No Warner Acquisitions

So there's plenty of media speculation, after Comcast gobbles up DreamWorks Animation, that more acquisitions and mergers are just over the horizon. But the Warner Bros. top-kick pours cold water on that idea.

Comcast’s $4.1 billion pact for DreamWorks Animation won’t pressure Time Warner or any other media conglomerate to go on a buying spree, Warner Bros. Entertainment CEO Kevin Tsujihara told analysts on Wednesday.

“I don’t think we’ll see more consolidation,” he said during a conference call to discuss Time Warner’s first quarter earnings. “I don’t think [the DreamWorks Animation deal] is going to be a precursor to a lot of transactions.”

There has been speculation that entertainment companies could begin to pool resource through mergers and acquisitions as they try to compete with Disney (the owner of LucasFilm, Pixar, and Marvel) and Comcast (the cable giant that also houses NBCUniversal). Viacom is currently selling a minority stake in Paramount and Lionsgate, the last pure play, publicly traded studio has been the subject of merger speculation.

But Tsujihara doesn’t see many things for sale that could add to Warner Bros.’ arsenal of superhero and animated tentpole films. ...

Part of the problem? There aren't a lot of tent poles ... or companies owning tent poles ... available to buy. Not long ago the smart money thought that Disney Chairman Robert Iger overpaid for Pixar, Marvel, and finally LucasFilm. But Diz Co. has made sizable profits from its purchases and the skeptics are re-thinking their earlier positions.

But Warner's decision of not going the Disney route is understandable. It's building a new feature animation division named WAG (Warner Animation Group) and has already had sterling results with The Lego Movie It already owns a plethora of DC super heroes, and how many caped wonders does one movie studio really need?

Still in all, corporate strategies change over time. In 2007 Comcast-Universal partnered with Chris Meledandri to create Illumination Entertainment from scratch. Eight years later, Comcast-Universal pulled a leaf from Robert Iger's playbook and paid $3.8 billion for DreamWorks Animation, its TV operation, and twenty years worth of DWA animated features.

The Mouse's business model is plainly enticing, and Comcast-Universal and Warners mean to replicate it, each in their own way.



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DreamWorks' Profits

So Jeffrey K's company (though not for much longer) does well in the earnings department.

... DreamWorks Animation just disclosed better-than-expected financial results for Q1 at a point when — with its $3.8 billion agreement to sell out to Comcast — the strong performance can’t really influence the stock price.

The studio reported a net profit of $13.8 million, up from a $54.8 million loss a year ago, on revenues of $190.4 million, up 14.4%. Analysts thought the sales number would be lower, at $182.6 million. Earnings at 16 cents a share were well above expectations for 1 cent. ...

And Jeffrey had this to say:

... A week ago, Comcast and NBCUniversal announced the acquisition of DreamWorks Animation. I believe the agreement not only delivers significant value for our shareholders, but also supports NBCUniversal's growing family entertainment business. As stated in the press release, the transaction is subject to a number of closing conditions including regulatory approval and Comcast expects the transaction to close by the end of 2016.

Between now and then, it is business as usual for us. I will continue leading the company and will be working diligently each and every day with our teams to ensure that we are executing towards our strategic goals. ...

So it is, as stated previously, "full steam ahead" and business as usual until January, 2017.

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Blues Bros.

From yesteray, this:

Bento Box Entertainment announced plans [May 3] to develop and produce “The Blues Brothers,” as an animated comedy series. The project, which has been in the works for years, hails from Dan Aykroyd and former “Saturday Night Live” writers Judy Belushi and Anne Beatts.

The music-centric series will center on the adventures of Jake and Elwood Blues, two brothers who belong to a blues band. While no network is attached, Bento Box will shop around the project as a primetime comedy series. The independent studio is currently behind Fox’s “Bob’s Burgers,” among other shows. ...

Nostalgia is all the rage, what with The Jungle Book and various live-action remakes of Disney animated features. So why not do a rebake of a "Saturday Night Live" act from the seventies, one that birthed a #1 album, a moderately successful feature film, various tours and additional recordings?

Remaking earlier hits, breathing new life into old franchises, that's what American entertainment is about.


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Animators Fret

The Hollywood Reporter analyzes the marriage of Comcast Universal and DreamWorks Animation, and some union rep shoots off his mouth:

If you listen closely, you can hear a hint of pessimism in the predictions of Steve Hulett, business rep of the Animation Guild, about what will happen after NBCUniversal completes its acquisition of DreamWorks Animation. Thanks to the Walt Disney Co.'s 2006 purchase of Pixar Animation Studios, for example, Hulett has seen versions of this movie before.

"Usually they spend a period of time trying to soothe nervous hearts," says Hulett of acquirers. "They lie to the crew because they've got a picture to get out, and they can't have people jumping ship. … They use whatever argument they can use to calm you down." ...

We've discussed this with a few DWA employees, and it appears as if the television side of the biz is in good shape. In fact, the television side of DreamWorks Animation's business, appears to be a large part of the reason that Comcast-Universal desired the acquisition. The conglomerate has a cable network to program and DWA's growing cartoon library looks to be -- once the Netflix obligation runs its course, ready-made for C-U.

What will happen to feature animation production in Glendale is murkier and more uncertain. Our assumption is that more production will sooner or later be shipped to the land of snowy winters and Free Money, but this merger ... if approved by the government ... won't finalize until the end of the year and the word we've picked up is that work on current feature projects is "full steam ahead".

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Lining Up Talent

... for the next Space Jam.

... The Fast & Furious 6 and Star Trek Beyond helmer [Justin Lin] is co-writing, with Dodge and Botello, Warner Bros.' Space Jam 2. Lin is also looking to direct and produce via his Perfect Storm Entertainment, and sources say he will be thoroughly involved in the creative development of the project.

The WME-repped Cleveland Cavaliers forward, who recently appeared in Amy Schumer comedy Trainwreck, will star in the sequel. Rumors of a follow-up to the live-action/animated 1996 hit have been circulating for years but picked up steam in July when James and his company SpringHill Entertainment signed a deal with Warner Bros.

The first film, which earned $230.4 million worldwide, featured Michael Jordan teaming up with a collection of Looney Tunes characters to play a game of basketball against aliens threatening their freedom. ...

That first film, twenty years back in 1996, was a harried, hectic affair. The live-action shoot went well enough, except they didn't do a lot of pre-planning for the animated elements (Bugs, Daffy, etc.) and the schedule for the animation crew ... when animation finally got rolling ... was a hair-breadth short of insane. There was nine months to get everything done before the release date, and animators and assistant animators were sleeping under their desks. (This was in those happy, now-distant times when Warner Bros. actually paid overtime to animation crews).

I imagine Mr. Lin will want to pre-visualize the feature. I also imagine that Warners will desire to make the cartoon characters in CG, since CG is all the rage. But I have no idea when the picture might start production. It will likely happen when the studio gets a script that it likes. Now, at least, Space Jam 2 has a director.

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The Soldier on The Merger

I've been asked by many: "What's going to happen with DreamWorks Animation?" Though I don't have specifics (because the rude folks at Comcast-Universal have dropped me off the "CC" list for internal e-mails), I have made predictions about how DWA's future will unfold. And now I find, courtesy of a TAG member, that VFX Soldier has stirred back to life and offers this:

... [The DreamWorks Animation-Comcast merger] is a huge success for Katzenberg and he deserves it. However for the employees at DWA it’s a vastly different story because Comcast will subscribe to Mellandri’s feature animation production model and not the production model of Katzenberg.

... Katzenberg generally subscribes to the ["end-to-end"] production model in feature film CG-animation that is shared by John Lasseter at Disney and Pixar ... where from the storyboard to the final comp the whole production pipeline is generally housed under one roof. The employees are treated very well with good salaries, generally longer term contracts and with some having union benefits. The management team can clearly see what works and what doesn’t and adjust accordingly. The problem is adjustments can be like turning a huge ship which can lead to overflowing budgets if you’re not looking ahead. ...

Another model is the traditional outsourcing model that many ... love to talk about. This is where pre-production is done by animation veterans in the US and sent to CG productions facilities in Asia like India and China where labor costs are very low. ...

The final model is the one that I believe Comcast will subscribe to: The subsidized production model. This is the model that Comcast will adopt from its leading animation producer Chris Meledandri. It’s the same model former Imageworks exec Bob Osher adopted and one that many other VFX facilities have been forced to adopt: Move your production to locations where the government offers huge amounts of free taxpayer money. ...

The first bad sign [about the merger] is Katzenberg leaving. That gives Comcast no resistance to do what it intends to do no matter how stupid or costly it is. I know the Kool-Aid can be very potent at DWA and if I were you I would be completely skeptical of any terms of transition directed at any of you. A buy-and-hold period of about a year has been established so you have between now and “ground zero day” to pack your parachute. If ground zero day arrives and your safe great, if not, at least you are prepared. Given the landscape of VFX and CG animation production these days you might want to begin looking at the option to move to Canada, New Zealand, or the UK if you are interested in pursuing a career in VFX and animation. ...

