The Business of Computer Animation 2006 – a Quick Overview
The business of computer animation is exploding in all parts of the world. During the first calendar quarter, four animated films have been released in the US, three of which were computer animated. By current estimates 20 – 24 animated features will be released in the US in 2006, and subsequently around the world. There appears to be a greater number on the horizon for 2007 and beyond.
The beginning of the current era of CG animated feature films is generally considered to be the 1995 release of Toy Story. While previously there were 2D animated films or feature and short films with a large number computer graphics shots, Toy Story was the movie whose impressive box office brought in a very important demographic to the theater, the non-parent adult. The reason for that is simple: the movie was smart and funny. It can be seen that notwithstanding an apparently insatiable appetite for family fare, this important demographic has helped to expand the marketplace and the resulting box office.
So, how did we get to this point where it seems that critical mass is taking over? Success begets success or at least it begets others trying to duplicate success. Pixar’s success in the marketplace has prompted others to attempt similar feats. DreamWorks has been very active in the marketplace and for the most part has been successful at least in terms of box office across its many releases.
Box office is always important, but especially so as the CG features from the large studios, such as Pixar, DreamWorks and Blue Sky develop projects that reportedly cost well in excess of US$100 million.
Why are there so many CG projects in production around the globe today? The simple answer is because they can. That may seem like a trite statement, but it is true. While “anyone” can buy the necessary equipment, it is the artistic talent coupled with the story that can make a difference between success and failure, especially when some 60% - 75% of feature films lose money for their investors. It appears that animation fares somewhat better. Therefore the search has been escalated to find the companies in the countries with the most favorable labor rates, enabling producers to manage their costs.
In the era of 2D animation, the US studios sought offshore companies to perform the labor intensive in-between work and the ink and paint. This helped to develop some of the artistic talent. Korea and The Philippines reigned supreme for this work. So, too, today, production has moved to a number of offshore territories not just for some of the more labor intensive work on feature length projects, but for some of the CG in visual effects heavy projects, an important stepping stone to doing complete features.
Training programs have also added to the ability of multiple territories to be involved in large scale CG animation. For example, KOCCA has established a full-service, state-of-the-art 2D/3D animation studio designed to directly support and foster the continuing expansion of Korean animation production for the global marketplace.
All of these factors, and many more not mentioned here, have contributed to the growth, but they have all taken time to reach the current level of activity.
Where are we going from here? Over the next few years, there will continue to be more and more movie projects, whether they are feature length CG product, heavy VFX films or even other movies with “invisible” effects work. Differentiating one from another, we will continue to see animated product across a wider range of genres, not just family fare, and we will see a proliferation of 3D stereo product enabled in large part due to the roll out of digital cinema screens.
The latter is quite significant as the major movie studios work increasingly hard to provide the kinds of movie releases that will attract audiences back into theaters amid a decreasing box office. I currently estimate that some 6 – 8 features will be in 3D stereo in 2006. This includes a few that will be released in IMAX 3D, but that only represents a small portion of the global theater market.
At some point in the next few years, the volume of CG features will plateau. It will all be dependent on how good stories with compelling characters are brought to life. There will also be continuing direct to DVD product. But for now, it is full steam ahead as the market grows and evolves.
Of course, a lot of the tools and techniques that have been developed have also been used in the ever growing global TV animation and video game business, but those are subjects for another day.
Marty Shindler is CEO of The Shindler Perspective, Inc., a management consulting firm dedicated to providing a business perspective to creative, technology and emerging companies. Visit iShindler.com for additional information on the firm’s services as well as to read prior related articles and interviews on The Business Of Computer Animation and Global Trends in Digital Content Production and Distribution
