#5 – Economics of animation

Movies are intended to make money. This is no less true of animated films than it is of live action ones. Few people realize just how much money animated films generate though. Disney’s Frozen recently broke $1 billion worldwide gross box office. That’s billion with a B. This has put it as the eighteenth highest grossing film of all time a scant 5 months after release with profits still rolling in from the worldwide release. It is also the third (second if Avatar is excluded) highest grossing animated film of all time at only $63 million behind Toy Story 3. This may not be that much of a surprise, the film is very good after all. What is surprising is just how much $1 billion really is on a world wide scale.

According to the World Bank, Frozen has made more in its 5 month run than the average GDP of Somalia in the years from 1990-2012. In other words, Disney made a 108 minute film that is worth more than some entire nations. And this is not even counting the amount of money that Disney and its partners earn from licensing and selling toys or collectables, it is just how much it made at the box office.

In the case of Frozen though, it is not just a matter of how much this one film made. In the creation of the film animators had to come up with an entire new computer model to show accurate snow physics. Snow is an incredibly complicated substance, and designing a computer model that can simulate the physics of it is a massive accomplishment. If this technology is made available to the video game market, which itself is worth well over $10 billion it will undoubtedly generate an increase in revenue. Even a 5% increase of $10 billion is still $500 million. Frozen may end up generating much more in terms of its contribution to animation as an industry than just what it earns at the box office.

(See the technology here, embedding is disabled)

These numbers warrant some attention be payed to Disney itself. A company that started out with Steamboat Willie and subsequent small animations has since become an international giant. According to Forbes Disney’s assets are worth a total of $80.64 billion. Again to put that in perspective, according to the World Bank Syria has a GDP of just $73 billion. Disney controls vast amounts of the entertainment industry, now including the sci-fi giant Star Wars and through a deal with ABC the ESPN networks.

This one company, built on the back of a mouse at the wheelhouse of a steamboat has become more influential in the world of finance than many nations. The next time someone writes an animated film off as “just for kids” or “not real cinema” they should be reminded of just how much influence animation has exerted on the world, financially as well as culturally.

4 comments

  1. This is definitely a valid argument. I think a comparison can be made to video games. Video games were originally dismissed as “kiddy.” Now the medium has really emerged and has labels like “artistic” and “expressive” thrown at it. Animation still struggles with labels however. Perhaps it struggles more than video games. I believe that “adult” animation has more mainstream acceptance currently. Certainly more than in the past generation. All those kids are growing up to be adult consumers.

  2. I personally think this is one of the smartest unique blog posts I’ve ever read. Your argument is highly valid and I completely agree with the economic prospective you portray. And I do agree that animations should be done financially and culturally.

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