Soldier's thoughts about DreamWork's future pretty much track my own.

On the bright side, I think the company will beef up pre-production for both features and television. Comcast is interested in following the Disney synergistic model where content boosts merchandise, beefs up the amusement parks, and becomes a driving force for video games and various distribution platforms. Much of this work will stay near the mothership in Los Angeles.

On the less-bright side, some (all?) feature production will leave town and go to places that pay lower wages or give away free money. As I write, there are 565 Guild members at DreamWorks Animation feature division and 261 Guild members at DWA's TV division. In the next one to three years, I would expect the feature numbers to diminish and the TV numbers to increase.

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Trimming the Free Money Sails

Oh my my.

The British Columbia government is cutting film and TV tax breaks amid an industry boom that drove the cost of the tax credits to nearly half a billion dollars in the last fiscal year – a decision that prompted some within the industry to worry U.S. producers could have second thoughts about bringing their projects to the province.

Finance Minister Mike de Jong followed through on his concerns about the cost of such tax breaks by announcing a plan to cut the basic production-services tax credit by five points – to 28 per cent, from 33 per cent. The credit compensates producers for claimed B.C. labour costs at the designated rate. At the same time, the digital animation or visual-effects tax credit will be cut to 16 per cent, from 17 per cent.

Earlier this year, Mr. de Jong said the province could no longer afford the tax credits, which have soared from an average annual cost of $313-million to $491-million in 2015-16. An increase in production, partly due to the low Canadian dollar, saw producers claiming more tax credits.

British Columbia’s decision to tinker with its tax-credit scheme comes as other jurisdictions have grappled with whether or how governments should support the industry. Saskatchewan got rid of its tax credits. Nova Scotia did the same last year, decimating its production industry. Ontario lowered its tax support last year for foreign productions. ...

The problem with giving away free money is it gets expensive for the geographic locality even as it becomes addictive for the fine entertainment conglomerate grabbing up the gobs of gratis cash.

California does it. Georgia does it. Likewise Britain and France and different Canadian provinces. But at some point the locals start to get restless watching their tax money go to big fat corporations that don't really need it, but will gladly take the moolah if some government chump offers same.

Long live free, unfettered enterprise!!

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The Animation Guild Golden Award Interviews #23 -- Curt Perkins and Lee Halpern

Curtis Perkins and Lee Halpern both entered animation in 1936, when the West Coast industry was expanding (Disney was still looking for artists to complete Snow White) and there were a cluster of other studios turning out shorts.

Curt Perkins began his career at Walter Lantz, but soon moved to Disney where he did effects animation and storyboarding. After World War II, he operated his own studio and worked for Hanna-Barbera and Filmation, among others. Curt passed away at age 80 in 1996. ...



Lee Halpern began his cartoon career at Leon Schlesinger's the summer of '36, making a princely $6 per week. Happily, he didn't stay at the rate for long, and by the 1960s was working on both theatrical shorts and television half-hours. Lee continued to work into the late 1980s, principally at Filmation. He passed away at age 86 in 2002



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ONE MORE SETTLEMENT ON WAGE SUPPRESSION

Sony decides to make peace.

First Fox’s Blue Sky Studios reached a multi-million dollar settlement and now tellingly Sony has come to an 8-figure deal to exit the on-going potential class action suit against itself, DreamWorks Animation, Pixar, LucasFilm, Disney and the now shuttered Imagemovers Digital over wage-fixing and anti-poaching allegations. The $13 million dollar Sony deal signals a major shift in the ‘toon studios’ legal strategy and could see the remaining defendants moving to make their own deals to wrap this thing up. ...

Citing expediency, the plaintiffs’ attorneys want Judge Lucy Koh to schedule the preliminary approval hearing for the Sony settlement with the already set June 16 court appearance for the Blue Sky Studios deal. A hearing on class certification for the case is currently on the calendar for May 6.

Former DWA visual effects artist Nitsch first filed his case on September 8, 2014 with Wentworth and Cano putting their paperwork before the courts soon afterwards. “The Defendants themselves have explained the purpose of the conspiracy and in doing so, articulated the harm and injury caused by it to their workers. George Lucas explained under oath that the purpose of the non-solicitation agreement was to suppress wages and keep the visual effects industry out of “a normal industrial competitive situation.’” ...

The Animation Guild was subpoenaed for docments on this case several months ago, and I was then deposed for three hours in Century City. (I didn't have much of importance to say beyond giving dates of meetings and regurgitating a few points out of some redacted emails.)

My take on all the studios (alleged) wage suppression scheme is that companies large and small have been focused on keeping costs down for years. I understand that maximizing profits are what corporations do, but there are legit ways to go about that, and less legitimate ways. Studios working in concert to keep wages lower (allegedly) was a long-term strategy, and that the various companies are, one by one, making decisions to put the issue behind them. (Probably a wise thing to do.)

Our fine, entertainment conglomerates already get Free Money from various geographic locations (California, Georgia, Canada, Britain, France, etc., etc.) so they should lay off hammering paychecks into the ground. The Top Dogs should let the people that put the images on the screen earn more money too.

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World Box Office

There is a poop-load of animation (what with animated features plus animated visual effects) in the Global Box Office list:

WEEKEND FOREIGN BOX OFFICE -- (WORLD TOTALS)

Captain America -- $200,200,000 -- ($200,200,000)

The Jungle Book -- $57,100,000 -- ($684,795,800)

Zootopia -- $8,300,000 -- ($931,418,489)

Batman Vs. Superman -- $2,750,000 -- ($862,932,593)

Ratchet and Clank -- $600,000 -- ($6,823,000)

Kung Fu Panda 3 -- $3,100,000 -- ($509,907,337) ...

And our fine entertainment journal tells us:

Before taking the fight to the U.S. on May 6, Disney/Marvel’s Captain America: Civil War began its offshore campaign this frame in 37 territories. With an estimated $200.2M, Team Cap and Team Iron Man came in just behind Avengers: Age Of Ultron’s international start last year and set all-time opening weekend records in Brazil, Mexico and the Philippines. ...

Disney had a full dance card this weekend, also seeing The Jungle Book swing to another $57.1M internationally for an offshore total of $432.7M. In Europe, the Mouse dominated all the major markets with Civil War and Jungle Book placing No. 1 and 2 in many territories and with Civil War/Jungle Book/Zootopia sweeping the top three spots in the UK yesterday. ...

With a weekend of almost $100M global, The Jungle Book continues to beat its chest at the worldwide box office. The 4th offshore frame was worth $57.1M to bring the overseas total to $432.7M and the global tally to $684.8M. ...

Disney’s other animals were fairly wild again this frame, picking up $8.3M in the 12th – yes, 12th – offshore frame. The international total is now $607.9M for $931.42M global. Still playing in 40 territories, Zootopia benefitted from the Golden Week kickoff in Japan where it rose 9% versus last weekend. That holdover power enabled it to beat the launch of its own studio rival Captain America: Civil War, and bodes well for the coming frame. Meanwhile, in Germany, with 3.47M admissions, $31.8M in total box office and a 4th place finish in its 8th weekend of release, Zootopia has become the market’s No. 1 movie of 2016. ...

Kung Fu Panda 3 continued its run in 19 markets. Released by Fox, which has DWA titles through 2017, KFP3 grossed a further $3.1M to bring the total since its late January release to $368M overseas. ...

As their run winds down and with Marvel rivals now dominating offshore play, the Batman Vs. Superman pulled in an estimated $2.75M this weekend from approximately 3,400 screens in 59 markets. The offshore cume is now $537.8M. ...

With animation of all stripes killing at the world box office, it's not real surprising that the market for experienced talent is tightening.

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Active Investing = Washout

From the Big Picture:

Why Is Active Failing?

• Too much competition: As Charles Ellis, a former member of both the Yale endowment fund and Vanguard’s board (our podcast is here), observed:

Gifted, determined, ambitious professionals have come into investment management in such large numbers during the past 30 years that it may no longer be feasible for any of them to profit from the errors of all the others sufficiently often and by sufficient magnitude to beat market averages.

Hence, even a market that is not perfectly efficient quickly eliminates almost all of the potential alpha, or above-market returns. Being smart, hard-working and savvy may create only a short-lived advantage — or none at all.

• Main Street has given up on Wall Street: The average retail investor over the past 15 years or so has endured the dot-com boom and bust, the housing bubble, a full-blown financial crisis followed by an awful stock-market crash, a whipsawing commodities market and almost zero returns on cash savings. These investors now suffer from finance fatigue and have little interest or faith in anything that Wall Street is selling.

Is it any surprise that many investors, after having been so badly beaten up, have decided to take their ball and go home? And by ball, I mean capital, and by home, I mean low-cost index funds. ...

• Internet has leveled the playing field: How much information that once was the province of a select few is now in the hands of all?

