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.


Floyd Norman said...

I've been in this crazy business for over fifty years and "empire building" has always been the toxic side of the cartoon industry.

While artists labor on the movies, a cadre of smart, smarmy executives conspire their way to the top. But, you can't get rid of 'em. They reproduce like roaches.

Tim said...

I was going to say "Let's hope (for the artists' sake) that the cuts are evenly distributed throughout departments." But that sounds like I am happier that one person loses their job over another. What I mean is, I hope that everyone shares this burden as evenly as possible. Fair is fair, in good time and in bad.

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