Imagine working somewhere and then reading "The studio stressed the layoffs are not imminent, but will take place later this year as Pixar focuses on making less content". Then having to go to work each day at a place that keeps saying we are all family here knowing that 2/10 of you are going to get axed. I have to think they will lose at least 10% just through attrition. Although for many of those people I would imagine they have landed their dream job; feel bad for them.
This is a classic layoff debate -- is it better to do it with zero warning, or is it better to let employees know that a layoff is coming?
Personally, I believe advance notice is better, because it signals to employees that, if layoffs are going to happen, there will be some time to prepare. By choosing to blindside employees, it creates a culture of paranoia, IMO. ("Will today be layoff day?" "What about next month?" "Oh no, it's the end of the quarter, does that mean tomorrow my laptop will lock up at 4am?")
What Pixar has created is an environment where nobody knows is they’re going to stay, so people self select into two buckets: 1) those who say “I’m not going to bust my ass just to get fired”. They coast and prepare to leave. And 2) those who work their ass off to try to “prove” themselves. If any of 2 get fired, it’s a bad morale hit for anyone around after the layoffs. You’ll lose actual talent this way.
Make the decision of who to layoff and do it, but be kind as you do.
> This is a classic layoff debate -- is it better to do it with zero warning, or is it better to let employees know that a layoff is coming?
No good answers here. They're both bad, but in different ways, and I suspect that whether one is worse than the other is probably a matter of personality type.
I know it's not practical because of select few bad apples, but giving a year's notice to the affected people, letting them finish up the work and mentally prepare, and all the while coaching them through the process of finding a new job seems like a humane thing to do.
It's kind of a weird move for companies to make because it's an oddly pro-labor signal to tell employees ahead of time to prepare for layoffs.
I agree, I prefer it.. but also, it's weird in 2024 where corps basically try to fuck everyone at every possible turn that they're being so open about these layoffs.
>I have to think they will lose at least 10% just through attrition
and before anybody says that's maybe intentional, that just a really dumb way to do layoffs. that's how you lose your best people, rather than your worst.
This assumes that there's a significant difference between top performers and the next tier down, and that it's important to keep 'the best people'. In most businesses there are plenty of other good people who can step up if the best ones leave. Its also rare that someone is 'the best' at everything; people have a range of skills and you'll only be losing the person who's best at one or two of them.
Most people who think companies have a 'best person' aspire to be seen as that person, and haven't really thought about what it would actually mean.
The worst will know they will have trouble getting a job elsewhere. The best might assume they are known to be the best, so they are safe. I would think it would be the middle people who would jump ship.
I don't understand the logic with employers dropping warnings like that. I knew ~2mo before my employer announced layoffs and it caused much unnecessary anxiety in my life.
But it shapes how you'll feel about the event & the future for a long long time after. The company was honest with you. When the day came it wasn't a complete shock.
I don't have a conclusive answer, but I'd want to know I think & respect companies that have the bravery to be up front.
Gives you a peace of mind once it is over. Also, allows you to prepare contingencies. Our company only now was recovering from the last year layoffs and now it is suddenly hit again. It would've been much more humane to know in advance not to relax.
There is a reason why layoffs always happen as a surprise and kept a secret. Now everyone thinks they might get laid off. The folks who are easily employable will switch. This might be the end of Pixar.
Classic overreaction on HN. Did you say the same when Amazon, Google, Facebook, and Microsoft slashed huge number of employees in last year? How about Spotify?
Perhaps it's a pivotal moment for those folks to rethink the whole "dream job" shindig, while being in the great position of having a job at Pixar when interviewing in the coming months.
I feel like there's a high chance of a layoff in my org as they had layoffs in other orgs yesterday and mine is one of major holdouts. I would very much wished for something definite, either for them to say that nothing currently planned or to say that it will happen later this month or something.
While layoffs are detrimental to employee morale (e.g. employees take less long-term risk), I wonder how much worse the effects of layoffs are in the creative industry.
You might be able to replace employees in a more utility-driven company. But creative people are not exactly interchangeable, as creative ideas tend to bounce better among employees who have "chemistry." These collective of creatives end up sharing tribal knowledge of producing creative outputs with a given expectation or taste. If you fire them, it will be difficult to replicate or enhance the creativity (by whatever metric we can try to measure it with).
Japanese film director Akira Kurosawa once lamented the dissolution of the studio system, which turned the industry into a loose gathering on freelancers. He believed it would be antithetical to creativity, which he sees to happen tribally.