It was a huge game-changer when Yahoo message boards begin to fill up with posts from people doing legwork on individual companies. When someone reported that XYZ Tech’s employee parking lots were filled with cars 24/7 — including weekends — anyone paying attention understood that business was booming and that sales were going to beat investor expectations. For the few who grasped that, this was a period of large trading profits.

This advantage exists only when a small number of people know what a large number of people are going to find out too late to act on. When everyone knows, the advantage disappears. ...

Here and there I get asked by TAG members: "What's the best way to invest? I don't know ANYTHING about investing." ...

This is my answer (verbatim):

I'm not a licensed financial advisor, but I've been involved with TAG's 401(k) Plan and reading and studying the subject for 21 years ... and making investment mistakes for a long time before that. And here is the secret to investing for retirement (or most any other long-term thing) in a nutshell.

* It's really simple. You need three funds -- Total Stock Market (U.S.) Index; Total Bond Index; Total International Stock Index.

You need to put money into these accounts week in and week out, from the time you start earning a living to the time retire. Fifty dollars every payday, two hundred dollars, something. And keep doing that "weekly contribution" through the thin times and the fat times.

That's it.

Oh. And you have to set up your stock/bond allocation.

Do you want to be heavier in U.S. stocks, or lighter? Do you want more bonds? Most people need three stock-bond settings during their lifetimes -- from ages 25-45, it should be 60% stocks and 40% bonds (with international somewhere between 30%-40% of the stock portion); from 45-60 it should be 50% stocks/50% bonds. And from 61 to pushing up daisies time it should be 60% bonds/40% stocks. ...

Now obviously the above is Hulett's take on "How To Invest". Your Aunt Miriam might swear by a 50%/50% allocation from start to finish, and there is nothing wrong with that.

And if you have more than enough loot to last the rest of your lifetime, you can take yourself out of the "risk" game by stashing most of your money in bonds and Certificates of Deposit, although Vanguard's Portfolio Allocations Graphic shows that 80% intermediate bonds, 20% stocks is the last risky of any allocation.

But here's what louses up most investors: No matter how carefully you construct a "just right" stock/bond portfolio, no matter how fervently you tell yourself you'll be able to stick with your custom-build allocation, many investors freak out when their stock investments head south and flee from their carefully-thought-out stock and bond models, thereby "selling low" and getting crappier returns over the long haul.

The trick is, either have a cast-iron stomach and ignore plunging assets in your accounts, or forget you have those accounts altogether. (Simple, no?)

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Box Office Of The Weekend

Where animation peppers the Top Ten.

WEEKEND DOMESTIC GROSSES

1). The Jungle Book (DIS), 4,041 theaters (+13) / $10.3M Fri. (-38%) / 3-day cume: $38.8M (-37%) / Total Cume: $248.5M / Wk 3

2). Keanu (WB/New Line) 2,658 theaters / $3.4M Fri. (includes $560K previews) / 3-day cume: $9.1M / Wk 1

3). The Huntsman: Winter’s War (UNI) 3,802 theaters (+11) / $2.6M Fri. (-64%) / 3-day cume: $8.8M to $8.9M (-55%) / Total Cume: $33M+ / Wk 2

4.) Mother’s Day (OR) 3,035 theaters / $2.7M Fri. (includes $225K previews) / 3-day cume: $7.8M+ / Wk 1

5.) Ratchet & Clank (GMY/FOC) 2,891 theaters / $1.4M Fri. / 3-day cume: $5.8M to $5.9M / Wk 2

6.) Barbershop: The Next Cut (WB), 2,310 theaters (-366) / $1.6M Fri. (-47%) / 3-day cume: $5.5M (-47%) / Total cume: $44.1M / Wk 3

7). Zootopia (DIS), 2,487 theaters (-311) / $1.2M Fri. (-30%) / 3-day cume: $4.5M (-31%) / Total cume: $323M / Wk 9

8). The Boss (UNI), 2,823 theaters (-552) / $1.18M Fri. (-38%) / 3-day cume: $3.75M (-39%) / Total cume: $55.65M / Wk 4

9). Batman v Superman (WB), 2,330 theaters (-736) / $927K Fri. (-36%) / 3-day cume: $3.4M (-37%) / Total cume: $324.7M / Wk 6

10). Criminal (LGF), 1,578 theaters (-1,105) / $368K Fri. (-61%) / 3-day cume: $1.22M (-60%) / Total Cume: $13.3M / Wk 3 ...

You will note that animated features occupy the #1, #5, and #7 positions, while the super hero picture with lavish animated visual effects resides at #9.

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The More Things Change ...

Per the Reporter:

As the Demand for Visual Effects Grows, a Shortage of Artists Looms Ahead

There may not be enough artists to meet the every-increasing demand for visual effects shots, participants warned Thursday at the FMX animation and visual effects conference in Stuttgart, Germany.

“The Matrix was only 420 VFX shots. These days, it’s 2,000 [shots], certainly on a Marvel film, and they have gone up to releasing one more movie per year,” said Diana Giorgiutti, executive producer of features at Luma Pictures and a former Marvel producer. ...

Lionsgate’s senior vp of VFX Kathy Chasen-Hay feels it's “hugely risky” to go to just one VFX facility if a film has more than 500 VFX shots. “You just don’t know how much it will grow. You get a directors cut, and it’s easily 1,000 shots. You risk not delivering."

“There needs to be an understanding of how long things take; I try to keep an open dialog [on changes],” she continued. “There is such a huge benefit to the digital age, but also with the digital age, everything is instant. The director can keep changing things up to the DI [digital intermediate color grading stage]. We can even change the DCP [the digital equivalent of a film print], because we want to accommodate the creative. We want to accommodate the director.”

She added that a VFX project might start with a 30 percent profit margin "but when you're finished, you're lucky if it's 5 percent margin, because you can't control the creative." ...

Twenty years ago, I stood in a hallway at Disney Feature Animation North where Dinosaur was being made at great expense. A CG Supervisor was in an open door, talking about how demand for CG artists had outstripped supply, and CG animators, tech directors, and compositors were in great demand. And he said:

You watch, supply will catch up to demand, And we're not gonna have the leverage we do now. And studios are going to sub-contract to visual effects houses because they're seeing it's cheaper to farm the CG work out to hungry visual effects houses than do it themselves.

VFX studios make low-ball bids to get the work and then bankrupt themselves getting the work out. The studios have no problem with this, it makes the movies they make less expensive. No studio will have its own VFX department. ...

Two decades on, the supe's prediction has pretty much panned out. Supply DID catch up to demand, and outsourcing is now a global pastime, with Canada, Britain, France and various states in the U.S. of A. offering free money to our fine entertainment conglomerates when they come and do movie-making and visual effects to this or that geographical location. (Such a deal. Such subsidies!)

We're now at a time when animation and live-action visual effects have expanded so much that experienced workers are difficult to find. But the pendulum will swing back, as it always does.

And studios will continue to sub-contract the work, because it saves them money. Lots and lots of money.

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What's In The DWA deal For Comcast?

Deadline editor David Lieberman answers his own questions:

WHY DID COMCAST BUY DREAMWORKS ANIMATION? BECAUSE IT CAN.

DWA’s animation operations will become part of Universal Filmed Entertainment Group while co-founder and CEO Jeffrey Katzenberg consults for NBCUniversal and becomes chairman of DreamWorks New Media — a potential spinoff candidate. He’s scheduled to talk with analysts on May 5, when DWA releases its Q1 earnings.

Here’s the apparent rationale for the deal, and state of play for the newly engaged companies:

Q: Why does Comcast want DWA?

A: Executives say that DWA will help NBCUniversal’s film animation and consumer products businesses, develop characters for theme park attractions, and provide TV shows for kids.

Q: That’s it?

A: DWA is cheap.

Q: Cheap? Analysts say that Comcast’s paying a high price for DWA.

A: This depends on your perspective. True, the $41-a-share offer is 51% higher than DWA sold for before news about the talks leaked. But the studio’s shares were beaten up in the beginning of 2014, and have been stuck in neutral since then.

Q: Still, $4.1 billion is a lot of money.

A: Comcast can buy DWA without breaking a sweat. It has a market value of nearly $150 billion, making it 36.5 times bigger than DWA. The cable giant says the deal won’t interfere with its vow to spend $5 billion this year repurchasing shares. It apparently didn’t hire an investment bank to help with the deal. And its investors don’t seem to care: Comcast shares are up less than 1% since Tuesday. ...

I would say the answer is simple.

Universal had a good movie year, but it would like more rides and characters to populate its amusement parks. It desires more merchandisable brands and sees how profitable and effective cross-purposing and "synergy" is for Disney.

If the House of Mouse can make itself a mint doing these things, why not the House of Uncle Carl Laemmle and Woody Woodpecker? Other conglomerates are catching wise to the Disney corporate model and striving to emulate it. Right down to having one animation exec run two studios.

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Jeffrey K. Speaks

Per a fine entertainment journal:

... "The next chapter of our company’s historic journey begins today, and as I’ve said many times, there is no doubt that the best days for DreamWorks lie ahead.

