Focusing on Features: Indies eye expansion into theatrical toon market

Imagine spending a career plunking out rock songs on a six-string electric guitar only to wind up with a violin in hand as your symphony orchestra gets ready to take the stage. That's one way Fred Seibert of Frederator Studios attempts to describe what it's like for a producer of kids TV animation trying to jump into the world of feature films.
January 20, 2010

Imagine spending a career plunking out rock songs on a six-string electric guitar only to wind up with a violin in hand as your symphony orchestra gets ready to take the stage. That’s one way Fred Seibert of Frederator Studios attempts to describe what it’s like for a producer of kids TV animation trying to jump into the world of feature films.

And he’s got more where that came from. ‘I’ve spent the last 30 years learning Martian, but in features, they speak Venutian,’ quips Seibert. Known for toons such as My Life as a Teenage Robot, The Fairly Odd Parents and, most recently, Fanboy & Chum Chum, which launched in October on Nickelodeon, Seibert set up Frederators Films in 2007 to focus solely on feature film production. And the company is finally readying its first movie project for a 2011 release – a big-screen treatment of Cartoon Network original Samurai Jack (2001-2004), co-produced by J.J. Abrams’ Bad Robot Productions and distributed by Paramount Pictures. Frederator also recently signed a multi-year first-look deal with Sony Pictures Animation to develop and produce theatrical releases.

But Seibert is just one of many kids TV producers currently willing to immerse themselves in the language of movie production in the hopes of parlaying their TV experience into feature film success. In fact, there were arguably almost as many movie one-sheets as there were series synopses floating around the Palais at MIPCOM in October, as animation producers sought to expand their horizons in the face of a tough TV market.

Take CGI feature Planet 51, for example, which opened on 3,500 North American screens in late November. Spain’s Ilion Animation conceived the project and found financing and support for its US$70-million budget through a co-production deal with newly formed UK-based entertainment company, HandMade Kids. Though Planet 51 opened the same weekend as juggernaut The Twilight Saga: New Moon and brought in just over US$12 million at the box office, distributor Sony held out and gave the film time to build. The patient approach paid off – international sales were sitting at US$71 million at press time, with more than US$35 million coming from the US market.

HandMade Kids international director Michael Ryan says he expects North American box office numbers to exceed US$50 million by the New Year.

‘This is unheard of for an independently produced and financed animated feature,’ says Ryan. Next on HandMade’s slate is an animated Eloise in Africa movie.

‘Our entry into the family entertainment business was a conscious decision based on our ownership of the Eloise franchise and the knowledge of a very lucrative part of the market,’ says Ryan, whose parentco HandMade Films has a 32-year legacy of film production under its belt. ‘If you get this right, there is a very long and profitable tail,’ he adds.

Asked why he chose to pursue kids features, Frederator’s Seibert says he’s following his creative talent who are itching to evolve, write and produce family movies after years of making TV toons. Moreover, he says, TV sales volumes have slowed down worldwide, ‘so as a producer, you look to where the money is flowing, and features is a place where the money is flowing.’

Seibert’s feature film strategy, however, is based on a cost model, that he says is considered ‘low’ in the world of US$100-million studio budgets.

‘Our experience has taught us that budget and popularity are not necessarily linked,’ says Seibert.

Frederator Films has three models for producing animated features. The first focuses on low budget films, coming in under US$20 million that can compete alongside popular entertainment with mass appeal. (An example is its first commercial feature, Samurai Jack.) The second category includes big-budget CGI films with major studio partners that cost between US$20 million and US$150 million. And finally, he’s also looking at hyper-low-cost indie films that hover around US$3 million and will suit smaller distributors and older niche audiences. He admits that marketing for hyper-low films works best with concepts that have interested viewers who find out about their entertainment outside mainstream publicity channels. (More on marketing and distributing indie family films later.)

From the small to silver screen

Naturally, spinning an established series into a feature-length film is one way TV prodcos are honing in on the movie market. UK-based HIT Entertainment, for one, established feature division HIT Movies last spring.

