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Are Hollywood studios cranking out too many animated films?

The market for animated movies may be nearing a saturation point as audiences confront a growing number of choices, some Hollywood veterans say.

August 20, 2013|By Richard Verrier
  • DreamWorks Animation, one of the leaders in the animation film industry, had an unexpected misfire this summer with “Turbo.” The film made $21 million in its opening weekend, less than half what the Glendale studio pulled in for the opening weekend of its prior movie, “The Croods.” Above, characters from "Turbo."
DreamWorks Animation, one of the leaders in the animation film industry,… (Associated Press / DreamWorks…)

When it comes to computer-animated movies, studios seemingly can't get enough of talking animals, planes, cars, monsters, cavemen, snails and little blue creatures who live in mushrooms.

But there are signs that the abundance of animated movies may be nearing a saturation point as family audiences confront a growing number of choices over what they choose to spend their movie dollars on.

"We're all sitting at a very delicate point," said Chris Meledandri, chief executive of Illumination Entertainment, which produced the hit "Despicable Me" films with Universal Pictures. "Everybody has been able to survive so far, but as more films are planned, it's inevitable that there will be more acute cannibalization of each other."

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This year will see the wide theatrical release of 11 animated movies — up from six a decade ago — including six studio movies in the summer alone, making it one of the most congested periods ever for computer animated movies. In total, 75 animated movies have been released since 2008, according to And an additional 13 movies are slated for release in 2014, not counting films released in fewer than 500 theaters.

"There's a huge number of animated films coming out," said Paul Dergarabedian, president of the box-office division of "There's no question studios are going to commit huge resources to animation, but I think there's a learning curve about how audiences react to films and how often they are released."

The flood of computer-animated movies is reminiscent of the late 1990s, when Disney blockbusters such as "The Lion King" spurred others to jump into the business — only to fail with a string of box-office clunkers, such as "The Iron Giant" and "Titan A.E.," that led to widespread layoffs.

Most of the recent movies, however, have fared well at the box office, some hugely so. Universal scored a massive hit with "Despicable Me 2." Since its release July 3, the Universal sequel, produced for $76 million, has raked in more than $750 million, making it the most profitable movie in the studio's history.

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Disney also produced a hit with Pixar Animation Studios' "Monsters University," which has pulled in more than $658 million in ticket sales since its release in June.

But there also have been some high-profile stumbles.

DreamWorks Animation, one of the industry leaders, had an unexpected misfire this summer with its computer-animated release "Turbo," released just two weeks after "Despicable Me 2."

The film made $21.3 million in its opening weekend, less than half what the Glendale studio pulled in for the opening weekend of its prior movie, "The Croods." Just five months earlier, DreamWorks took an $87-million write-down on its holiday movie "Rise of the Guardians," which contributed to the first-ever layoffs at DreamWorks this year.

Chief Executive Jeffrey Katzenberg has cited market overcrowding in explaining the weak opening for "Turbo."

"We just ran into a perfect storm of way too many movies," Katzenberg recently told analysts. "We've never experienced this level of animation congestion in a period of time."

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Katzenberg, however, said he expects "Turbo" will be profitable because of international ticket sales. Upcoming releases, he noted, won't face such problems next year and in 2015 because they will be spaced further apart from rival animated films.

DreamWorks, Disney and Pixar used to dominate the animation movie industry but now face growing competition from other studios. Sony, Paramount, Universal and Fox, which owns "Ice Age" creator Blue Sky Studios, each have animation divisions with several movies in the pipeline.

In addition, Warner Bros. announced this year it would return to the animation business, producing one animated feature a year starting in 2014, including an animated movie based on the "Lego" toys.

Disney's latest animated release, "Planes," had a soft landing at the box office during its opening weekend this month. But the movie, originally intended to go straight to DVD, cost only about $50 million to make and the studio already has approved a sequel.

Some of the newer studios have been squeezed by the animation crunch.

Sony had a weaker-than-expected opening for "The Smurfs 2," a hybrid of live action and animation that earned just $17.5 million in its opening weekend — well below what the first Smurfs movie grossed in its opening weekend. Still, the movie has made up ground overseas and the studio expects the film will generate a healthy profit. A sequel is planned for 2015.

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Since its launch more than a decade ago, Sony's animation unit has had a mixed track record, with misfires such as "Arthur Christmas," along with hits such as last year's 3-D movie "Hotel Transylvania." Next month the unit will release a sequel to the 2009 movie "Cloudy with a Chance of Meatballs."

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