"This was not a deal that we [DreamWorks Animation] needed to do, but it’s the deal I’d always hoped would come along. Not only are we passing the baton to a company that understands and values our brand, but it’s also a place that will nurture and grow our businesses to their fullest potential.

I rest easy in knowing that the house of dreams we’ve spent the past two decades building together – the stories, the characters, the joy and the laughter – has found the best possible home; a home where its future is secure and its legacy is embraced.

As always, thank you for the amazing work you do every day, and most of all, thank you for the laughter we’ve shared together.” ...

I was told by a DWA employee that Jeffrey also said the new owners wanted to develop a lot of new pictures.

These kinds of meetings are to boost morale in times of change and accompanying stress. I've been here a while and I've seen lots of studios do the reassurance thing: calm anxious hearts, say everything will be stable and ice, no layoffs so don't worry.

But seriously? I expect that DreamWorks Anmation will have some reorganizating ahead of it, with downsizing in one segment of the company and expansion in another. Chris Meledandri uses a different corporate model than Jeffrey does, and Chris will be calling a lot of the shots. It's anyone's guess what becomes of DWA's upper management; down the road, changes will probably be happening there as well.

Add On: And with Jeffrey now picking up his many marbles and heading for DWA's egress, The Wrap stumbles on to an obvious point:

... [Chris] Meledandri [now becomes] Universal’s own version of Disney’s John Lasseter, who runs both Pixar and Disney Animation. The DreamWorks acquisition has also turned Universal into a major animation powerhouse that can now compete with Disney.

Illumination has “The Secret Life of Pets” and “Sing” hitting theaters this year, with “Despicable Me 3” and “How the Grinch Stole Christmas” due in 2017. All are expected to come out on time. ...

A couple of observations: John Lasseter started out in the artistic ranks at Disney in the late seventies. Chris Meledandri served at Disney a bit later in the executive ranks. At the time he worked in live-action.

But yeah, they both head up animation studios. And both have been wildly successful. But there are major differences in backgrounds and business styles.

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Consummation

Now with the Add Ons.

Jeffrey's dream comes true.

On Thursday, Comcast (CCV) said shareholders in DreamWorks will receive $41 in cash per share of stock -- a roughly 50% premium from where the stock was trading before the merger talks were reported earlier this week.

Comcast said it expects the deal to pass regulatory muster and take effect by the end of the year. The deal is reminiscent -- albeit on a much smaller scale -- to Disney's 2006 acquisition of Pixar for $7.4 billion.

Both Comcast and DreamWorks are smaller than Disney and Pixar, respectively, but the ambitions are similar. Comcast said DreamWorks "will become part of the Universal Filmed Entertainment Group, which includes Universal Pictures, Fandango, and NBCUniversal Brand Development." ...

This deal has been a decade-plus in coming. Mr. Katzenberg has long known that being an animation division of a conglomerate is less nerve-wracking than being a stand-alone living release to release. (Two theatrical under-performers in a row and you're in trouble.)

In recent years, DreamWorks Animation has moved away from the Pixar model of releasing nothing but smashes because it's tough to do and DWA has had its share of non-hits. (Even Pixar has stumbled with recent release The Good Dinosaur.) DreamWorks Animation was expanding into television, on-line content and amusement parks, much as Walt Disney Productions did in the 1950s. The company was also beefing up its merchandising division.

But now the wobbly ground on which it's been walking the past few years will grow more solid. As of today it's not a stand-alone animation studio anymore, but part of the Universal family.

Add On: In exchange for getting a big new pile of money to stack atop the pile he already has, Jeffrey Katzenberg won't be running the DWA ship anymore.

Jeffrey Katzenberg, the Hollywood mogul whose name has been synonymous with DreamWorks Animation, will step down as chief executive after his company is sold to Comcast Corp.'s NBCUniversal.

After the deal closes, Katzenberg will become chairman of DreamWorks New Media, made up of the company’s stakes in Awesomeness TV and NOVA, NBCUniversal said Thursday. In addition, Katzenberg will serve as a consultant to NBCUniversal. ...

And the new kingping will be ...

With Jeffrey Katzenberg eventually stepping into a new role as chairman of DreamWorks Animation New Media, Chris Meledandri, who started Illumination Entertainment nine years ago, is officially and unequivocally the town’s animation czar. With the Minions and Despicable Me franchise successes alone, you could argue he already was. But after the announcement this morning of Comcast NBCUniversal’s agreement to acquire DreamWorks Animation for $3.8 billion in cash, all eyes have now turned to Meledandri. ...

So how will the structure of DreamWorks Animation change over time? Will current executives at the top, Ann Daly and Bonnie Arnold and Mireille Soria, stay on? How long before the wheelhouse changes some of all of its crew members? Hard to say. But I'm guessing that changes will be coming over the next eighteen months. It almost invariably happens. ...

Add On Too: Who could see this coming?

DreamWorks Animation has resumed trading up 24.2% -- hitting its highest level since 2010 -- after a halt tied to its $3.8B acquisition deal with NBCUniversal.NBCU parent Comcast (is off 0.4% after making the very Disney-like move. Speculation yesterday had turned to Comcast's interest in DWA focusing on what it could do for theme parks and consumer products rather than the film slate itself. ...

Add On Three: Trade papers proclaiming Mr. Meledandri the new King'Czar of Animation are being a wee bit ... ahm ... myopic. What is John Lasseter? A lightweight also-ran? There is one Czar in Cartoonland.


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Watership II

Finally. There's a new take on an old animated feature not made by Disney:

... First announced last year by British broadcaster the BBC and due to air in 2017, the four-part CGI miniseries [Watership Down] will now see John Boyega, James McAvoy, Nicholas Hoult and Ben Kingsley voicing a group of rabbits — led by the brave Hazel (McAvoy) and visionary Fiver (Hoult) — with Netflix also having come aboard to premiere the drama globally outside the U.K.

A co-production between BBC One and Netflix, the new 4x1 hour interpretation of Watership Down is being developed and produced by growing U.K. production and management company 42 alongside Noam Murro’s Biscuit Films. Murro, who helmed Smart People and 300: Rise of an Empire, also is set to direct.

Written by BAFTA-nominated Tom Bidwell, the series also will feature the vocal talents of Gemma Arterton (Quantum of Solace), Freddie Fox (Pride), Anne-Marie Duff (Suffragette), Miles Jupp (The Thick of It) and Olivia Colman (currently seen on AMC's acclaimed spy thriller The Night Manager). ...

Watership Down's CGI animation team is being led by co-director Pete Dodd (Fantastic Mr. Fox, Frankenweenie) and producer Hugo Sands, along with the animation studio Brown Bag Films, based in Dublin. ...

The talking animal sector of animation continues to expand, and continues to grow worldwide. Kung Fu Panda 3 was produced in California and China; Zootopia got created in California; The Jungle Book was animated in the United Kingdom while Watership Down will be made in Ireland. (Interesting wrinkle: Ben Kingsley, one of the leads in "The Jungle Book", will also be part of the acting ensemble in "Watership Down".)

And funny how all these hit animated features refuse to crowd themselves out of the marketplace simply because movie pundits says that they should. All the released features named above were global hits.

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And Comcast Buttons Up

Comcast, she doesn't like to talk (apparently) about the ongoing talks to acquire DreamWorks Animation:

Comcast loves news about potential deals when it appears on its CNBC. But when the cable giant is the subject of reports it would rather not discuss — as it is this morning following last night’s disclosure of its interest in DreamWorks Animation — then it describes the journalism pejoratively as mere “rumors” and “speculation.”

The company used the belittling terms this morning to explain why it would not discuss the news in a quarterly earnings call with analysts.

Wall Street seems to think more highly of the reports: DWA’s shares are up about nearly 18% this morning. ...

I'm sure the two companies wanted to keep the acquisition/merger discussions on the low-down, but it's hard to keep a secret in the city of zazz and flash, where rumor-monger and trading scuttlebutt (usually amended with "you didn't hear this from ME, but ...") is the coin of the realm.

But it's certainly no secret that Mr. Katzenberg has worked to sell DreamWorks Animation to the highest bidder for a long time. And there's this long-time track record of secret talks becoming unsecret, and irritating the primary negotiators.

Add On: Word reaches us that these Comcast/DreamWOrks Animation talks have been going on for some time, and are only now being "discovered" by the financial and entertainment media.

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Soon Part of a Conglomerate??

It looks like Jeffrey K. is going to get where he wants to be.

Comcast, the cable giant and owner of NBCUniversal, is talking to DreamWorks Animation about an acquisition for “more $3 billion,” the Wall Street Journal reports tonight citing “people familiar with the matter.”

Comcast LogoIf that’s true, then DWA shares could soar on Wednesday: The company has a market value of $2.34 billion based on Tuesday’s closing stock price of $27.12. The matter is likely to come up Wednesday morning when Comcast talks to analysts after it releases its Q1 earnings report. ...

