The state of the animation industry?

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Or: I think we are going to need a better boat.

You may have noticed some rather spectacular news in the last few days concerning closures of animation studios and layoffs of seasoned folks at others. While this is not a new phenomenon it sure smarts when it happens.
Over the last two years there have been a number of company collapses and quiet closures across Canada. I fear that we have not seen the last of it. Why you ask?

Over the past few years there has been a lot of discussion about the animation bubble. The boom and bust the industry seems to go through every 7 years or so. This last boom it could be argued lasted well over a decade. If you want to believe in simplistic answers to complex questions this one might be right for you. I don’t buy it. I think that the answer is much deeper than a simple sentence could encapsulate.

Here is an interesting article from 1985, from the Spokane Chronicle. Discussing the Black Cauldron.

My favourite part of the article is the last couple of lines.
“ The release of the Black Cauldron could also spell trouble for animators if it isn’t a huge success.”
and:
“It’s a very conservative business…> When you get a string of things that aren’t working well, people move into things that are.”
I think that could be said for any sort of business really. Animation is no exception to this theory.

Businesses fail all the time. I think that because we work in the entertainment world ( meaning not the real world ) we tend to be held to a different standard by the media and ourselves. When a company goes down in the TV/film/game world everybody hears about it.

In 2009 Canada saw over 5000 businesses go under.

For 2008, in the arts and entertainment sector alone we saw more than 3.4 per 1000 businesses go under.

That is a small % of the total.

These just become a statistic don’t they? We no longer connect with the people that have lost their jobs. Sad and true but I have digressed.

Boom or bust is not the issue. That is a normal cycle of economics in any of the major countries that we trade with. Things work for a while, things get more expensive, things change. No different for cartoons than it is for sausage making.

For me the bigger issue is that the model is broken. How we make TV shows and how we make a living making TV shows is changing and no one has the magic answer as to what it is changing into.
I find this scary and exciting at the same time.

The cost of production is rising all the time.
The desire for the end user to see and enjoy a quality product is rising.
The old model of “just send it overseas” doesn’t work anymore for both the reasons above.
The Advertisers, who pay the broadcasters to air the shows we make are running scared because they don’t understand where the viewers are going and how to reach them.
This in turn means broadcasters don’t have the money they used to for buying your show.

It becomes the snake eating it’s tail!
Downloads are the easy way to blame what is happening. I don’t buy it. I do think that illegal downloading is very bad for our business but trying to stop it is like putting your finger into the leaky dam.
I went to a conference not so long ago where an expert was talking about the loss of revenue due to illegal downloads. The numbers were frightening but like statistics, numbers can be made to do your bidding.
Heroes was the most pirated show in 2009. When it first aired the network was getting about 14 million viewers. As the series continued that number has dropped to about 6 million with another 6.5 million people downloading it. So the network says that they will cancel the show due to poor numbers.
THE MODEL IS BROKEN.
In my books they have over 12 million viewers. Sure half of them are getting it for free so what do I, as the broadcaster or producer need to do to get some money from them?

Do I try and stop millions of internet users from downloading? Or do I look at other statistics that are readily available. For instance did you know there are now over 400 million users on Facebook? How about there are over 1.8 BILLION internet users worldwide. In my mind if you are thinking in terms of millions of viewers you are missing the big picture.
The audience is no longer nailed to their chair to be entertained on our schedule. They want what they want when they want it.

Until someone comes up with a better way of getting the message to the end user then we are going to see a lot more upheaval in this industry.
Marshall McLuhan once said, “the medium is the message”. I think that still stands as a viable theory but the medium has changed. It is no longer that box that sits quietly in our living rooms waiting for us to sit in front of it.

I think we need a better boat.

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