A famous counter-example to layoffs in the creative industry is Nintendo. Former CEO Satoru Iwata opposed layoffs as a way to weather financial downturns, as layoffs would discourage employees from committing to their work in the long-term. Instead, Nintendo tries to guarantee stable employment with their sizable financial reserves, albeit not paying a high salary.
Animation studios were able to garner a sense of "expectation" and establish a brand (e.g. Pixar especially with their first 11 features) because of the "regulars" who worked on their releases. Layoffs would change the collaborative chemistry among employees, and can make it difficult to establish or maintain a brand.
The Nintendo model would never work in the Silicon Valley. Literally, some of the most talented video game programmers that the world has ever known worked most of their career for relative peanuts... compared to what Activision & Co. would have paid them. Much less stable? Yep.
From a purely financial perspective, Nintendo is not well run. An infamous quote: <<Nintendo has such a large cash reserve it could lose $250 million every year and wouldn't go bankrupt until 2052.>> Or: <<Nintendo cash on hand for the quarter ending September 30, 2023 was $14.250B.>> There is a limit to useful cash reserves. Else, it should be distributed as a cash dividend, share buyback, or buy a competitor / "invest".
In Japanese corporate thinking from 1950s to 1990s, lifetime employment was the singular goal for your employees, above all else. Read that twice and let that sink in. Layoffs were viewed as culturally impossible due to loss of face. It is nearly impossible to (culturally) "translate" this goal into the American state of mind. Simply stated: US employees take much more career risk and, correspondingly, are paid much more. I am not making a moral judgement here about either system -- there are pros and cons for both. My point: Little insight can be found here when comparing the layoff practices of uber-uber-uber-uber-uber-uber-uber-conservative Japanese corps vis-a-vis American tech companies. It is literally Mars vs Venus or Moon vs Earth -- a different planet (culture state of mind).
I work in Japan, but I am not Japanese. One of the biggest complaints from foreign software developers is that salaries are awful compared to their home countries. The complaining never stops about it. However, they overlook the full picture -- as noted above. From what I hear, Germany is quite similar -- much lower salaries, but way more stable (fewer layoffs) compared to SV.
Ok so Japanese game developers work for peanuts on the most beloved IP in the world... with stable lifelong careers. Are they happy? Miserable? How far does their salary go relative to their living conditions? Honestly curious.
Or maybe this is how you keep a company alive and producing good work. Sure Disney is more profitable, but it's become a soulless corporate machine, and will falter and die in the next 30 years. Nintendo will stay profitable and will continue to produce high quality products forever.
My first "startup" was cartoonlagoon.com. We were going to be a site for independent animators and artists with the draw being a showcase of more well-known artists releasing exclusive content you wouldn't see anywhere else.
We had some cool stuff from Kevin Eastman (Teenage Mutant Ninja Turtles/Heavy Metal) and others, but it never really took off.
Hearing the news about Pixar and other studios letting people go, made me think that something like this could totally be done today. Maybe it doesn't need to be its own site, but could be a channel on YouTube or something. There's definitely a shift happening in the space and I'm so excited for what's going to happen next.
And they hate it. Patreon, too (particularly the ones with more risqué work). A dedicated platform would be a major boon in terms of community, reliability, and possibly remuneration.
The bar to create animation is going to be so incredibly low in just a few years time, that the skills to have will be writing, imagination, focus, clarity, cohesion, and taste making.
Katzenberg has had a lot of flops, but he's right about this [1]. I'd even wager costs will get cut by 99.9% in ten years time.
All this to say I think you're 100% correct. Now's the time to build platforms and tools for independent animators.
Don’t get too drawn in by an ad. JK is pumping his AI startup here, he is intentionally exaggerating to generate surprise and interest to pitch to indies, knowing full well that high quality animated films that make a lot of money will continue to require large staffs and large budgets and take a long time to make.
If independent animation is super cheap and easy to produce, then how will indies make any money and support themselves? It’s already extremely difficult, and lowering the costs might only bring in more people with less skill and make that problem worse.
If you’re talking about a $200M Pixar film, on the other hand, cutting costs by 99.9% means a budget of ~$200K. Think about it: that would end up being a middling 1 year salary for a single person (especially if there’s any ancillary costs like benefits, software and equipment, office rent, etc..) They certainly can’t get any A-list Hollywood voice actors for that much. They can’t record the music for that much. Pixar will never be able to make a full length movie for a $200k budget, and they don’t actually want to, because that would signal low quality and low effort. Going too cheap would mean completely abandoning their aspirational status.
