The economics of animated movies

An executive producer who wants to cut costs has only two choice curbs: water and hair. Those are the most expensive things to replicate accurately via animation. It’s no mistake that the characters in Minions, the most profitable movie ever made by Universal, are virtually bald and don’t seem to spend much time in the pool.

Animation, as with all formulaic and saccharine film genres, tends to bring out Hollywood’s blockbuster gambling addiction. The perverse incentives of the format means that fortune favours the spendthrift — the bigger the budget, the bigger the windfall.

“In some ways, a $90 million movie is more risky than a $150 million one,” Creutz said.

This means that when animated films flop, they flop hard. In fourth quarter 2013, DreamWorks took an $87 million writedown on Rise of the Guardians. Without the charge, the studio would have posted a small profit in the period, rather than an $83 million loss. A few months later, it had to take a $57 million writedown on Mr. Peabody and Sherman, a film that cost $145 million to make and far more to market.

Interesting throughout, here is the article by Kyle Stock.


Isn't it just the best when the direction of our civilization's culture is determined by the whims of children at the toy store.

Come now, faulting capitalism for its seeming lack of 'worthy' artistic creation is what prompted Prof. Cowen to write a book - In Praise of Commercial Culture. (You can click to buy on the left, by the way.)

Hundreds of millions of people want to see crappy movies. Therefore the free market produces lots of crappy movies, making hundreds of millions of people happy.

I suppose the problem is capitalism, in the sense that only an authoritarian system that subverts the will of the people could solve this.

Except that the studios also work hard to generate demand for crappy movies, and they do so quite expertly. The death knell of capitalism will be marketing.

If studios have the power to make you go see a bad movie, then how come so many movies flop?

I have rarely seen a trailer for a bad movie that tricked me into thinking the movie was going to be good. Even if this were possible, most people also check whether a movie is worth seeing by word of mouth, reading reviews, etc.

I hate bad cartoons. Compare the whistling tea kettle in "Fantasia" vs the lame (and cheap to make) graphics of "South Park" or the "Simpsons". Like Mexican food (cheap to make and profitable) the studios do this because their audience doesn't complain, and eats it up. Not unlike fans rooting for their home team regardless of wins and losses--the owners know suckers when they see them and will not field an expensive competitive team. I think the owners of the Philadelphia Eagles during the 1980s was this type owner (he's very frugal, moved to Miami, backs Rubio and also was behind a petition to recall a mayor down there when the mayor increased taxes and state employee salaries), I'm sure there are many others.

You're right. The Simpsons would be so much better if they spent all their money on CGI animated hair instead of jokes.

Fantasia and The Simpsons are both animated, and that is as useful as saying that Ben Hur and Four Weddings and a Funeral were both filmed with actors. Fantasia and The Simpsons were (and are) clearly trying to accomplish different things for different audiences.

Stupid as always, Ray.

Meh. A big flash, boom and bang can make for a good bit of mind numbing entertainment, but I'd easily sacrifice a lot in animation quality out of preference for a good storyline or good jokes. I think South Park is about as far as you can go in this direction (except perhaps for some experimental mind-opening films of the sort sponsored by national film agencies at times), and definitely you don't need anything better than the Simpsons, Family Guy, etc. in terms of animation quality. But, for the children, a lot of the value is in the whiz-bang stuff that makes them go "Wooooow", and this is a rather different market.

Unless what you're really looking for is an advanced show of enpixellated fireworks ... but then, I'd rather see real actors with special effects rather than an animated movie. Even when they can perfectly match all the human stuff in animation, I think at a subconscious level the appeal of a real human rather than animation will always hold a certain sort of appeal. Children, however, hardly have a sufficiently developed sense of self to care one way or the other.

There are people out there for whom photography will always mean more than paintings, and there are the converse. I wouldn't accuse either of an underdeveloped aesthetic, imagination or consciousness.

(Either way, animation or live action, cinema is visual. Shots, photography, transitions are the meat and your story and jokes are really less important. You want story as the meat, read a book, acting as the meat, see a play.).

The accurate comparison is between The Simpsons and the Flinstones. Compare this Flinstone's clip with this Simpsons' clip and the latter is the clear winner.

South Park is a different case. They use more crude animation so they can get the show done in a week and keep it topical. Other animated programs can take a year,

Why did I leave the "t" out twice? Flintstones.

