Angry Birds (the movie), Finding Dory, a new Ice Age, and even a movie about those 90s toy Trolls – the upcoming calendar is full of animated movies. Kyle Stock delved into the economics of the business:

• We’re reaching saturation point for animated movies, in part because they earn a 36% return.
• This is far ahead of the 26% that second placed Science Fiction/Fantasy movies earn, and well ahead of dramas and comedies that struggle to break even.
• But, while a lucrative opportunity, it is also an expensive one. The top movies need to shell out for A-List voice talent and skilled animators, all of which can cost $100 million.
• Through in another $150 million for promotions.
• If directors want to cut costs they avoid hair and water – two expensive things to animate. It’s no coincidence that the Minions movie starred largely bald characters.
• But you don’t want to cut too many corners. Fortune favours the bold. The more spent, the greater the likelihood of success. One expert believes that it’s riskier to make a $90 million movie than a $150 million one.
• The cost means that failures really hurt. Mr. Peabody and Sherman, and Rise of the Guardians, are two recent flops that cost DreamWorks a substantial amount of money.
• But no studio can resist the allure of making the next Frozen. Ticket sales for that movie alone were $1.3 billion. Which is peanuts compared to the $6 billion it made in ancillary revenue from things like its soundtrack.

Read more here.

Source: The Star

Via: Marginal Revolution