive a few weeks ago. Or game company THQ three weeks back, when the corporation went into receivership and CEO Brian Farrell wrote his "Dear John" letter to employees:

... We expect that most employees of the entities included in the [bankruptcy] sale will be offered employment by the new owners. However, we cannot say what these owners may intend, and there will likely be some positions that will not be needed under the new ownership. You should receive notice this week or early next week if the new owners intend to extend employment to you. Please note that the terms of your new employment, including pay and benefits, may be different from the current terms of your employment with THQ.

If you are an employee of an entity that is not included in the sale, we regret that your position will end. ...

But perhaps the worst area of the biz is the one that the unfortunate Rhythm and Hues inhabited, where Visual Effects shops often have the life expectancies of fruit flies. As the veteran effects honcho Scott Ross explains:

... Visual effects operates on a fixed bid, often without a well-defined plan or blueprint. All companies, at every level, are underbidding for their services. And the opposing, client side - I mean, it’s like Godzilla.

The VFX services business is the ultimate swim to the bottom. There’s tons of work, it requires highly specialized iP and know-how, there are significant barriers to entry, to play at the Hollywood level.

This is a business that any Harvard economist would tell you should make lots of money. Yet nowadays running a big VFX facility is like keeping a big airline in business - the basic theory being that a plane in the air, even earning half its average revenue and losing money for the business, is better than that plane remaining stuck on the ground and losing even more. ...

The entertainment business has always been competitive to the point of dog-eat-dog, where you sink or swim on the strength of your last project. But the visual effects industry is even worse, because visual effects studios cut each others throats with low-ball bids, thereby guaranteeing their own extinction.

Not a pretty world in which to be employed. But animators, modelers and tech directors already know that.

Add On: VFX Law has pithy advice to laid-off R & H employees, which you should read. VFXL ends with this:

... These last few years have proven to be exceptionally hard on VFX workers, and I do not see this trend letting up anytime soon. For starters, other companies are also nearing collapse, and there are just as many that work job-to-job with no guarantee of future work.

As VFX artists, it is time for you to consider the possibility of working together to form an international guild that will give you leverage against the major studios.

For those of you deeply affected, and those of you who are brave enough, now is a great time to pick up a sign and march outside the big studio gates around Hollywood, showing your displeasure. This is not a story of a ho-hum VFX company going broke. Life of Pi was extraordinary, and without R&H an important part of the VFX industry will be deeply missed. ...

My sentiments exactly.
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Sunday, February 10, 2013

Foreign Dog Race

The animation takes a back seat to the live-action.

While Sony’s Django Unchained remained No. 1 overseas for the fourth consecutive weekend, the highlight of a sluggish session on the foreign theatrical circuit was the limited introduction of 20th Century Fox’s release of A Good Day To Die Hard. ...

[T]he fifth installment of action franchise starring Bruce Willis opened over the weekend in just seven Asian markets, and drew $10.1 million at 1,102 locations for a per-screen average of over $9,000. ...

Overseas, Wreck-It Ralph has now climbed to $207,500,000 (52.9% of its world total) while Rise of the Guardians has earned $197,300,000 in foreign lands (66.2% of everything.)

Guardians should crack $300 million in the next several days.
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New Zealand vs. A Fine, Entertainment Conglomerate

When we strip the bark away, we've got a government pushing one way ... and some movie corporations pushing another:

Warner Bros is threatening that the Government's release of confidential documents about the Hobbit union debate would be a "major disincentive" to future film-making in New Zealand.

The New Zealand Ombudsman has ordered the Government to release documents about the deal it struck to ensure the Hobbit movies were made in the country.

The Government secured the three movies by changing employment laws and beefing up the tax rebate sweetener for the productions, resulting in an additional $25 million in incentives for Warner Bros.

Unions fought the law changes and the Labour Party accused the government of chequebook legislation.

The documents, all of which opposed the 2010 unionisation attempt, include sensitive communications between Warner subsidiary New Line Cinemas, Peter Jackson's Wingnut Films and government ministers. ...

Wingnut Films also criticised the move.

"I can categorically assure you that if the above information was released and a similar situation occur in the future, neither myself nor Wingnut Films would be inclined to help the Government again with such a candid level of advice and opinion," reported The Hollywood Reporter.

It was not clear whether the "I" referred to Peter Jackson. ...

Must be something in the docs that Peter and Company don't want out there.

And so they are pushing back. Ferociously. And making threats to pick up the game ball and, in future, go play someplace else is an excellent weapon when the goal is to make the New Zealand government sit on all the overly-honest memos.

This is how, friends and neighbors, the game is played. Start with gentle persuasion. If that doesn't work, try threats. It is. after all, about leverage, and you use what you've got.
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Saturday, February 09, 2013

How Large the Cuts?

Re DWA, the Wall Street Journal reports:

DreamWorks Animation SKG Inc might cut a maximum of 500 jobs from its 2,000 member workforce following disappointing holiday results and delays to its film lineup, the Wall Street Journal reported on Thursday, citing a person familiar with the situation. ...

This is the question that's ricocheted through the last week. How many employees will DreamWorks Animation let go? (I've been asked by reporters here and there, and I have given them estimates, emphasizing that figures coming out of my mouth are based on talks with DWA employees and ... guesswork. (All management has said to me is that there will be layoffs. They gave no numbers.)