‘Theatrical distributors and the marketplace are going to TV companies and mining television properties for films because they have a presold awareness and a strong built-in audience,’ says Julie Pistor, who heads up the unit.

HIT has several of its properties on the big-screen development slate. First up is a planned 2011 feature based on Thomas the Tank Engine, whose 65 years of brand equity and strong existing connection with kids and parents should help ignite box office returns. Pistor also has long-term plans to introduce new properties to the HIT portfolio by way of theatrical release. But in the meantime, the movie division’s immediate strategy will be to take existing preschool IPs and age them up a bit to appeal to a family audience.

L.A.-based Magic Lantern’s president Jeff Segal is also betting on established brand awareness to bring the company’s Heathcliff movie project, Bad Kitty, to the big screen. He says interest from several studios looks promising for a theatrical release that would blend animation and live action à la Alvin and Chipmunks and Stuart Little.

‘Doing the feature with a much larger marketing budget will create a lot more excitement and buzz in the terms of the global market,’ says Segal, which will take the brand a lot further than a direct-to-video release.

Segal plans primarily on developing movie properties that are pre-sold in the market and will draw an audience to ultimately build franchises with longevity, generate ancillary revenue streams and spawn sequels and remakes. And he’s got some gambling capital. Last fall the company created a US$10-million development fund with seed capital film investor TF2 Ventures to produce up to 20 films over the next three years. Bad Kitty is the first project, slated for release in 2011. Magic Lantern also has plans for slightly lower-budget films that put a contemporary spin on well-loved classic stories and fairy tales, such as Hansel and Gretel and Jack and the Beanstalk.

‘We don’t have the huge marketing budgets of Pixar and DreamWorks, so our company has to be more shrewd about how we spend and pick titles in order to have some momentum going in,’ says Segal.

Of course, producing and launching a theatrical release also comes with a healthy dose of risk. Even banking on an existing brand didn’t help box office results for Marathon Media’s Totally Spies movie. The Euro-led theatrical release, which had a budget of US$8 million and used a financing model featuring phone company Orange, an Italian co-pro partner and presales in Benelux and Eastern Europe. But it didn’t pack the punch the Parisian prodco was expecting. Opening alongside Disney’s Up and just after Fox’s Ice Age 3, both of which had massive marketing and hype, proved to be stiff competition. Marathon president Vincent Chalvon-Demersay also suspects the appetite for Totally Spies at the movie theater wasn’t as strong for French kids, who have access to the top-rated property everyday on TV.

Not looking to repeat the experience, Chalvon-Demersay says Marathon is sticking to its animated TV series roots for the time being and will be focusing on producing more seasons of popular boys action series Gormiti, which is also building a solid merchandising program.

‘TV series allow us to do merchandising that lasts two to three years, whereas merchandising for feature films will only last four months after its release,’ Chalvon-Demersay contends.

Brand building

Using a theatrical release to jumpstart a larger brand effort also ranks high with prodcos. Having the capability to produce a great 2-D or CGI movie at a fraction of what it would have cost 10 years ago has given independent studios an economically viable way to reach their audiences.

‘The challenge is being able to stay connected in a number of those fragmented domains,’ says Daniel Hawes, president of Toronto-based March Entertainment. March is gaining experience in movie production, first getting its feet wet with a co-pro deal that will see it produce direct-to-DVD titles for toyco Playmobil to be distributed by Sony, as well as a TV movie based on its animated adventure series, Dex Hamilton: Alien Entomologist. However, March also has three full-length theatrical projects in the works, for which Hawes says the prodco is finacing based on presold distribution deals with major studio partners, private investment and existing tax credits and regional incentives.

His first feature project, a pirate-themed feature entitled High Sea, is getting the full CGI, stereoscopic 3-D treatment and should head into production later this year.

For Hawes, producing movies has the potential to attract priceless media and, hopefully, consumer attention that can be used to build a long-term multiplatform brand. ‘Whether you’re a big studio like Disney or an independent, you have to think at the brand level,’ says Hawes. ‘The challenge is being able to stay connected in a number of these domains, and feature films have now entered the realm of accessibility.’

