The Economics of Animation

[Leviathan]

This is a Cartoon Network storyboard artist talking about what's been going on at Cartoon Network/WB lately, but it has implications for all animation, especially where streaming is concerned.

As the artist explains it, streaming has completely messed up the economics of animation. There's no money for a parent corporation like Warner Bros. to put an new animated show on their own platforms, because they're no way to tell if a given animated show is contributing to new subscriptions or retention. WB at least is reliant on rival streamers like Hulu picking up animated shows because then the money earned can be measured. The staffers on one CN show in production don't even know where there show is going to end up because a deal hasn't been finalized yet.

This has a lot of implications for why a lot of non-legacy shows have bit the dust recently, and why so little is getting greenlit.

 

[Frontier]

That's a pretty sad state of affairs for animation.

 

[Red Arrow]

In a properly functioning free market this problem would solve itself and you would end up with a couple of "economically healthy" (lucrative) streaming platforms and other companies would simply close their platforms (like HBO Max) and simply produce only for other platforms.

HBO Max's offer is so meager, I have never even considered getting it.

 

[Scofisticated]

I do worry this is simplifying some things. She isnt an economist. (Warner was bankrupting before Zazlave came in. But it didnt bleed-out animation until he came in.) However, I cant deny the info from the inside. For a company, it does make sense that if you license a thing, you can see income for a product. And in what I can guess, in a somewhat direct way? Selling a license to (show) means someone is willing to give money for it. Possibly because they think people are willing to watch it.

As opposed to streaming your own stuff. Which, you have direct metrics as to how much it is watched. But even that isnt the -most- clear. Not as clear as some businesses may prefer. People are paying one fee for a gestalt of stuff. And watching because it's easily avail on the menu. But being ala cart, we can stop at ep 4, and not get back to ep 5 for weeks or months. Is that because we were meh to the show? Or did life get busy? [There is never enough metrics. So we have to make a surveillance capitalism to have more.]

But selling a license seems more traditional. Seems more for-sure. Individual product > payment. "We will pay you (money amount) for (show)." Now you have money in your pocket. And it's, maybe, clear how you got it, because someone decided it was watchable. Who cares, it's their gamble now.

[Always remember, the entertainment business is a -massive- guessing game.]

 

[Space Cadet]

In a properly functioning free market this problem would solve itself and you would end up with a couple of "economically healthy" (lucrative) streaming platforms and other companies would simply close their platforms (like HBO Max) and simply produce only for other platforms.

HBO Max's offer is so meager, I have never even considered getting it.

HBO Max is geared towards live-action stuff, so if you're not into that, then it's not for you.

 

[harry580]

That's a pretty sad state of affairs for animation.

I have examples of that: blue sky studios (folded instead of using it as a backup studio for Walt disney animation studios or pixar), nelvana, tangent animation

 

[Pooky]

I guess the question is why is this affecting animation disproportionately? Nothing they are saying wouldn't also apply (in theory) to live action; new live action shows and movies get overshadowed by legacy material too, but they are still being made for streaming, and often at great cost.

 

[Red Arrow]

I guess the question is why is this affecting animation disproportionately? Nothing they are saying wouldn't also apply (in theory) to live action; new live action shows and movies get overshadowed by legacy material too, but they are still being made for streaming, and often at great cost.

I might be wrong but I think animation is generally more expensive than live-action, so that makes executives even less incentivized to take risks.

VRT (Flemish state television) said that their preschool shows are amongst the most expensive programs to acquire or produce, but it's fine because those shows get thousands of reruns and preschoolers like repetition anyway. Granted, VRT's preschool animation is all very high quality (stop-motion etc.), so the numbers might look different for your average CN original.

 

[SpecialColorfull]

FINALLY a thread on this topic has been made! I really wanted to discuss this but my posts and threads never caught on. Animation desperately needs a new way to fun itself. Especially western animation which is total shambles, there is no way to make profit on an animated work anymore and that's fatal to this industry.

