Newcomers challenging giants Disney, Pixar
Hollywood’s animation sector looks to sort its royalty from its minions
Hollywood’s animation business is slowly playing out its own mythic dramas, if with less catchy music. Companies are beset by mergers or #MeToo scandals. Studios are wedded to big ambitions, or shackled to past successes. And internal questions are only the start. Leaders such as Disney and Pixar are trying to maintain dominance over the field, while close competitors such as Illumination are closing in. Once-great studios such as DreamWorks are struggling to find their way back. And well-funded upstarts from Sony to Netflix are seeking to knock them off. “We are witnessing fundamental change right before our eyes,” said Dan Sarto, editor at Animation World Network. “It’s totally unprecedented. Everything is subject to disruption.” At stake is not just which Hollywood conglomerate will reap financial bounties — major franchises such as Toy Story can take in $2 billion or more globally — but which will define the tone and style of animation moviegoers see for years to come. John Lasseter has been one of just a few people to define the modern animation zeitgeist: slick computer-generated kids tales with simultaneously serious themes for adults. He achieved the feat first at Pixar and, in recent years, at Disney, too. But despite what many thought would be a lifetime tenure, Lasseter has stepped down, accused of unwanted sexual advances and promoting an unsafe work culture. The news set the companies — and industry — on their ears. While this month’s Ralph Breaks the Internet and next year’s Frozen 2 and Toy Story 4 are decidedly Lasseter pieces, the longer term brings a large degree of uncertainty. Disney promoted two in-house filmmakers, Jennifer Lee and Pete Docter, to run the creative sides of Disney Animation and Pixar. Each has a deep track record in crafting stories that kids can understand but parents can appreciate — the heartbreaking opening montage in Up about an elderly man’s life with his beloved late wife, for example. But neither has any executive experience, provoking skepticism about whether the pair will run the business side or placate their corporate bosses as skilfully as Lasseter was known to do. Meanwhile, Illumination Entertainment, a company founded just 11 years ago and owned by Universal Pictures parent Comcast, has become a quiet force, claiming two of the top five all-time global animation hits in Minions and Despicable Me 3, the only titles on the list not from Disney-Pixar. “They’ve done a great job with quality and consistency,” said Doug Creutz, a senior research analyst at Cowen who covers animation. “If Pixar misses a step, Illumination will continue to take more share.” Illumination has had three movies gross close to or more than $1 billion worldwide. But Illumination has work to do on the Oscar front: Disney-Pixar has won the animation prize 10 of the last 11 years, including six in a row. Illumination has never been nominated. “Even if Illumination takes share from Pixar (with Lasseter gone), I still think there’s room for all three,” added Creutz of the ranking of companies by market share. “It’s below them where things get really interesting.” Right below them is DreamWorks, a one-time megalith searching fervently for its identity after a sale to Universal and the exit of the pioneering Jeffrey Katzenberg. At the helm now is Chris DeFaria, a former Warner Bros. executive who oversaw the penguin musical Happy Feet. In February, DreamWorks will release How to Train Your Dragon: The Hidden World, the third film in its Oscar-nominated crown-jewel series that has totalled $1.1 billion in global ticket sales. DreamWorks has high hopes — Steven Spielberg even gave notes to Dragon’s director Dean DeBlois, according to a person familiar with the production who was not authorized to talk about it publicly. Illumination and DreamWorks have thus far basically carved up the calendar — the former getting more plum dates of July 4 and the run-up to Christmas with the latter landing Easter and the early part of the holiday season. But top DreamWorks executives are privately unhappy with that arrangement and do not believe it’s viable in the long run, according to a senior person at the company who spoke on the condition of anonymity so as not to be seen as criticizing a corporate sibling. Since DreamWorks is not at the top, the race is on to dethrone it from the fourth spot. Sony has made the biggest play, tripling its crew size and doubling its slate in 2017 under Kristine Belson — herself a former DreamWorks executive. (Sony’s movies, like those of Illumination and several other studios, tend to be made less expensive, often for under $100 million. Animation is a time-consuming, labour-intensive process, taking hundreds of animators working for years, and the battle is often about keeping costs down. Disney-Pixar generally spends the most, frequently taking longer for development and employing vast teams; by some estimates, the Incredibles 2 budget reached $200 million. Sony isn’t the only company that sees a vulnerability — or DreamWorks talent as the key to knocking off DreamWorks. Paramount has hired Katzenberg’s longtime production deputy Mireille Soria to help revive its own animation efforts. So far she has focused on branded titles, activating a long-troubled SpongeBob SquarePants sequel and acquiring a Sonic The Hedgehog movie from Sony. Meanwhile, Warner Bros., which struck gold with an offbeat hit in The Lego Movie four years ago, will continue to mine that ground — and aim to get to DreamWorks’ slot — with a sequel next year. Creative range is the gambit here: Development projects involving Dr. Seuss properties, a George R.R. Martin novel, a Wile E. Coyote title and a story about Toto from The Wizard of Oz. And all of this is to say nothing of Silicon Valley. Netflix surprised many at the Cannes Film Festival in May when it paid $30 million for Next Gen, an independently produced animated feature partly financed out of China with a glitzy American cast. Several weeks ago, the company announced it was making a new stop-motion adaptation of Pinocchio by The Shape of Water director Guillermo del Toro, suggesting a desire for quality and a willingness to spend for it. “Netflix is banging at the gates, and we at the studios ignore them at our peril,” said a high-ranking executive at one of the top four studios. The mad dash for supremacy — and the differing approaches to get there — mean the vibe of the next generation of animated films is harder than ever to predict. The multiplex could see a re-election of the Disney-Pixar reign of the past two decades, a power-sharing arrangement between them and Illumination, or any one of several upstart challengers. “There is this kind of crazy fluid situation now where you’re not sure who’s going to cannibalized by whom,” said John Eraklis, a veteran animation producer. “And that means you’re really not sure what the long-term visions for any of these places, or even animation in general, is going to be.” The sector has seen an undeniable burst in players and films lately — last year saw 15 wide-release animated films, up 50 per cent from just five years earlier. And the new entrants will flood the market further. That could be cause for optimism, making some consumers feel that an increase in choice awaits. But it makes a few creators worry about a reduction in these movies’ lustre. “On the positive side, Hollywood now believes in animation in a way it never did before,” said Brad Bird, the director of the Incredibles movies at Pixar. “When I was starting, executives would give me this self-assured look that no animated film would ever make $50 million. But technology has also made it much easier to make movies, and I hope people don’t rely on that ... I hope people make films because they have a bold new story.”