And don’t forget the marketing budgets are in the tens to hundreds of millions, which will not go down just because of better animation tools. It doesn’t make sense to dump that much marketing money into a product that only costs pennies to produce.
Animation production costs have gone down steadily over time, and animation is far more accessible to independent animators now than it was 20 years ago, and that will continue. Big Budget movie studios have historically used those savings to hire more people, increase the quality, and continued to spend more or less exactly the same amount of money (or more) per film. Budgets are higher now than they were on Toy Story, same goes for VFX, and I think it’d be quite safe to predict the general trend for movie budgets that has lasted around a hundred years to continue for the next ten, with or without AI.
Bill Watterson didn't need all these tools and platforms. Just paper and ink.
Right now we have content, info and tool overload and Layoffs are a sign of over production.
Plus people like Katzenberg love to jump around funding new stuff and telling/distracting/fomoing people more creative than them - hey you better learn this or be good at that, cause why else do people need him in the room?
> The bar to create animation is going to be so incredibly low in just a few years time, that the skills to have will be writing, imagination,
O yes, and those 'creative writers' wouldn't be humans. At least at low level it can be easily automated. After human gives the main idea and story line. Actually this can be done automatically too, but human touch is important to claim 'human made'. I'm afraid there will be radical changes. Like those which happened to photography once everybody got a camera. Now AI changes the field again. For the best or worst depends how you look at it.
Animation is probably less capital-intensive than live-action film-making, but more labor-intensive given the need to care for each frame. But so long as you have an abundance of time, you can make a movie on your own.
Surprisingly, you also don't need to draw very well to animate. (But it will help a lot if you can.) There are crude works of animation that still found success (maybe more observable in the US than Japan), like South Park and Don Hertzfeldt's works. These examples might even illustrate that audiences care more about the writing than the drawings.
The tricky part may be finding an audience. There's so much content on the web, that it may still help to exhibit works in human-curated forums like film festivals. Somehow, then-student Don Hertzfeldt found his way into Cannes, where he probably gained much more exposure. Later, Don Hertzfeldt and Mike Judge (of Beavis and Butthead fame) supported other animators find exposure by hosting The Animation Show (last held in 2008).
There are plenty of film festivals showcasing animation today, shorts and feature-length, but I wonder which ones would be most effective. The dream of "breaking in" with a film festival screening has allured many aspiring film-makers, to the extent that scammers even start their own film festivals for the sake of collecting exorbitant entry fees (which doesn't guarantee being showcased at the festival). With film-makers having to pay entry fees for numerous festivals to increase chances of finding the right audience, the "marketing" fee can become more expensive than an indie production itself.
I wonder how solo or skeleton-crew animators would "break in" and find an audience today.
I wonder what he’s seen that makes him think that. I love playing with Midjourney, but if you want it to create a specific thing, you’re out of luck. I can see AI getting you somewhere, but I can’t see it coming up with a consistent, good quality result.
It's interesting that Disney today almost the entire profits of the company come from the parks division (which also includes cruises, resorts and "experiences"). The media division by itself is in a massive war for eyeballs with tons of other streaming competitors, all of whom are probably over-investing in content relative to what consumers can support.
One interesting possibility is that maybe the business model of media companies in the 21st century will become content as a loss leader for the purpose of providing valuable IP to amusement parks. Certainly seems like a similar thing is happening with Comcast with their massive expansion of Universal parks.
That is nuts. Queue up Space Balls: "MERCHANDISING!"
Well now though, I see a video game I never heard of "Dungeon Fighter Online". Here's one of the recent reviews from the Steam Store:
"I spent $45,000 on a relentless journey into the heart of darkness with Dungeon Fighter Online (DFO), a 2D beat-em-up game that has garnered both fervent enthusiasts and critical skeptics,..."
This is a fair point, but as of their most recent financials merchandise (excluding merchandise sold inside the parks) only made up $5bn of the $28bn in the "Parks, Experiences and Product" category. By contrast park admissions was $8bn, resorts was $6bn and food/merchandise sold in the parks was $6bn.
So IMO this is a departure from the classic merchandise based strategy. It seems pretty clear that the theme parks more so than the products are the major profit centers today.
Change some distribution models and mediums of distribution, and it's the same cycle between content, brand, and customer eyeballs.
Which makes sense, as the key observation was: brands and characters are more valuable than content, but content creates and sustains them.