 

[Leviathan]

Lots of discourse onlike about Glitch's merchandise, where they have a line of merchandise ready for each new pilot as soon as it premieres, most recently with Gameoverse.

Matt Braly did a tweet about how animation used to be treated as a loss leader and the real money was in merchandise.

That just takes you back to all the problems the old media parts of the industry had, where the only cartoons worth making are the most toyetic.

 

[Pooky]

I might be wrong but I think animation is generally more expensive than live-action, so that makes executives even less incentivized to take risks.

That may have generally been the case for a long time (though I think a list of the most expensive shows would always have been dominated by live action) but not any more, certainly not in the streaming age. A lot of streaming shows are extremely expensive; Pluribus for example has a reported budget of $15million per episode. And then there are direct to streaming movies, like The Electric State that cost $320million.

Of course a lot of the budgets for these productions goes on CG special effects, or to put it another way, Animation. So it's not that they're not willing to pay for animation, just not for animated shows

 

[Leviathan]

That's Prestige TV, streamerts and premium channels like HBO trying to make cinematic shows that can be taken seriously. As far as the execs who greenlight shows are concerned, animation is just meant to be filler to placate easily-entertained children.

The popularity of anime is also a big factor in this. Investing money in making a home-grown show is much less attractive when you can import and localize a cartoon from Japan for, comparatively speaking, pennies on the dollar.

Which of course feeds into the problems affecting the anime industry with overworked animators and crunch and burnout, but that's a whole other can of worms.

 

[SpecialColorfull]

That may have generally been the case for a long time (though I think a list of the most expensive shows would always have been dominated by live action) but not any more, certainly not in the streaming age. A lot of streaming shows are extremely expensive; Pluribus for example has a reported budget of $15million per episode. And then there are direct to streaming movies, like The Electric State that cost $320million.

Of course a lot of the budgets for these productions goes on CG special effects, or to put it another way, Animation. So it's not that they're not willing to pay for animation, just not for animated shows

I have to say this. The problem isnt the expenses but rather that Live Action is more accepted and people actually subscribe to see these shows, but animation is just a side thing. Only Invincible is an actual "People get the streamer just to watch it" show and that shows animation is terrible and cuts massive corners. Animated shows get cancelled or are rarely greenlit to begin with because simply because they are rarely profitable, Live Action is expensive but its more attractive to casual viewers anyway. This is also why there is a certain Germans Love David Hasselhoff effect to success in animation like Anime or Bluey. The home country shoulders all risk and the companies that bring it out of the origin country reap the benefits. If there is NOTHING to offset the risks of it flopping or not being profitable Animation will come to an end sadly.

 

[Leviathan]

I have to say this. The problem isnt the expenses but rather that Live Action is more accepted and people actually subscribe to see these shows, but animation is just a side thing. Only Invincible is an actual "People get the streamer just to watch it" show and that shows animation is terrible and cuts massive corners. Animated shows get cancelled or are rarely greenlit to begin with because simply because they are rarely profitable, Live Action is expensive but its more attractive to casual viewers anyway. This is also why there is a certain Germans Love David Hasselhoff effect to success in animation like Anime or Bluey. The home country shoulders all risk and the companies that bring it out of the origin country reap the benefits. If there is NOTHING to offset the risks of it flopping or not being profitable Animation will come to an end sadly.

'
Paw Patrol's the same way (it's made in Canada); Nickelodeon licenses it and takes a cut of the merchandising revenue.

There's a lot of questions about making American animation viable that the American megacorps have abosolutely zero interest in answering. Keeping a few workhorses going (Spongebob, Teen Titans Go, Rick and Morty, The Simpsons, Family Guy, South Park) does the bare minimum to sate the demands of streaming and what's left of cable and that's all that's happening.

 

[Red Arrow]

Which of course feeds into the problems affecting the anime industry with overworked animators and crunch and burnout, but that's a whole other can of worms.

I don't think the anime industry is any worse (or any better) than any other industry in Japan regarding worker rights (except perhaps the government itself).