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By Richard Bruce BA, MA, and PhC in Economics

How to Make a Profitable CGI Animated Movie

By Richard Bruce BA, MA, and PhC in Economics

Toy Story, the first major motion picture, made with computer generated images, CGI, came out twenty years ago. It was hugely profitable and the whole genre, which now includes more than a hundred movies, has been very profitable. It is well known that Pixar has made 14 movies and all made money. But Blue Sky has made nine and Illumination Entertainment has made five and all of their movies were profitable too. This is a very profitable industry and many producers have been consistently profitable.

Before laying out an almost sure fire set of rules for making profitable CGI movies, I should explain how I know which movies are profitable, or at least how I guess. I do not have inside information, but it is well known rule of thumb that if the world wide box office is twice the production budget the film will on average break even. This is simply a rule of thumb because there are many streams of revenue and many different expenses. Furthermore, domestic box office is better than foreign because foreign theaters keep a larger portion of the box office they take in.

Recently I have read an article from the Hollywood Reporter that calls this rule of thumb into question. The article claimed that some CGI cartoon movies are losing money even though the box office is more than twice the production budget. Part of the problem may have been the huge marketing budgets. Marketing budgets that maybe larger than the production budgets. In other words they spent a huge amount of money to advertise the movies. While this may mean the industry is not a profitable as I think, the suggestions given here still hold. It is just that they maybe good suggestions for making reasonable profits, instead of amazing profits. Here is a link to the article on DreamWorks Animation

Most of the box office and production budget information comes from Box Office Mojo. Here is their list of CGI animated movies, and movies with CGI animated stars.

As much as most CGI animated movies have succeeded there have been some failures. But these failures tend to follow patterns, and from these patterns we can discern a system of rules, which when followed will almost always produce a profitable film.

Not that I want to discourage film producers from taking a risk, and trying something different. But these rules will help the creative person and the executives who evaluate creative projects know when they are taking a risk, and when they are following the standard path.

Spend Money

One rule is spend enough money, fifty million or more. If a movie is going to have a big box office people have to leave the comfort of their home and spend in the United States upwards of ten dollars a ticket. Movies are expensive and inconvenient compared to other popular entertainment. They should be significantly better than what the person can get at home. So you want to differentiate yourself from cartoons produced for television and all the movies that came out several years ago.

Outside the CGI cartoons I am discussing here there are exceptions, like romantic comedy, and hard core horror, but these are adult oriented. CGI moves are usually family fare. For family fare the rule that you must spend enough is likely to apply with very few exceptions. The only potential exceptions I have thought of would be religious movies and perhaps other movies that appeal to special audiences.

Comedy? Yes! Pure Adventure? No!

Another rule is go for comedy, not pure action adventure. Final Fantasy the Spirits Within is perhaps the biggest example, 137 million dollar budget and only 85 million dollar box office. It would have needed more than three times that to break even. Beowulf was a less dramatic example, 150 million dollar budget, 196 world wide box office. Three hundred million would have been break even.

Adventure that has some humor and is more cartoony, less realistic, does better. Check out The Adventures of Tintin, and Epic, but profits for both these movies were more marginal than the more comedic CGI movies.

The rule about avoiding adventure applies to the full CGI movie, not the movies that have CGI stars combined with regular non CGI movie making. Some of the movies with CGI stars like Avatar and the Transformers series have been insanely profitable. The point is that CGI does not produce truly realistic people, and almost realistic people are creepy. The audience does not connect with them. If you watch a few minutes of Final Fantasy the Spirits Within, Beowulf, The Polar Express, and several other similar movies and you can quickly see the problem.

Avoid Motion Capture

Another rule is avoid motion capture. Of seven motion capture computer animated films only one, The Adventures of Tintin has made money. Motion capture is where actors act out the show, their images are captured and then turned into a cartoon.