I don't know who the WSJ talked to, but everyone I've interacted with at the studio says layoffs will be in the 250-450 range. I've also been told by production employees that PDI will have cuts similar to the DreamWorks Glendale campus.

Animation story crew members have told me that management isn't cutting storyboard artists. Others have said they think employees with term contracts will be kept on until the end of their deals. "At will" employees (those without contracts guaranteeing them lengths of employment) will be getting laid off at the end of their assignments.

Friday I talked to a supervisor who represented that management hasn't made final determinations how large cuts will be at the Glendale campus, the Redwood City studio, or India.

Me, I think management has a general idea about who goes and who stays. But maybe I'm too cynical for my own good.

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Reupped at the WGAw

Mr. Young receives a new contract.

Writers Guild of America West executive director David Young will be sticking around.

WGAW said Friday it had extended his contract for another five years, which will take him through the next two contract renewals with the Association of Motion Picture and Television Producers. He has been with the union since 2006. ...

David Young was brought in to serve as executive director during the administration of Patric Verrone. He's by now a veteran of three different WGAw Presidents (Verrone, Wells, and Keyser), so he clearly has skills beyond managing a writers' strike. Click here to read entire post

Weekend Horse Races

And animated movies are out of the running.

1. Identity Thief (Universal) NEW [Runs 3,141]
Friday $11.2M, Saturday $15M, Weekend $36M

2. Warm Bodies (Summit/Lionsgate) Week 2 [3,009]
Friday $3.2M, Saturday $5.1M, Weekend $11.4M, Cume $34.1M

3. Side Effects (Open Road) NEW [Runs 2,605]
Friday $2.8M, Saturday $4.2M, Weekend $9.5M

4. Silver Linings Playbook (Weinstein) Week 13 [Runs 2,809]
Friday $1.6M, Weekend $5.8M, Cume $88.9M

5. Hansel & Gretel: Witch Hunters (Paramount) Week 3 [Runs 3,285]
Friday $1.3M, Weekend $4.8M, Cume $42.9M

6. Mama (Universal) Week 4 [Runs 2,677]
Friday $1.1M, Weekend $4.0M, Cume $63.7M

7. Zero Dark Thirty (Annapurna/Sony) Week 7 [Runs 2,871]
Friday $975K, Weekend $3.5M, Cume $83.1M

8. Argo (Warner Bros) Week 18 [Runs 1,405]
Friday $565K, Weekend $2.0M, Cume $123.2M

9. Django Unchained (Weinstein) Week 7 [Runs 1,502]
Friday $560M, Weekend $2.1M, Cume $154.3M

10. Top Gun 3D IMAX (Paramount) [Runs 300]
Friday $535K, Weekend $2.0M ...

Wreck-It Ralph has glommed on to $183,348,715 in the U.S. and Canada (48.7% of its world wide gross), while Rise of the Guardians has accumulated $100,611,624 (33.8% of its global totals.)

And it's nice to see a Bruckheimer=Simpson production back in the Top Ten. 3-D lives!

Add On: Wreck-It Ralph had a near 80% uptick for the weekend, collecting over a million dollars as it climbed from 22nd to 18th place. Being a front runner for a little gold man certainly helps, don't you think?
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Friday, February 08, 2013

New 401(k) Totals

For TAG 401(k) participants:

As of the start of the week, the Plan's asset total was

$164.2 million

And the average participants has $70,000 in various accounts ...

This is considerably higher than averages in most plans, and combined with the other TAG pensions means that a lot of TAG members will be on more solid footing than most employees across the fruited plain.

As U.S.A. Today says:

... According to the Center for Retirement Research at Boston College, the median household retirement account balance in 2010 for workers between the ages of 55-64 was just $120,000. For people expecting to retire at around age 65, and to live for another 15 years or more, this will provide for only a trivial supplement to Social Security benefits.

And that's for people who actually have a retirement account of some kind. A third of households do not. For these people, their sole retirement income, aside from potential aid from friends and family, comes from Social Security, for which the current average monthly benefit is $1,230.

The thing that I emphasize (over and over) is that younger employees have to think about putting something away, even if it's only a few percent of income. (And let's face it: In an unstable employment universe, that can be a challenge.)
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"Illustrating Modern Life"

J. C. Leyendecker, Woman Kissing Cupid, 1923. Oil on canvas, 27-1/2 x 22-1/4 inches.

From January 12 through March 31, the Frederick R. Weisman Museum of Art at Pepperdine University will feature the show “Illustrating Modern Life: The Golden Age of American Illustration from the Kelly Collection”.

The period from the 1890s through the 1930s was the Golden Age of American Illustration. The rapid rise of popular magazines created a new audience for art — the American public — and a new demand for illustrations. The nation’s most talented artists responded by turning illustration into a sophisticated art form that gave visual life to our nation’s dreams and ideals. Drawn from one of the country’s premier collections of historic American illustration, this exhibition features original paintings by legendary artists such as Howard Pyle, N. C. Wyeth, J. C. Leyendecker, and Norman Rockwell.

The Weisman Museum is located on the campus of Pepperdine University at 24255 Pacific Coast Highway in Malibu. For more information, go to their website.
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