The cable company effectively would tear a page from Bob Iger’s playbook at Disney: He has succeeded by picking up companies including Marvel, Pixar and Lucasfilm that develop popular franchises. Disney then markets and repurposes them worldwide through its theme parks, television networks and consumer products operations.In this case, DWA offers franchises including Kung Fu Panda, How to Train Your Dragon, Shrek and Madagascar that Comcast could deploy in its own parks and networks. ...

Various executives have told me that Mr. Katzenberg has been working on a merger for a bunch of years. Several times, merger talks have broken into the public prints (pixels?) only to end up unconsummated.

Comcast already has a nice little animation company called Illumination Entertainment. If the purchase of DreamWorks Animation comes to pass, it will have two*.

* Not counting Universal Cartoon Studios, now semi-languishing but a division of Universal that has been around since the early 1990s.


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"Joke" Is a Killer

So Warners has dropped another The Killing Joke trailer.



The press release and other literature reveal that the movie is relatively faithful to its source material, earning itself an "R".

As more than one animation artist who works the Super Hero circuit has said to me:

"Marvel makes the best live-action versions of its comic books, but Warners wins the cup on the animated side." ...

The Killing Joke rolls out this coming July.

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The 7D Fold Their Tents

This has been known to the departed crew for some time:

The 7D TV series has been cancelled after two seasons on Disney XD. Although there has been no official cancellation announcement, co-executive producer Tom Warburton (aka “Mr. Warburton”) has confirmed production on The 7D has ended. ...

The board artists, directors and writers for the show worked in the Yahoo Building near the Bob Hope Burbank Airport. People have been departing for the last few months as one part department after another wrapped up its work.

The show's staffers, top to bottom, were all solid professionals. Sorry to see them go.

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Oncoming Diz Co. Titles

Now with ADD On.

You will note that the animated library of the House of Mouse continues to play a role in unreleased (and unmade) Disney live action features.

... Disney has staked out a number of primetime release dates for its upcoming live-action fairy tales, even if the studio has yet to say which movie will open when. ...

Studio insiders say one of the release dates announced Monday will go to The Jungle Book 2, which is already in the works, even as Warner Bros. preps its own Jungle Book for Oct. 19, 2018. Disney won't comment, but it's possible Favreau's sequel could be ready in time for the August or November 2018 slot, putting it in the direct path of the rival Jungle Book, directed by Andy Serkis.

Other Disney titles that will fill the slots include Cruella, starring Emma Stone; A Wrinkle in Time, directed by Ava DuVernay; Jungle Cruise, starring Dwayne Johnson; director Tim Burton's Dumbo; a Mary Poppins sequel from helmer Rob Marshall that is set to star Emily Blunt and Lin-Manuel Miranda; Maleficent 2 with Angelina Jolie; and a Tinker Bell film starring Reese Witherspoon. ...

What's striking about this lineup of films is: If there wasn't an abundant orchard of hand-drawn animated features -- 101 Dalmations, Dumbo, Sleeping Beauty, The Jungle Book and Peter Pan -- the pickings would be slim.

But you can hardly blame Diz Co. for re-imagining the old classics in newer CG/live action versions. Most of the titles already created have made piles of cash. And when you have a profitable catalogue, you exploit the catalogue. It would be very uncorporate not to.

Add On: But of course, there are MORE animated feature do-overs than are listed above. To wit:

... Disney is moving full steam ahead with adaptations that pull from its classic annimations. New live-action fodder is coming from princesses, villains, supporting characters and fairies, alike. ...

Some exec in an office at 500 South Buena Vista Street, Burbank, California is (this very minute) saying: "Why didn't Walt make MORE animated features?! Why?! WHY??!!"

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The Animation Guild Golden Award Interview #22 -- Martha Sigall

Martha Goldman Sigall was in the sound cartoon industry almost from its beginning. Her start in the business came at Pacific Title and Art Company, where she was present for the birth of Bugs Bunny (referenced in the video). Martha had a long and storied career in animation, capsulized exceedingly well by Harvey Deneroff at Cartoon Research, so there's no need for me to regurgitate the same biography here.



I knew Martha for a lot of years, and she was always warm, gracious, and ready to recount what Cartoonland was like back when it was a colorful, riveting subset of full-length motion pictures, populated by artists who never made much money but knew how to have a good time ... and laugh at themselves.

Martha ended up being one of the last living Schlesinger employees with first-hand knowledge of the "way things were" back at the start of Daffy, Bugs and Porky Pig, and her memories remained crystalline until the end of her long and well-lived life.

Martha Sigall passed away, aged 97, in 2014.


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International B.O.

Now with Add On.

As I'm pressed for time (weekends can do that), a truncated foreign box office, with Rentrak chart and other commentary later.

From your friendly Nikki Finke-founded trade paper:

With a $96M weekend in international markets, The Jungle Book is still king of the box office. The frame reps a roughly 32% drop from last week and brings the offshore kitty to $337M. Along with the domestic swing, the global total for Mowgli and the rest of the pack is $528.48M. ...

If you want to understand why animation is currently in high-gear production across the globe, you need only look at Box Office Mojo's 2016 Box Office Winners:

2016 Worldwide Grosses

1) Zootopia
2) Batman Vs. Superman
3) Deadpool
4) The Mermaid
5) The Jungle Book
6) Kung Fu Panda 3
7) Monster Hunt ....

And so on and so forth. What leaps out at you is the number of pictures that are A) outright animated features, B0 are hybrid animated features, or C) are "live action" features with tons of animated visual effects.

Kind of telling.

Add On: Renttrak gives the numbers:

WEEKEND FOREIGN BOX OFFICE -- (WORLD TOTALS)

The Jungle Book -- $96,000,000 -- ($528,477,426)

Zootopia -- $10,800,000 -- ($907,135,606)

Batman Vs. Superman -- $8,300,000 -- ($851,601,603)

Kung Fu Panda 3 -- $4,600,000 -- ($503,850,195)

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Animation Round Up

I should be home on the couch blogging my wrinkled backside off, but I'm in Las Vegas, going to shows and generally fluffing off, so here's this:

It was confirmed recently that Warner Bros.’ animated adaptation of Batman: The Killing Joke would be rated R, to the delight of many fans of the source material. If studio confirmation wasn’t sexy enough for you, however, then you’ll probably enjoy this delightful reassurance from long-time voice actors of Batman and Joker respectively, Kevin Conroy and Mark Hamill:

Kevin Conroy: "Yes Killing Joke will be rated 'R'. It's compelling, complex, and couldn't be compromised to get a different rating." ...

I run across animation professionals that are chapped that the media keeps referring to TJB, as a "live action" feature when ... ahm ... it's pretty much not.

But it's not like it hasn't happened before, right? Animation, despite its profitability, doesn't have the sparkling luster of its live-action cousins.

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American Box Office

Another weekend with an abundance of talking animals as the animated Zootopia and The Jungle Book hold nicely.

WEEKEND BOX OFFICE

1). The Jungle Book (DIS), 4,028 theaters (0) / $16.4M Fri. (-49%)/ 3-day cume: $60M-$62M (-41%) /Total Cume:$192.7M/ Wk 2

2) The Huntsman: Winter’s War (UNI) 3,791 theaters /$7M-$7.3M Fri (includes $1M)/3-day cume: $19M-$20M/Wk 1

3). Barbershop: The Next Cut (WB), 2,676 theaters (15) / $2.9M Fri. (-59%) / 3-day cume: $9.4M (-53%)/Total cume:$34.6M/ Wk 2

4). Zootopia (DIS), 2,798 theaters (-411) / $1.85M Fri. (-16%) / 3-day cume: $6.8M (-17%)/ Total cume: $316.6M / Wk 8

5). The Boss (UNI), 3,375 theaters (-120) / $1.89M Fri. (-39%) / 3-day cume: $6.1M (-38%) / Total cume: $49.6M / Wk 3

6). Batman v Superman (WB), 3,066 theaters (-439) / $1.46M Fri. (-40%) / 3-day cume: $5.4M (-40%)/ Total cume: $319.4M / Wk 5

7). Criminal (LGF), 2,683 theaters (0) / $1M Fri. (-51%)/ 3-day cume: $3.5M (-34%) /Total Cume: $11.2M/ Wk 2

8). My Big Fat Greek Wedding 2 (UNI), 1,749 theaters (-548) / $668K Fri. (-32%)/ 3-day cume: $2.2M (-31%)/ Total cume: $55.5M / Wk 5

9). Miracles From Heaven (SONY), 1,264 theaters (-818) / $327K Fri. (-40%)/ 3-day cume: $1.15M (-39%)/ Total cume: $58.8M / Wk 6

10). God’s Not Dead 2 (PURE), 1,100 theaters (-485) / $335K Fri. (-37%) / 3-day cume: $1.18M (-37%)/ Total cume: $19M / Wk 4 ...

So The Jungle Book remains firmly entrenched at #1, declining a mere -41% from its gargantuan debut, and Zootopia is well above $300 million in the fourth position.

A glut of animated features seems to be holding back box office potential, correct? I mean, should TBJ be nudging against a second $100 million? Should Zootopia be clawing at $400 million*?