And you can afford more content if you have more channels to monetize it through. Which is the same observation Google made with respect to advertising integration, albeit just buying platforms instead of works.
Amusement parks are part of the inefficient monetization Hollywood is built around. The video games that make the most money give gameplay away for free too, but the difference is you can sell infinite skins and pay only 30% to assholes like Apple. It remains to be seen if even that cost will remain.
Disney lost not due to streaming, but due to its failed interactive division.
This is if course highly subjective, but for all this investment in content I, as a consumer, seem to find less and less content I like. Maybe it's just because I'm not part of the demographics that Hollywood cares about any more, but I personally would like to get much more "good" content.
Wild guess. SEC Q1 Reporting Deadline is Jan 16th. Share prices have been flat or slightly down on a year over year basis for many companies. They're all trying to hedge the bad news?
The budget cycle for 2024 has likely finished so orgs are moving to execute on 2024 plans.
Executives can finalize things a bit more easily when folks out of the office as the day to day a bit slower. HR / Acctg / IT also usually like doing a one off project in these spots - usually a smaller group is in loop on these things.
The week between Christmas and New Years for the quiet meetings and week after for plans to be finished up.
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Once again the workers pay the price for bad leadership while the leadership largely continues to simply collect large paychecks for that bad execution. It's no different to the layoffs for Google Assistant. Do you think the average IC determines the outcome of Pixar (or Google) projects?
Disney's content strategy has generally been abysmal. Milking Star Wars IP with content that varies between mid and bad for the most part. Marvel really fell off post-Avengers. Pixar once made some of the great movies period, animated or otherwise.
Creative ventures can't be reduced to a formula. Corporate America seeks to cut costs and reduce their business plan to a formula.
How many times do people need to see this before they develop class consciousness?
To be fair, Bob Chapek also lost his job over how he managed Disney. I'm not sure if he actually dropped the ball, or if Iger left while things were good, but the pipeline was about to run dry.
I imagine it is mostly Iger leaving while things were good.
Disney was never going to be able to retain the amount of people’s time it had in previous decades with the competition from other forms of entertaining, from video games to YouTube to Instagram to TikTok to WhatsApp and even to sites like Reddit/HN.
I think they tried to battle this by saturating the market with their IP and that goose is done laying eggs, so I am assuming they will lean on sports gambling now as long as they have ESPN.
Profitability is the new target in 2024. Not losing so much money on useless underperforming movies. Let's go through the recent Pixar flops in the years before since 2020.
Onward (2020) - Budget: $200 million
- Box Office: $142 million (Loss)
Soul (2020) - Budget: $150 million
- Box Office: $121 million (Loss)
Luca (2021) - Budget: >$100+ million
- Box Office: $49.8 million (Loss)
Turning Red (2022) - Budget: $175 million
- Box Office: $20.1 million (Loss)
Lightyear (2022) - Budget: $200 million
- Box Office: $226.4 million (Tiny profit)
Apart from Elemental (2023) which was highly successful, there seems to be a string of more box office failures from Pixar recently and it being turned into a high cost factory. Disney saw the same and decided to let 20% from Pixar go.
I think Onward (edit: maybe not, see comment below) and Lightyear were bona fide misses, but Soul, Luca and Turning Red were all released straight to D+ during the pandemic, weren't they? You can't judge their performance without internal Disney metrics then?
I'm in the camp that believes Pixar quality has fallen, and I'm not surprised at the recent losses (COVID or not).
Onward -- what a mess. The movie about walking pants. I could feel the churn of many story drafts they went through. It was a cool world and character designs, but the overall story just didn't land.
Soul -- full of emotion and beautiful, but didn't quite nail it. The pre-birth world has echoes of Inside Out, but not nearly as well-conveyed. In fact, the abstract art representations were a bit on the nose, and a rare case where I was too aware that these were ideations from the Pixar story team in the Pixar story room. Overall it had many wonderful sequences. But the main character journey was kind of odd. Joe loved music and it certainly seemed to be his source of happiness. But his lesson was that music wasn't necessarily his purpose and he should focus more on what makes him happy. ?
Luca -- adorable, but unambitious. The undersea world was so empty!
Turning Red -- ugh. What exactly was the character development? She is announced in the very first sequence as a confident individualist, and then her panda-journey teaches her to be... a confident individualist. Did no one notice this? Also, I'm bothered by the hubris of a first-time writer-director making the main character (and locale, and the time period) exactly themselves. I suppose if you need your stories to be biographical you can get away with it once, but it's poor form IMHO.