+1 sounds like you know what you're talking about, unlike the other replies to me upstream. Indeed, imagine if you could have wavy GDI hair in an instant, and what it would do to the South Park series or the Simpsons (BTW I've never seen a single episode of South Park, and saw one Simpsons, the one where Crusty the Clown is devoured by nano-particles from a chopped up cat. I laughed).

I thought I had gone deaf, then I recalled that it was way more probable that my computer was malfunctioning, then I remembered that I had taken the earphones off my ears. It was a close call.

Norman Braman (former Eagles owner relocated to Miami) has been the number one opponent of privately financed sports stadiums in Southern Florida.

Yes, and I always thought it held back the wizard of oz not having CGI. I bet if it had better effects and non-stop action, it would really be timeless.

> Animation, as with all formulaic and saccharine film genres…

But animation is not formulaic, nor saccharine, nor is it a film genre.

But the cartoon version of "I Dream of Jeannie" is formulaic, and a film genie. Sweet!

>> Animation, as with all formulaic and saccharine film genres…
>But animation is not formulaic, nor saccharine, nor is it a film genre.

Exactly. I wonder how many animated films the author of that article has actually seen.

He may be correct that big budget animated films tend to be formulaic, but that's because (as his article points out) they are big budget, not because they are animated. A costly film needs to bring in a large audience, and so must have mass appeal.

Even so, Studio Ghibli's work, and works such as Charlie Kaufman's "Anomalisa" and Wes Anderson's "Fantastic Mr. Fox" contradict his claims of formula. And once we get away from the high cost animated films -- i.e. when we look at short animated works -- there's a wonderful profusions of original and imaginative works. Even within the necessarily somewhat formulaic genre of animated films aimed at children, there have been some outstanding films made in recent years, among the best family films ever made (or at least the best ones for adults to watch; I must confess to not knowing how children reacted to say "Up", "Finding Nemo", "Wall-E", "The Incredibles", "The Shaun the Sheep Movie", etc.)

With today's proliferation of young adult fiction, we are heading for a near future when journalists will feel justified in writing off books as a formulaic and saccharine writing genre.

There are a lot of inconsistencies and contradictions in this story. I would be tempted to replace "interesting throughout" with "suspect throughout".

The idea that cheaper animated movies are "more risky" than bigger budget movies in para 2 is contradicted somewhat by the opening example of being frugal on the hair and water production contributing to the financial success of Minions in para 1. OK, the "expert" is then quoted as saying "in some ways"; but, this example proves that "in some ways" the opposite may be true.

Also, it is dangerous to judge the financial success or failure of any project merely by an interim accounting adjustment. A write-down is simply an accountant's best estimate of likely future performance (or, better, non-performance). In this case, "Rise of the Guardian" performed better after that write-down than expected (although it remained disappointing overall):

The article suggests that bigger budget movies may be "less risky"; but, this seems to confuse the budget for production costs versus the overall budget, including marketing and distribution (the latter may often exceed the former). And, the latter seems to have been Rise's downfall (it brought in over $305 million in global box office compared with production costs of $145 million). Or, maybe, budget aside, somebody just had a bad idea of what might make an interesting animated movie.

Finally, I really wonder whether absolute numbers are the best way to judge "risk" in the movie or any other business. Looking at potential upside and downside, I would rather look at the profit or loss as a percentage of the amount invested.

Mr. Peabody and Sherman

Weird, I have a child in the age range for that movie and never knew it existed

I think a lot of the marketing for animated features has been falling flat. I have a child in the target age range for a lot of these movies and first time I hear about a lot of them is when I see a dvd release sign when I'm doing my grocery shopping. For some reason advertisers appear to have forgotten that you can't just advertise to the kid, and a lot of media that kids see is on private small screens these days. Also at this age/point in his life he's receiving what appears to be far less advertising than I did at his age.

Once the most highly developed and sophisticated art form, movies, especially American movies, are now simply mental chewing gum for teen-agers that need a place to meet and play grab butt without adult supervision. Their declining quality is another sign of the coming apocalypse.

The folks in Cannes might disagree with the view that American movies were at the forefront of sophistication at any time in recent generations, but then again, the French have always been a little snobbish when it comes to culture (and are not the least bit ashamed to say so).

Do you have a reading problem?

When exactly were movies the most highly developed and sophisticated art form? When Frankie and Annete were making beach party movies? or later in the 1970s when we all went to see "Smokey and the Bandit" and "Car Wash"?

