Why Animated Films Are So Hard. Investing 101

I received an email from an investor asking about my opinion on a particular matter. After beginning my private reply, I figured I would just make an entry about it here. ...continued...

Animated films are extremely complicated. Because of the success of the Pixar and DreamWorks films, people are coming out of the woodwork proclaiming they can make the next blockbuster. If you look closely, you'll realize that most of these people really have no (or very little) experience in animated films (or even animation!). They ease their investors minds by saying they hired a few Pixar guys. That is great and everything, but the fact of the matter is, most failures are going to be because of management and producers and directors, not the artists themselves.

To this individual that asked about a particular company... If you are looking to invest in the community in which you live, then this company is probably a good choice. However, if you are simply interested in investing in animated films, you probably have better options available. There are many startups that are about to get off the ground that have a much more experienced pool of executives, producers, directors, and artists. Potentially being a negative in your situation is that these startups are based in the Los Angeles area. I guess only you know the answer to whether location means that much to your investment.

I get a kick out of the groups that come along and proclaim they are going to be the next Pixar. Even more amusing is that a lot of these groups really don't have any idea what they are doing. They may know business, but animation cannot be considered a normal business. An investor needs to examine and do their due diligence on the management, on the producers, on the directors. Look at their track record (if they have one) in animation. Did they produce a profitable product? Did they stay within budget?

Something else to think about. When a studio comes along and says they will complete a movie for $25 million, you really need to ask yourself (and them) how they are going to do it for that price. Where are the shortcuts going to be? How is that going to affect the quality or the story? If I opened an animation studio in San Francisco and claimed to be able to keep the budget within $25million. Your first question should be- where are you going to find the talent to fill seats? I'm going to have a hard time getting Pixar and ILM employees for that budget. So then I should start worrying about where these people are going to come from? Straight out of school? Inexperienced people looking to work on their first feature project? San Francisco has a ton of talent base. Unfortunately they already have jobs!! It is not the same environment as Los Angeles (people constantly shifting from studio to studio, tons of smaller animation studios to pick talent from). Salary is the number one expense in animated film production. Add up the number of people and multiply by the salary you will have to pay them to leave their cushy jobs at Pixar and then multiply by how many years an animated film is in production. Oh crap, I just blew my $25 million budget and I still haven't bought computers or paid voice talent or gotten sound design or, or, or.

There is a reason why animated films cost so much. Anyone coming along claiming they can do it for a quarter of the usual price is going to deliver a lesser product. There is no denying this. As an investor, you've got to understand that this won't be a Pixar quality production. If your cool with that, and you think the money will be spent in the right areas (story story story, marketing marketing marketing) and have the management, producers, and creatives to pull it off. Maybe it isn't such a bad investment.

If I had the money, I certainly wouldn't do it. I would be looking for a solid core group that has already done it elsewhere and has a budget of at least $45 million.

Shopping Scripts

It seems that someone is shopping a CG film around Hollywood. Okay, so maybe that is not very unusual. However the person shopping it has only been in the animation industry a few short years. Still not unusual? Keep reading... ...continued...

What if I told you that this "youngin" is set to direct the film (with no real directorial experience outside of a short film that he did)? Still don't think it is unusual? Now here is the kicker, Tim Burton signed on as Executive Producer.

Huh?

Yes, all true. Now, in the Hollywood world, many well-connected people will sign on as Executive Producer on a potential film. They do this all the time and a lot of these project don't get off the ground. And maybe this one won't either. However, it surely is an odd story for American audiences (I could see it as live action film before I could see it as animation).

So will this thing get made? Beats me. I do know that a representative for this youngin is calling around seeing what animation studio is available. Rumor has it, they do not have the money yet, just putting their ear to the ground trying to round up funds and distribution. My first question is: How many studios would be able to take this on that are large enough and not already up to their armpits in work? None pop to my mind.