Movie production is also part of a wide multimedia strategy for Loreto, Italy-based Rainbow. The company is in development on a second theatrical release based on its Winx Club property, whose fourth TV series just started rolling out internationally. The first film, launched in 2007, brought in more than US$8 million at the box office and was among the top-10 most-watched movies for several weeks across Europe, according to Rainbow sales director Friderico Gatti.

‘The launch of a theatrical movie opens new opportunities, especially from a licensing point of view,’ says Gatti. ‘It enlarges the target audience to the whole family and thereby automatically extends the possible licensing activities,’ he adds.

Distribution, niche markets

As seems to be common in the European market, the second Winx movie will be distributed though Rainbow’s network of independent distribution partners, which Gatti says is necessary for responding to specific demands of each

market. ‘Our distributors are ready to invest all of their strength in the Winx theatrical launch because they understand the strategic importance of the brand in Europe,’ says Gatti. The launch is planned for October 2011 in Italy and then will roll out in the rest of Europe over the winter.

While striking a chord with North American theatrical audiences remains something of a holy grail with indie family film producers, kids animated features stand to really rake in dollars with a successful European theatrical run.

‘Generally, you’re looking at 50% to 75% of revenues coming from the international market,’ says March’s Hawes, who adds that international distribution is definitely part of his long-term theatrical plans, along with seeking out major studio partners for North American release.

Just over 50% of Planet 51′s US$71-million box office haul to date has come from non-US sales. HandMade’s Ryan says Canada, Spain, Italy and the UK performed particularly well, and he expects France and some other territories will open up during the mid-winter school break this year.

Hyper-low-cost features are a bit more of a challenge, however. Frederator’s Seibert says a US$2-million feature isn’t likely to open across 4,000 screens, in these cases looks to smaller indie distributors, like Sony label Screen Gems, to get a film project to market. And with an influx of low-budget projects emanating from the executive offices of kids prodcos worldwide, alternative distribution channels seem to be opening up a bit.

The New York International Children’s Film Festival, for one, recently launched its own kids movie distribution company, GKids, after the festival founders saw an opportunity to market films for wide theatrical release that aren’t getting picked up by major studio distributors.

‘It’s possible to make money and to find distribution for films that aren’t going to gross US$100 million at the box office, but might gross US$2 million, or even US$20 million, and can still be successful for all involved,’ says Eric Beckman, president of GKids and NYICFF. ‘The US has always been the problem for independent fare for families, and that is one thing GKids is trying to address by rethinking the distribution business model.’

Beckman, for the most part, eschews traditional studio models of pouring hundreds of thousands of dollars into making trailers and national ad buys. He gets indie prodcos to cut their own trailers, prints and one-sheets, and focuses on harnessing the internet to build buzz through social media, viral campaigns and traditional PR.

‘You have alternative marketing paradigms that people are really just beginning to play around with that no one has quite figured out how to use, so we’re pursuing that in terms of digital distribution and digital marketing,’ says Beckman. Only a year old, the company has two small kids features in release and has launched a video/community site (

In November, GKids acquired the US distribution rights to The Secret of Kells, a feature film co-pro between Ireland’s Cartoon Saloon, France’s Les Armateurs and Belgium-based Viva Film. Created by Cartoon Saloon’s Tomm Moore, the 2-D film is built around the fantastical Celtic myth. Beckman says he plans to distribute the flick across the US using grassroots marketing to attract attention.

‘I think there is an opportunity for handmade animated films in the US$5-million to US$10-million budget range. You can’t make a good CGI movie for that money, but with care you can make a visually unique, striking 2-D film as Tomm Moore has shown, and have a fairly reasonable bet at making your money back over several territories,’ says Beckman.

GKids is reaching out to animators, Irish American groups, adults who enjoy animation, and parents, particularly online moms – a group that Beckman says is second only to political sites in terms of growth – to build awareness for The Secret of Kells before it heads into theaters this year.

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