* This is sarcasm.

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Pay Raise

Per a financial journal:

DreamWorks Animation has filed its proxy statement, and it's disclosed that amid the company's recovery from an off year, pay for CEO Jeffrey Katzenberg more than doubled, to $13.5 M.

That's back around 2013 levels for him. His total compensation fell to $6.38 M in 2014 with the absence of $6 M in non-equity incentive (which returned in 2015). He also received a salary of $2.5M and stock awards of $4.5 M, along with $526,919 in other compensation.

President Ann Daly earned $8 M in total comp ($1.5 M in salary, and $3.5 M in stock awards along with $3 M in non-equity incentive) and CFO Fazal Merchant earned $4.65 M. The company's former chief global brand officer, Michael Francis, earned $3.24 M in 2015.

After declining nearly 35% in 2014, DreamWorks Animation's stock rose 12.2% last year. It's up 5.3% YTD. ...

Jeffrey's paydays are a fraction of Robert Iger's income, but hey. DreamWorks Animation is a teensy bit smaller than Diz Co., though it's making similar moves to what the House of Mouse was doing when it was a struggling studio in the early 1950s: new media, amusement parks, television and movies.

But it's good to see that Mr. Katzenberg and his company are back on track after the under-performing animated features and resulting layoffs. (The Netflix deal has helped a lot, and offered some corporate stability).

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Eric's Couch

The couch bit ...



... where Eric Goldberg works his magic. Nothing further needs to be said.


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On Testing III

Veteran board artist Llyn Hunter continues the discussion about board tests at various Los Angeles animation studios. Everybody agrees the tests are too long, and too often don't lead to jobs, but what to do about it? ...

(Here are Parts I and Parts II) ...

There is no Defense for Requiring Unpaid Work

Response to About Testing and In Defense of Testing, April Peg Board 2016

By Llyn Hunter

First, concerning About Testing: “We have members …totally opposed…heavily in favor…” When there are two sides to an issue, it does not mean that there is equal support for both. I submit there are many more of our members who are taking these tests than giving them, and I know of few people who are happy about giving up their time and labor for no compensation or promise of a job.

That some members may be in favor of testing is not addressing the fact that contracted studios are handing out tests as an absolute requirement to be considered for some positions. In point two of the article, it was stated “You are not required to take a test,” yet several of the jobs posted with the union have the side line that candidates “MUST” take a test in order to be considered (i.e. Bento Box, April, Rick and Morty, March).

In response to the article, In Defense of Testing, the current problem with the tests is not about liking or not liking them. It is about unpaid work for the evaluation of a position.

When it is suggested that WE have the power to shape and control the tests, I suggest that currently this is completely wrong. Every test I have been given in the past two years has had a week turn around time. In that period I have presented at least 3 of 5 tests to the union (two were at the time nonunion shops). The Guild may or may not be able to do anything about the test, but usually they get back to me after I have completed it, and so has everyone else. By then, all the union can do is lodge a protest, and we who have taken the test are out of $500 to $2000 worth of our time.

When the article talks about needing a test to “seal the deal,” that might be understandable if the producers were narrowing the field down to three artists and then handing out the test to finalize a decision, but most of the tests are given out at the cattle call. As to the people looking at the tests. if they knew what they were looking for in the first place, there would not be so many tests handed out. Often there is no indication when applying for a position what kind of show is being produced, and applicants can’t even tailor the samples they send as good examples for the future show. Those supposedly looking at past work don’t appear to want to take the time to look at peoples web sites, they just want to see what each person can do with the current property that is on the table.

It is required by our contract that the tests be “a reasonable amount of work”, but what is reasonable? “Reasonable,” is an abstract term with no solid definition. None of the producers are giving tests that take less than three days to a week to complete, and once again the most unreasonable thing above all, is that we are all doing it for free. Thousands of dollars and days of wasted time that is of no expense to the show runners but are lost hours of our lives. The testers want something for nothing and we are giving it to them because we need the work.

This situation is not about insult; this is about theft and blackmail. It is about studios with advertisements that read, “Every candidate will be tested….” yet does not say how many candidates that might be, and there is no intention of compensating any one for their time or effort in the taking of this test. The abuse of testing is not going to stop because the union “asks” testing to be reasonable. If that worked the excessive tests would not exist let alone be increasing.

I would like to submit the following proposal for the union to adopt an official policy:

Proposal:

To establish an official guild policy, that when submitting materials for the consideration of a position at a contracted studio, no member of the Animation Guild, IATSE local 389, will consider any test given as “a reasonable amount of work” unless compensated monetarily for the work committed for that test. A “reasonable amount of work” shall be defined as that which is compensated by money.

In other words, the policy should be: no member will take a test unless they are paid to take a test.

Requests from the guild that such tests be given only when necessary or that they not be excessive has gone totally unheeded by the studios and the abuse has become excessive. These studios constantly ask for work to be done without the expectation of payment nor the assurance that if the test isadequate, an actual position will be provided to the prospective candidate. It is therefore requested that members of the guild no longer tolerate the inconsideration of guild member’s time, skill and accrued abilities. Should it be requested that a member of the guild take a test, that work will be considered unreasonable if there is no monetary compensation given for the work. By giving the definition of “a reasonable amount of work” as that which is monetarily compensated the specifics of Sideleter J can be established by policy.

Please join with myself and others, at the next union meeting May 31st (6:30 for pizza, 7:00 for start) to continue the discussion concerning the addition of this policy or other solution to the insidious problem of testing.

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Glut

CB is dead on.

[Bloomberg] falls back on an old canard that somehow pops up again and again in entertainment reporting: that there’s too much animation being made. Bloomberg quotes entertainment analyst Doug Creutz, who says, “There’s a glut of these type of films at the moment. It’s highly unlikely they’re all going to work.” ...

This twaddle has been ricocheting around the business forever. We've been writing about the phoniness of "Oh my Gawd! There's a flood of animated features! We're all gonna die!"

As Amid says above, and I've said for years. Nah-hanh.


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The OTHER Thing About the New "Jungle Book"

You search on-line, you see reference after reference about the 2016 The Jungle Book being a live-action remake of the '67 classic.

Live Action.

Which is, let's say this forthrightly, a tad confusing, since 93.5% of the picture is animated. In exactly the same way that Toy Story or Pinocchio (using an older technology) were animated.

But of course, the storyboards were executed by live-action artists, every character except Mowgli was created in the same way that animals in Zootopia were brought to life. And the jungles and the temples and the flowing rivers? ALSO created inside a computer. ...

I was at a signator studio today and ran into a high profile animation director who has a long track reord in feature animation. We fell into a long hallway discussion, and the director is as perplexed as I am.

"What makes The Jungle Book live action? Subject matter? That it's a "family picture"? Was Avatar live action because it had violence and wasn't made for little kids? Why is a production designer for Gravity thought of as being part of a live action movie but not the production designer for Zootopia? Why aren't they up for the same awards? The pictures are made the same way, with some of the same people.

Animated features and live action are merging together. But animation gets stuck in its own separate box. ...

I told the director I thought the divisions were artificial and political. As the Washington Post noted, live action continues to have more political leverage at awards time:

... Disney/Pixar’s animated “Inside Out” — clearly one of the best eight films of 2015 — did not receive a best picture Oscar nomination. Yet a film like 2013’s “Gravity,” which relied heavily on digital pre-visualization and animation, did receive a best picture nod.

As the line grows ever blurrier for those charged with drawing such categorical demarcations, one thing is clear: “The Jungle Book” looks to meet all the Academy’s eligibility requirements for competing as an animated feature — from permitted technology to a majority of key characters being animated.

It’s unclear whether Disney wants to test those waters. But when “Jungle Book” animators can digitally paint water that looks more realistic than actual water itself, then nothing seems beyond the bounds of the studio’s imagination. ...

As long as I've been in and around the animation biz, the reality has been the same: Animation is cordoned off in its own special ghetto, the bastard child of the motion picture industry, the raggedy ass second-class citizen, even as it rakes in large profits. This is why you will never, ever see an animated feature win the "Best Picture" Oscar, even as an animated feature, conveniently labeled "live action" because there's a sprinkling of flesh-and-blood actors in parts of it, does.

As stated previously, 2016's The Jungle Book is an animated remake of the animated original, released 49 years ago.

Add On: And here is yet another article calling The Jungle Book a "live-action remake." One more media outlet drinks the Kool-Aid.

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Questions Answered

Most of the reviews for The Jungle Book have been positive, some even ecstatic. Here's one that asks dumb rhetorical questions:

Will we ever know why Disney remade The Jungle Book?

Sure. It was the same reason they remade Cinderella. And are remaking Dumbo. And took a new whack at putting the villainous Maleficent in a movie. Or why they remade the 1977 Star Wars with a gender-flipped version of the old plot-line. Moe. Ney.

Disney thought there was significant coin to be made ... and Disney was RIGHT. ...

Can you call a movie that’s 90 percent computer animation live-action?