And lastly, directing an animated feature is HARD work. Certainly a bigger task than a short film. And even harder for a youngin. This is why most studios (Pixar, DreamWorks, Disney) have more than one director. There are simply not enough hours in the day to do everything he has to do. Further, when you put someone in that role that hasn't done it before... well... Let's just say this could be interesting. Smart money is on that whoever funds this project will require that another experienced director comes in to hold the youngins hand. Especially if a completion bond is involved.

If this project gets funding, distribution and actually goes into production, it will prove one thing to all of you film maker wannabes... All you need is one big name to sign on Exec Producer to get your film made.

Jim Hill Says Audiences Falling Out of Love w/ CG Films

An article written by Jim Hill makes some strange suggestions. Perhaps I am just exhausted, but it sounds like he says that traditional animatin may be coming back to Disney. Here are his points followed by my comments... ...continued...

JH: Shark Tale made less money than Shrek 2.
ME: Uh.. So what? Shrek had a huge built in audience. What did you expect? Further, what makes you think all animated movies can live up to Shrek numbers?

JH: The Incredibles made less than Finding Nemo.
ME: Again, do you think that each film is going to make more than the previous films? Finding Nemo and the Shreks were extraordinary. Not the ordinary.

JH: How do you explain Robots making less than Ice Age?
ME: Lordy. Reaching again.


He goes on to suggest that American audiences are getting tired of computer animation. And these are his reasons??!!! According to Jim, if Madagascar doesn't do Shark Tale numbers or Chicken Little doesn't do "Pixar" numbers, it will spell disaster for CG animation. yawn...

One thing I can agree on, audiences are going to stop looking at CG as the cool new way to look at movies. There will be a decline in box office numbers. But that doesnt spell the end of CG films. Give me a break.


Jim Hill will be Jim Hill. However, this is a lot of grasping.

Horton and Valiant

20th Century Fox acquires rights to "Horton Hears a Who". I guess this will be one of the next projects for Blue Sky after Ice Age 2 is done. I'm not really a big fan of Dr. Seuss, so I cannot really gauge the possibilities of this picture. Hopefully the story will be tighter than Robots. Let's be honest, it wasn't that great. Good, but not great.

There is a poster for Valiant viewable at this URL . Notice the huge letters "From the Producer of Shrek & Shrek 2". If that isn't false advertising, I don't know what is! Also interesting to note that there is no mention of Vanguard in any text larger than a grain of rice. Of course Walt Disney is featured prominently. Judging by the reviews, I'm not so sure Disney should want to be aligned with this movie.

...end...

Pixar and Disney

Another few weeks have gone by without a post. I've tried to find some time to blog, however I couldn't manage to slip it in. I'll probably be late to the office this morning, but I'm in one of those moods were I don't really care... Let's talk about the Pixar / Disney situation... continued...

There is still all sorts of guessing going around about the Pixar / Disney relationship. How Iger will mend the fence and make everything fine. Personally, I don't think it will happen. Disney is getting itself in a position where they can branch off and away from Pixar with their own CG films that have good stories. I'm not convinced that Chicken Little is that movie. However, their projects a little further down the line have some hope. With that said, I do think that Steve Jobs is willing to bend over further than anyone thinks and possible a deal can be struck with an Iger run Disney. Rumor is that Jobs is asking way too much from potential distributors and he is not getting as warm of a reception as everyone predicted long ago. To me the time that has gone by speaks volumes. If distributors were truly lining up to work with Pixar (willing to meet their demands), a deal would of probably already been struck. I think Jobs will have to pull back on the reigns a little bit.

There is also a lot of rumor going around that the Toy Story 3 project was setup to simply be a bargaining chip for the Disney/Pixar relationship. I don't really see it that way. I think the TS3 project could be folded under the right circumstances., but I just don't believe it was created with that in mind. I know Disney can be really stupid sometimes, but creating a studio, building it out, hiring directors that cost millions, writers, management, execs, artists, doesn't sound like a bargaining chip. I know Disney has wasted millions of dollars before on stupid ideas and on failures, but Disney sees the dollars that TS sequels will bring. I don't think this was a ploy.