Avoid realism

Related to the rules about motion capture and adventure is the rule to avoid excessive realism. The Tintin movie is probably the least realistic of the motion capture movies and the only one that made a profit. Furthermore, the six unsuccessful motion capture movies are six of the most realistic movies made exclusively with computer generated graphics. By way of contrast many highly cartoony, unrealistic, CGI movies have been highly successful. The two Happy Feet movies and the Legend of the Guardians: The Owls of Ga'Hoole are also among the most visually realistic. Only the original Happy Feet movie was a success, and a key element of its success may have been the very popular music that were used. Guardians of the Galaxy used much the same strategy for their super hero-space fantasy.

Avoid Holiday Films

Another rule is avoid holiday movies. We have had one Thanksgiving, and three Christmas CGI movies. The Thanksgiving movie, Free Birds, broke even, the Christmas movies all failed, some spectacularly. There was a profitable Easter movie, Hop, but it is was the least profitable of all of Illumination Entertainment's movies. Rise of the Guardians had Christmas and Easter themes, but mixed them with other non-holiday themes. It was a marginal success, which is disappointing by CGI standards. None of these movies give me any reason to doubt my advice, avoid holiday movies.

Why are holiday movies a bad idea? CGI animated movies are sold on a world market. It is not uncommon for two thirds to three quarters of the revenue to come from outside the United States and Canada. Many places do not have the same holidays that we have or do not celebrate them in the same way, so this may explain part of these failures. Also CGI animated films tend to sell their tickets over more weeks than regular movies. People may only be interested in a holiday themed movie around the holiday.

Make the Film Mom Friendly

Another important rule is make the film mom friendly. Avoid things that are disgusting, like Flushed Away, the cartoon set in the sewer, perhaps the most spectacular failure by a major CGI studio.

Also make sure it has a message parents want to give to their children. Attack on Terra, a story about a good alien planet being attacked by bad humans also failed spectacularly. It failed the same year Avatar became the most successful movie of all time. The two movies had exactly the same theme. While bad humans, good aliens was accepted and loved as a theme for adults it was overwhelmingly rejected as a theme for children.

I think Moana is another example of this. Moana is making money, but given its great reviews and that it is a Disney princess movie, it is disappointing. I suspect that many parents don't think it is a good idea for a sixteen year old girl to ride off on a boat with a huge, muscular, guy. I would note that the film is doing better in the United States than it is World Wide. I suspect that the conservative Third World parents have problems with the plot.

Avoid Dark Horror

Related to the point about making things mom friendly, horror does badly unless it is not scary, has lots of bright colors, and a strong emphasis on humor. Monsters Inc., Monsters University, and Hotel Transylvania succeeded. Monster House narrowly missed breaking even. Many of the recent cartoon horror failures are classified as stop motion animation by Box Office Mojo, but have a lot of computer generated imagies, CGI, in them. A number of these recent horror stop motion films, Coraline, ParaNorman, Tim Burton's Corpse Bride, Boxtrolls, and Frankenweenie, have either lost money or only made a little. Their record is far below what we normally see in CGI movies.

Mammals Yes, Other Animals No

Cartoon mammals usually succeed, lower animals generally fail. We have had three ant movies, one succeeded, A Bugs Life. But even it was still one of the least successful of all Pixar films. The other two Antz and Ant Bully failed. Ant Bully failed spectacularly. The Bee Movie also failed. So, stay away from social insects. Do not green light a termite movie. Turbo, the movie about snails succeeded marginally. Conclusion, invertebrates are a particularly bad bet.

There have been a couple of successful fish movies, Finding Nemo, and Shark Tale, but two is a small data set, we will have to leave that a question mark.

Rango, largely starring reptiles failed, but one movie is an even smaller data set.

There have been successes with birds, Happy Feet, the two Rio movies, and more recently The Penguins of Madagascar. But there have been quite a few failures: Valiant, Happy Feet 2, Surfs Up, and Legend of the Guardians: The Owls of Ga'Hoole. Free Birds the Thanksgiving movie broke even. About half succeeded, but that is a terrible record for CGI movies.

I only found one CGI movie about non human mammals with a budget over 50 million that failed, that was The Tale of Despereaux. The lead character is a mouse. So a big hint is go with mammals.

Why is this? CGI movies tell stories, stories are usually about humans even if they are in the form of other animals, or anthropomorphic animals. It is easier to do this with mammals which are our relatively close relatives. It is more difficult with other vertebrates, and still more difficult with invertebrates.