Sure. You can call it the Brooklyn Bridge if you want to. But it's still an animated feature film.

See, we have this weird, unhinged point-of-view. If you can't make the movie in a live-action environment with a camera -- and this one didn't -- then it's not a live-action movie.

... I can’t think of anything the new version of The Jungle Book does better than the original animated version—and if you can’t do it better, why even bother?

At the risk of repeating myself, $$$$$.

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Nintendo Anime

A new short to market a new video game.

... Nintendo has brought out a new CGI anime short that sets the stage and reintroduces the furry space mercenaries [in Star Fox Zero] to the world. The short was made by Production I.G. and WIT Studios, who have made top anime shows like “Attack on Titan” and “Ghost In The Shell.” ...

Shigeru Miyamoto, Nintendo's legendary game designer, created the short, working with the studio that made “Attack On Titan,”.

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Fallout From Success

This seems like a wise move.

Now that Warner Bros has pushed the release of its version of Jungle Book, the studio and director Andy Serkis have prevailed upon none other than the Oscar-winning Gravity director Alfonso Cuaron to come in and give notes on the project and see if there are ways to take the extra time to improve the picture. Insiders stress that Cuaron is a friend to the studio and there is sensitivity to this being misinterpreted as Cuaron taking over this movie. Production has been completed, but the filmmaker is doing this in an uncredited capacity.

Why not? Benedict Cumberbatch, Christian Bale, Cate Blanchett, Matthew Rhys are part of the all star cast, with Serkis playing Baloo as well as helming and producing. Callie Kloves adapted the Rudyard Kipling tale. Disney beat this film to the punch, and its Jungle Book has become such a big hit, there really is no reason to rush. Earlier this month, Warner Bros pushed the release date from October 2017 to October 2018. ...

And, of course, Disney has already announced everybody will re-team for a sequel. Since the current offering will likely close in on a billion dollars before all the turnstiles stop twirling, there's no surprise about that, whatsoever.

The studio's animated catalogue has provided a veritable gusher of greenbacks: 101 Dalmations, Cinderella, Malificent, The Jungle Book, the upcoming Dumbo ... there are dozens of titles from which to squeeze dollars. And it will continue until the Mouse has made Snow White and the Eight Dwarfs and figured out a way to redo Victory Through Air Power in CGI.

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Free Money Helps

That's why geographical locations use it. even when it's only marginally useful.

On-location film and TV production is booming in Los Angeles, thanks in part to the state’s $330 million annual tax incentives program. On-location feature film production was up 23.7% for the first quarter of 2016 compared to the first quarter of 2015, and TV production was up 19.1%.

Compared to the average first quarters of each of the last five years, on-location film production was up 22.1%, and TV production was up 17.4%, according to data compiled by FilmLA, the city’s film permit office.

“The very encouraging first quarter numbers from FilmLA demonstrate the impact of California’s expanded tax credit program,” said California Film Commission executive director Amy Lemisch. “They illustrate that the Film & Television Tax Credit Program 2.0 is working precisely as intended to attract and retain all types of productions, especially TV projects that create steady long-term jobs for cast and crew.”

Even so, the vast majority of the increased production came from films and TV shows that did not receive tax credits. Of the feature film that shot in the city during the first quarter, only 155 shooting days (13.5% of the total 1,145) were generated by films such as God Particle and Please Stand By that received tax incentives. ...

In Cartoonland insie California, tax subsidies are non-existent ... except for live-action visual effects. Nevertheless, the Guild has experienced steady growth over the last three years, attributable to the continuing success of animated features and the profitability of TV animation.

Another powerful driver has been the rise of Subscription Video on Demand (SVOD for fans of acronyms). Netflix and Amazon have been major players in kids' programming, much of which has been cartoons. DreamWorks Animation TV recently extended and expanded its pact with Netflix, and Amazon not only has its own L.A.-based studio, but engages a plethora of small cartoon shops to create content.

We get asked: How much longer will these good times last?" The answer is, barring some natural or man-made disaster, some years yet.

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The Global Animation Marketplace

While Zootopia (made in California) and The Jungle Book (made in California and London) are cleaning up at the world box office, this is happening:

New Zealand's Huhu Studios has signed an $86 million deal with a Chinese "powerhouse in the animation industry" to co-finance and co-produce five movies.

The deal between the Snells Beach digital media studio and Qingdao's DeZerlin Media should create 72 jobs in New Zealand, says Huhu's co-founder and chief executive Trevor Yaxley.

The agreement, signed in China yesterday during Prime Minister John Key's visit, will see Huhu and DeZerlin make the five animated movies over the next three to four years, with one aimed to enter production every nine months.

Yaxley said the contract was worth around US$60 million and about two thirds of the work from the deal should come to New Zealand.

The pictures will be created in English but also dubbed in Chinese for that market. ...

Below the gargantuan cartoon blockbusters -- mostly created by Disney, Blue Sky Studios, Illumination Entertainment (etc.) -- there are a raft of smaller productions done on smaller budgets and making tidy profits.

Many of these movies American audiences don't notice very much because they either roll out in very limited domestic releases ... or they don't get a theatrical play in the United States at all. (Like for instance this).

There are a lot of cartoons made abroad that fly under our radar. The deal above is just one more example of the scope of the global animation industry.

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Booster Rockets Kick In

From a digital financial journal:

Disney up 3% now after blockbuster rollout from 'Jungle Book'

Disney stock is still riding high today, +3%, after a triumph at the weekend box office with a re-imagining of The Jungle Book.

The film crested $103M to easily surpass another debut, Barbershop: The Next Cut, which took the No. 2 spot with $20.2M. The Jungle Book (which opened slightly ahead overseas) added $189.9M in a foreign take to make an impressive worldwide total of $293.5M.

Earlier, Pivotal Research upgraded Disney to Buy and gave a 17% boost to its price target for the stock. ...

Now that Diz Co's board of directors has nixed Robert Iger's heir apparent Thomas Staggs, and the man will now be walking off into that bright, Hollywood sunset, what are the odds that Bob Iger will be staying on past 2018? I would say ... ahm ... quite good.

Because, as the smart money says: "If it's not broken or even squeaking very much, don't freaking fix it!!"


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Unionization

If you loathe and despise labor unions, then this is probably an upbeat time for you, since unions' overall strength has declined -5.7% in the U.S. over the past decade. (The fact that overall wages are stagnating is no doubt just an unfortunate coincidence). California has actually had an increase in unionized worker, and now ranks 6th among the fifty states in organized workers.

6. California
> Pct. of workers in unions: 15.9%
> Union workers: 2,486,173 (the highest)
> 10-yr. change in union membership: 2.6% (18th highest)
> Unemployment rate: 5.5% (11th highest)

California has by far the largest unionized workforce in the country. There are close to 2.5 million union workers in the state, greater than the combined membership of 23 other states. While this is at least partially because California is the most populous state, it also has the sixth highest union membership rate — 15.9% of workers in the Golden State are active members of organized labor. Public sector workers are much more likely to be unionized than those in the private sector, and about 56% of the state’s workers are employed by governments are in unions. The state’s substantial unions were part of the effort to raise the minimum wage in California to $15 an hour. Governor Jerry Brown signed the wage hike bill last week. ...

It's always tempting for the partisans among us to link one data point to another. ("High unionization means high unemployment! Everyone knows that!")

Except ... economic activity is never caused by one small, single driver but rather a combination of ingredients. How else to explain why Hawaii, with the second highest concentration of unionized workers in the U.S. of A., has the 6th lowest unemployment rates with 3.1%? Or that South Carolina, with the lowest percentage of unionized workers (2.1%) has the 11th highest unemployment rate (5.5%).

Which, come to think of it, matches California's unemployment rate to the decimal point.

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The Animation Guild Golden Award Interview #21 -- Willis Pyle

Willis Pyle, who's brother was known as Denver and uncle was named Ernie, dropped out of the University of Colorado to answer Walt Disney's clarion call to come work at the House of Mouse. Willis arrived at Disney's Hyperion Studio in 1937 as a traffic boy and artist-in-training. Soon promoted to in-betweener and then assistant in Milt Kahl's unit, Willis worked on Pinocchio, Fantasia and finally Bambi before departing for a six-month stint at Walter Lantz's studio.



When World War II broke out, Willis Pyle found himself in the Army Air Corps animation unit, where he worked under Frank Thomas. After de-mobilization, he spent five years at UPA before moving to New York where he had his own small studio called (naturally enough) Willis Pyle Productions. As he neared seventy, he changed careers completely and became a fine arts painter. ...

One would gather, based on the above, that Willis Pyle does not let the grass grow to great heights beneath his feet. And he seems to maintain a sunny outlook on day-to-day existence. Though Willis hit the bricks during the Disney strike of 1941, he has only gratitude and admiration for Disney, who, he says, gave an art education that he's used his whole long life.

You'll find a video of Willis Pyle's 100th birthday bash here.

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The Daffster

Professor/President Emeritus Tom Sito informs us:

April 17, 1937 "Porky's Duck Hunt" The birthday of Daffy Duck.

