Kristin here—
Back in my December 10, 2006, entry [1], I discussed some reasons why CGI animated features often seem better than their live-action competition.
In passing I mentioned that industry news sources were discussing whether there were too many CGI films made last year. “Studio executives and commentators continue to debate whether there are now too many CGI films coming out. Indeed, the November 24 issue of Screen International says, ‘Much has been made this year of the seeming over-saturation of studios/computer-generated titles, with critics and analysts pointing to growing movie-goer apathy.’”
I realize that industry pundits have to have something to write about at year’s end. Unlike the critics, they don’t have the ten-best lists and who-will-win-the-Oscar options, so they assess box-office trends. One year indies suddenly are in, the next year the big sequels have surged back, and the next year the indies are back. To read the trade papers, one would think that trends come in neat one-year cycles. Maybe studio executives plan their upcoming films according to these supposed trends, but films being greenlit now will only appear years in the future. By then the cycles will have turned over and over.
The “too many toons” issue looks to me like a tempest in a teapot. If you look at the various box-office lists for 2006, CGI animation did better proportionately than live-action films did.
Let’s start at the bottom. The December 25-31, 2006 issue of Variety ran Nicole LaPorte’s “2006: H’w’d diagnoses its duds.” (I’d link to the online version, but it seems inexplicably to have disappeared from Variety.com.) There she talked about the 10 biggest failures of the year. Despite the title, the diagnosis and choice of films was done not by studio employees but by an “inhouse Variety poll.” To be included, films had to be relatively big-budget items that could plausibly have been hits on the basis of the track records of their directors, stars, or source material. (e.g., Lady in the Water, Poseidon, A Good Year).
One animated feature made the list: Flushed Away. I have already expressed [2]my liking for this film and made some suggestions about why it undeservedly failed. Presumably it is a coincidence that DreamWorks’ head of marketing is leaving the company to set up on her own. She had presided over many hits for DreamWorks, and her new firm will continue to work with its releases. Still, the Variety story [3] announcing the move refers to the lackluster performance of Flags of Our Fathers but does not mention Flushed Away or earlier Aardman films.
OK, so one of ten flops as designated by Variety staff members was a CGI feature. Nine of them are live-action films.
Now let’s go to the top of the list. The ten highest domestic box-office grossers in 2006 included four CGI hits: Cars, #2, Ice Age: The Meltdown, #7, Happy Feet, #8, and Over the Hedge, #10. On the worldwide chart, these four films rank high as well: Ice Age: The Meltdown, #3, Cars, #5, Happy Feet, #10, and Over the Hedge, #11. In the domestic market, 6 other toons make the top 100. So, 4 out of 10 toons are in the top ten, while 6 out of 90 live-action films make that short-list. I’m no math whiz, but that looks like 40% versus 6.6% to me.
Of course, as I pointed out [4] back in the infancy of this blog, grosses aren’t the best measure of success. How much a film cost obviously determines how profitable it will be. Casino Royale, the #9 domestic box-office pull in 2006, took in $164 million—it is unanimously hailed as a hit, but it cost a reported $150 million to make. There’s also the factor of “prints and advertising”: how much it costs to order thousands of copies of a film and how much is put into the various forms of publicity. As I noted, P & A costs are seldom announced.
Recently, however, Kagan, a company with access to proprietary industry figures, put out its list of the 10 most profitable films of 2006. (Only films that “open wide” are included. That used to mean something like 500 or 600 theaters, but as more films come out on thousands of screens, the term has become pretty vague.) Kagan does factor in P & A expenditures alongside the filmmaking budget to determine a figure for a film’s total costs. It also has a formula to calculate the total income from all major forms of distribution: not just theatrical box-office, but DVD and the various other video and TV income for a film. The result is about as accurate a notion of profitability as we outside the industry are likely to get.
Going by Kagan’s reasonably reliable profitability figures, how do animated features stack up? We all know that CGI is expensive. A live-action feature that depends very heavily on computer trickery might spend as much as half its budget on special effects.
Surprisingly, CGI animation can be profitable. Kagan pronounced Ice Age: The Meltdown the most profitable film of 2006. With total production, marketing, and other direct costs of $256.4 million and an estimated $1.05 billion worldwide gross from all distribution channels, the proportion words out to 4.11 on the “Kagan Profitability Index.” (A film generally is assumed to be profitable if it achieves a KPI rating of 1.75 or more.)
Three other animated films made the top ten on the Kagan KPI list: Cars was the 8th most profitable film, Over the Hedge the 9th, and Happy Feet the 10th. These figures are all the more remarkable when one considers that a high proportion of tickets sold for animated films tend to be at the lower children’s admission prices.
The real question isn’t really whether there are too many animated features coming out. It’s actually how large the G and PG markets are. Live-action films come in all ratings, so they are not all competing with each other. R-rated horror films compete with other edgy teen-oriented movies but not with family-friendly holiday movies. Toons tend to compete with each other, but they also compete with G and PG live-action films. Flushed Away was not done in because it opened on the same weekend as another CGI toon. It presumably sank partly because it was released on the same day as The Santa Clause 3.
In 2006, live-action films for children didn’t do as well among domestic grossers as animated ones did. Night at the Museum was #5 with $205 million, but the next highest film of this type, The Santa Clause 3, took in $84 million to end up at #22.
Bottom line—and that’s what we are talking about here—there doesn’t seem to be a glut of animated films so far. Let’s see what Shrek 3 and the other CGI toons of 2007 lead the pundits to diagnose a year from now.