It's the classic memory bias making everyone think the past was better. People forget that not every old movie was Casablanca.

1938- "The Rage of Paris", 1947- "The Perils of Pauline, 1949- "Stray Dog", 1952-"The Greatest Show on Earth, 1953- "The Bandwagon", 1955-"Love Me or Leave Me, 1963-"Tom Jones", 1969-"Midnight Cowboy", 1976-"Taxi Driver", 1979-"Alien", 1982-"Blade Runner". Only the odd foreign film after that, "La Moustache", "Lust Caution", "Run, Lola, Run".

Of course this is all opinion-based, but I don't see it. I love old movies, but I could name 20 movies from the last 10 years I liked better than Midnight Cowboy or Blade Runner. No Country for Old Men and Gran Torino would top my list, but there are a bunch of recent movies that I think are excellent.

"Once the most highly developed and sophisticated art form, especially American movies..."
Oh, Lord...

I once met a guy who is/was one of the most in-demand makers of animated hair around, or at least he was about 10 years ago. He started up a firm which specializes on nothing but making animated hair for movies, with a top personal specialization in woolly mammoths. I recall some interest in expanding into reptilian scales, but that would be an entirely different area of specialization and take a very long time to master. Otherwise a very "normal" guy ...

Many years ago when Universal first opened in Orlando I took my son for a visit. The highlight was this very large room full of animators (artists) at work creating the animation. That room is empty now. Like Cowen says, hair is expensive.

Zootopia is doing well because it is actually a good movie and got excellent word of mouth, including among adults. I went to see it with my wife (both in our late 20's) after our 30-something always single never-going-to-have-kids friend praised it on Twitter.

Go see Zootopia. It's excellent on all fronts--animation, world-building, plot, character development.

I might indeed go see it. The trailer containing the scene at the DMV starts with an easy and cheap joke at its base, but the scene is well done and includes some good ideas and good animation. So, nothing revolutionary but that was a well-executed scene, good enough to make me want to see the rest of the movie.

My friend's 4 year old was freaked out by Zootopia, but I don't know if that was due to the content of the movie or just him. He does have terrible taste in movies with his favorite one being Planes. (Not even Happy Feet, kid? Throw the Australian film industry a bone, why don't ya?)

Man, how did Disney ever make tangled? (Very good, btw. Best musical and/or princess movie since lion king and until frozen, in my opinion.) Not only does rapunzel of course have lots of hair, but there are some major water-bases set pieces.

Disney has all of the money. I don't think they shy away from expensive animation.

By spending $260m, more than Minions and Frozen combined.

Yeah, I was surprised Tangled wasn't mentioned in the article. Disney spent six years working on the hair problem for the movie. I imagine they have a significant lead in doing hair following it. I haven't seen Frozen, but I imagine it would have shown up there

Tangled was by far the best Disney picture since Lilo and Stitch and maybe since the early Nineties. My theory of why Frozen is so much more acclaimed is based entirely on modern parental, especially maternal, insecurity.

Looking at the list of movies from DreamWorks Animation I see no evidence that budget or technical or story explains which features lose or make money. Maybe bad marketing and distribution deals explains it, or maybe just the public mood at the time the features were released. Or the cost of licensing the rights to existing story and characters sank the deals.

Maybe Kyle is correct on his point, whatever it is, but DreamWorks Animation does seem to support it.

Dreamworks seems to have very different management than other animation studios. It seems to be much more a deal based studio than one where the aesthetics of a boss or small group of bosses dictate production. Ie. Dreamworks is like MGM in the 1980s, everybody else is somewhere along the spectrum of MGM in the 1930s-1950s to something even tighter. Disney animation is more like Selznick International.

"An executive producer who wants to cut costs has only two choice curbs: water and hair."

The third alternative to adopt production values that don't seek to be realistic 4D models of an alternative reality. The anime genre can tell stories with animation quite well with pans of still pictures derived heavily from comic books, and stylized and genre driven artistic conventions that often interject intentionally non-realistic segments to depict emotions using a genre specific visual vocabulary. (The emphasis on fairly rigid genre-wide artistic conventions also expands the labor pool by making no one animator really unique in being able to realize a scene, cutting cuts for labor considerably.)

Water and hair are only expensive if you try to make them realistic. Abandon that aspiration and let imagination fill in the gap instead, much as you do in a puppet show, and animation can become much more affordable.

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