One legendary story is that newly-hired voice actor Mel Blanc in part designed Daffys distinctive lisp to be an impression of the Looney Tunes boss Leon Schlensinger.

When they screened this cartoon all the artists stood in dread of how Leon would take the joke. Leon never made the connection that the Ducks voice was an imitation of him:" Gee Fellers, dat Duck iz pretty Ffffunny!"

The cartoon below (Don't ask me why this is in three segments; I can't tell you):

CHAPTER ONE



CHAPTER TWO



CHAPTER THREE



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Prognostications

So the trades do their usual speculation about why The Jungle Book did better than the prognosticators thought it would:

1. The X-Factor.

2. Social Media.

3. Great Reviews.

4. Disney’s Track Record.

5. Nobody Wants to Over-Predict. ...

Shorter answer: Everybody's looking in the rearview mirror. Everybody's just making educated guesses that, when you strip the three and four-syllable words away, aren't that educated.

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International Box Office

Three animated features, all with fuzzy animals that talk, ride the box office list this week.

WEEKEND FOREIGN BOX OFFICE -- (WORLD TOTALS)

The Jungle Book -- $136,100,000 -- ($290,967,000)

Batman Vs. Superman -- $15,100,000 -- ($827,311,730)

Zootopia -- $10,800,000 -- ($882,278,756)

Kung Fu Panda 3 -- $10,500,000 -- ($496,708,837) ...

Meantime, the trades tell us that the animated sector of the movie business is doing well.

... After starting out in just 15 markets last frame and taking the No. 2 spot at the international box office, Disney’s The Jungle Book swung into No. 1 in its expanded sophomore session with a kingly $136.1M. The offshore cume is now $187.4M in 49 territories where it’s tracking +55% over Maleficent, +95% over Cinderella and +174% over Oz: The Great And Powerful. ...

Batman vs Superman has an international cume of $516M after adding $15.1M. It is now the 6th biggest superhero film of all time and the top Warner Bros movie ever in India, Indonesia, Malaysia, the Philippines and Vietnam. ...

Disney’s other animal extravaganza [Zootopia] picked up a further $10.8M in its 10th weekend of overseas release. The international total is now $574.8M for a worldwide cume of $882.28M and before it hits Japan next session. ...

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Unveiled At Tribeca

... on April 18th.

Invasion!, a narrative virtual reality short written and directed by Eric Darnell, director of the Madagascar films, will have its world premiere April 18 during the Tribeca Film Festival. ...

Invasion was created at the startup virtual reality production company Baobab Studios, which was formed in 2015 by Darnell, who comes from DreamWorks Animation and serves as Baobab's chief creative officer, and Maureen Fan, a prior vp of games at Zynga, who serves as CEO. ...

Don't know how far this new company will travel on the Virtual Reality platform, but the short amused the hell out of me. With luck they'll make the concept work.

(Single-eye trailer at the link.)



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The Weekend Frolic of Animal Animation

So there are two animated features out that are heavily populated with animals:

WEEKEND DOMESTIC BOX OFFICE

1). The Jungle Book (DIS), 4,028 theaters / $32.4M Fri. (includes $4.2M previews) / $41.1M Sat. (+27%) / $26.7M Sun. (-35%) / 3-day cume: $101M to $103.6M / Wk 1

2). Barbershop: The Next Cut (WB), 2,661 theaters / $7M Fri. (includes $735K previews) / $8.15M Sat. (+17%) / $4.9M Sun. (-40%) / 3-day cume: $20M+ / Wk 1

3). The Boss (UNI), 3,495 theaters (+15) / $3M Fri. / $4.4M Sat. (+43%) / $2.6M Sun. (-40%) / 3-day cume: $10M+ (-57%) / Total cume: $40.3M / Wk 2

4). Batman v Superman (WB), 3,505 theaters (-597) / $2.36M Fri. / $4.1M Sat. (+70%) / $2.68 Sun. (-35%) / 3-day cume: $9.2M / Total cume: $307M+ / Wk 4

5). Zootopia (DIS), 3,209 theaters (-235) / $2.1M Fri. / $3.6M Sat. (+73%) / $2.4M Sun. (-43%). / 3-day cume: $8.1M / Total cume: $311.5M / Wk 7

6). Criminal (LGF), 2,683 theaters / $2M Fri. / $2.27M Sat. (+12%) / $1.3M Sun. (-40%) / 3-day cume: $5.67M to $5.8M / Wk 1

7). My Big Fat Greek Wedding 2 (UNI), 2,297 theaters (-730) / $988K Fri. / $1.4M Sat. (+48%) / $M Sun. (-45%) / 3-day cume: $3.2M / Total cume: $52M / Wk 4

8). Miracles From Heaven (SONY), 2,082 theaters (-701) / $535K Fri. / $823K Sat. (+53%) / $530K Sun. (-60%) / 3-day cume: $1.87M / Total cume: $56.9M / Wk 5

9). God’s Not Dead 2 (PURE), 1,585 theaters (-769) / $485K to $490K Fri. / $673K Sat. (+39%) / $570K Sun. (-15%) / 3-day cume: $1.7M / Total cume: $16.9M / Wk 3

10). Eye in the Sky (BLST), 891 theaters (-198) / $452K Fri. / $727K Sat. (+61%) / $400K Sun. (-45%) / 3-day cume: $1.57M / Total cume: $12M to $13M / Wk 6

Box Office Mojo informs us:

Friday estimates are in and The Jungle Book is roaring to life with an estimated $32.4 million opening day. The film is now pushing toward a $90+ million opening, which would be enough for the third largest April opening weekend of all-time, challenging Captain America: The Winter Soldier's $95 million from 2014 for second place on that list. ...

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About the Animated Feature Released This Weekend ...

Of course, it's not being touted as an animated feature, but ... except for the live-action kid running around ... that's what this full-length entertainment actually is.

BARE NECESSITIES

Avatar meets Rudyard Kipling as Bill Pope, ASC, takes a romp through the high-tech jungle in the classic children’s tale

... Storyboards and conceptual art were created by Favreau and Storyboard Artist/Head of Story Dave Lowery and his team of artists, from which MPC’s digital artists under direction of Glass, Jones and Digital Domain’s Virtual Production Supervisor, Gary Roberts – operating as the “Virtual Art Department” or “VAD” – began building the first level of virtual sets. These included combinations of environments, some based on photography of temples and forests taken during visits to India, along with simple “chess pieces” of the film’s characters to create so-called “decimated assets” – those simple enough to function in a video game–like environment. ...

Favreau walked through each scene on a large monitor with a joystick and noted his preferences. “Jon likes a lot of people in the room with a lot of ideas – and then he chooses what he wants and guides you,” Pope shares. “And it was just like a real scout. He’d move the camera around and say, ‘You know, this isn’t a bad angle,’ or ‘He could come down this path.’” In fact, Favreau might determine that a tree or a river was put in an inopportune spot, and, as Roberts recalls, “because it’s rendered in the game engine pipeline, we can make the change in real time, right there.” ...

What's clear to anyone with brain synapses firing is, the chasm between "live action" and "animation" has now disappeared.

When cinematographers are no longer shooting reality but building 93% of the image in a computer, they are mostly a production designer and art director. Because no "there" exists on the far side of the camera lens. The only thing waiting to be photographed is blue screen.

Stripped down to the essentials, and taking the newer digital technologies into account, there is minimal difference between the 2016 iteration of The Jungle Book and 1937's Snow White and the Seven Dwarfs.

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Stalking Horse ...

... TROJAN HORSE!

... The People’s Liberation Army Daily recently branded the [Disney's Zootopia] — a computer-animated buddy-cop film set in a city populated by animals — an instrument of American propaganda. The film has earned more than $230 million in China, ranking it among Disney’s top-grossing films in the world’s second-largest market. ...

The commentary claimed that the filmmakers intended to telegraph subtle messages about the “American Dream” via the role reversal of its animal characters — the film is about a rabbit and a fox attempting to track down predators who have gone missing. The culprit is a diminutive sheep.

“If one thinks carefully about it, if a rabbit can strike back, are there any ‘American Dreams’ ordinary people cannot realize?” it said. “In cruel reality, it is always wolves that eat lambs, not lambs that eat wolves.... Hollywood easily reversed a thing so simple that even kids know it, and thus attracted a huge audience.” ...

Man, I thought the thing was preaching brotherhood, sisterhood, tolerance. Those are Western values? I guess I missed the handout when it was issued.

But apparently Chinese movie-goers aren't buying the bilge pumped out by the PLAD, because there's been a wee bit of pushing back, to wit:

“What else is there for us to watch if we are not allowed to watch ‘Zootopia’ — your brain-damaged Chinese cartoons?” ...

[Or]

“Because the box office is high and everyone likes it, they are jealous,” said another. “Why can’t you reflect on what you can do [yourselves]? Why do we all like foreign programs?”

Funny how people with frontal lobes that function can sniff out the good product from the crap.

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