If we look at humorous movies with CGI stars we find that first they are with few exceptions successful and most are about human like creatures, Smurfs, or talking mammals. There are no birds, reptiles, amphibians, fish, or invertebrates. This confirms the pure CGI experience, go with mammals and humans, or humanoids.

One secret to success with CGI stars is go cute, for example, Smurfs, and Alvin and the Chipmunks. Another secret might be make more of this type of film, they tend to coin money.

Don't Do Pointless Movies

One of the biggest failures in this category was The Adventures of Rocky and Bullwinkle. It is interesting that in 2014 DreamWorks produced a marginal failure Mr. Peabody & Sherman. Originally both of these were part of the same show in the late 50s and early 60s. The original show was based on clever puns, word play, and for the adults who happened to be watching this children's television there was political humor. This type of thing does not need a CGI treatment. There is no need to do Dilbert, The Far Side, or many other sophisticated comic strips as CGI movies. This essay would not make a good subject for a CGI movie. Use the proper medium for your message, and good ideas often do not need to be presented in expensive media.

Robots, Toys, and Anthropomorphic Vehicles Do Well

While lower animals do not do nearly as well as humans, and mammals, robots, toys, and vehicles given human personalities seem to do well. We have had three successful Toy Story movies, and more recently The Lego Movie all built on toys. Toys come to life are among the most consistently successful themes. Robots starred in Wall-e, and of course Robots, both were successful.

It is easy to see why the audience will readily go along with human emotions in toys and robots, and therefore why they make good subjects for CGI movies. It is a bit more of a stretch to see why anthropomorphic vehicles work so well. Yet, anthropomorphic vehicles starred in the two Cars movies and the two Planes movies, and all were successful. Perhaps it is our tendency to anthropomorphise our own vehicles. People often name their cars, planes, and boats.

Perhaps shows like Thomas the Tank Engine, and ads like the Chevron Cars ads sold the idea of anthropomorphised vehicles. Movies often have to rely on presold ideas.

Not all inanimate objects easy to humanize. Everyone's Hero only brought in 16 million. I do not know what the production budget was but it seems very likely this was a big loss. The movie prominently features a computer animated anthropomorphic bat and ball. It seems that did not work.

So it seems to be easy to humanize mammals, robots, toys, and vehicles, but more difficult to humanize lower animals and objects that do not have a human shape and do not normally move on their own.

Superheros Produce Super Box Office

Super heroes and villains have been good. The Incredibles, Big Hero 6, Despicable Me, and Megamind were all successful. I have been a little surprised at how slow the companies have been to exploit this. The Shrek series suggests heroic fantasy is also a good bet. but note all of these are humorous, not pure action.

Break the Rules

All together we have quite a collection of rules. Once again breaking the rules might be justified for various reasons. For example, if you could make adventure work then you might have a whole new industry that would not compete with the CGI cartoons that are coming out now. This might allow the movie industry to produce many more profitable movies without cutting into what the humorous CGI cartoon movies are making now. Perhaps the technology was not good enough when Final Fantasy the Spirits Within (2001), and Beowulf(2007)were produced. Perhaps it is good enough now. I doubt it, and generally you could produce a minute of film and make a pretty good guess, but perhaps they should experiment with full film periodically.

It has been noted that Box Office, particularly for the domestic (Canadian and American) market, is declining. I have also noted that Hollywood is more and more using my formulas, both the ones concerning CGI which I am explaining here and others I have never put into writing. The formulas work for the people producing the movies, they make money. But if new ideas are not tried then this may result in a slow decline of the industry.

Finally let me note that quality on average makes money and cynicism, contrary to H. L. Menken, often results in a lot of red ink. So if one has a great idea then a risk may be warranted.

The essay above is distillation of what I have learned about CGI movies from many years of my hobby of observing the success and failure of movies in general. Another type of movie that I have studied carefully is the live action superhero movie. Because this page on CGI animated movies has been so popular I have written another web page on the rules for making a successful live action superhero movie.

Last edited August 26, 2015

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