When Onward was in theaters COVID had already massively tanked attendance.
Soul, Luca, and Turning Red only had box office releases in countries that did not have Disney+, except possibly for very limited US releases (e.g., Luca had a theatrical release for 1 week in a single US theater).
In the countries where they did get a normal theatrical release if you compare them with Earlier big Pixar hits, they performed comparably.
If any one of them had been a 2019 movie instead of a 20222-2022 movie it would have easily made at least twice its budget and probably more.
I would be careful about Hollywood loss numbers. Disney is in it for the merch. That said, I wonder how those movies stack up to older greats like Cars, Toy Story, or Monsters Inc. They are only true failures if they fail to sell toys. Which considering I’ve never seen merch for any of these movies on the street tells me they probably have failed.
I’m near certain they fail compared against the original Pixar movies. Pixar used to make surefire films for the whole family. Now it’s just more Disney nonsense, the soul has been lost.
What happened to Pixar? Their storytelling used to be second to none. But most of their latest films have been so lacking that I haven’t even bothered to watch the last few. In fact, the last one I saw was Onward on the very day the theaters closed down for the pandemic. It was… okay. A bit of a disappointment. They have lost something special they used to have.
Re: Lightyear, a $226.4M box office return on a $200M production budget isn't even close to being in profit, tiny or otherwise. For one thing, a film's marketing budget isn't included in the production budget figure and in this case was probably $100M+ itself. Secondly, Disney do not receive 100% of the box office take. After the distributor's cut, it's probably closer to 50%. Films of this type need to make maybe 3 times their budget at the box office to break even, making Lightyear a spectacular flop.
Surely "Box Office" isn't the best metric to look at in any of those years? I get that it's hard to figure out what the better metric is, but are we all meant to pretend that theater ticket purchases are the primary driver of revenue for movie releases nowadays, even though it's obvious that can't possibly be true?
There is a valid question on how valuable streaming is long term. The theory that we would make content once and lock in profits forever seems dubious if everyone competes on last weeks content. Non zero interest rates also pull in profitability horizons by decades.
“Note: Budget numbers for movies can be both difficult to find and unreliable. Studios often try to keep the information secret and will use accounting tricks to inflate or reduce announced budgets.”
If Disney was really losing that much money repeatedly, they would stop making movies. And yet they don’t stop, but they do keep making it look like they’re not very profitable. Why?
I mean, these numbers are almost dishonesty misleading when looking in a vacuum. Onward released March 6th 2020. It was receiving mid reviews but it was very much on par to st least break even if theatres stayed open for more than 2 weeks.And Soul IMO is one of Pixar's greats completely screwed by circumstance, released in June to Disney+. I'm surprised it even crossed 100m to be honest.
I'm not in charge of business, but the curve of box office seemed to rise back with the waning of the pandemic. Even for the critically panned Lightyear, so it's not like the better movies did better. It's no secret that streaming services make nowhere near the revenue of a theatrical release, but Disney aggressively shifted so it could get its handle in as 2nd in the streaming wars. I figure that unprofitable movies were a price to pay there.
With those numbers, Lightyear was definitely not profitable. Published budgets usually don't include the marketing budget, which is usually the same or more than the production budget. Even if you're skimping on marketing it's still going to be at least equal to half the production budget.
Additionally, theaters take a cut of the box office revenue. Domestically they usually take about half, internationally the average is about 60%.
Edit: Looking at the numbers, Elemental probably only broke even or made a slight profit.
Lightyear wasn't a success either when you consider marketing costs, which apparently makes it where you need 1.5x the budget just to break even, or so I've read.
Normally yes. But I wouldn't be surprised if marketing budgets were slashed with the pandemic as well. So all our usual rule if thumbs are out of whack.
To elaborate on some of the items others have mention, here are head counts for Pixar's most recent film, Elemental, based on the credits on IMDB:
1 director
3 writers
20 voice actors
5 producers
1 music composer
2 cinematographers
12 editing
5 casting
1 production designer
2 art directors
2 production managers
14 art department
42 sound department
85 visual effects
68 animation
46 music
1 continuity
77 additional crew
That's 387 people. These kinds of movies take years to produce (7 for Elemental), although not everyone works on them full time during the full length of production.
Oh I disagree, Luca is great! But of course nobody saw it in the theater, approximately everyone who watches Pixar movies has a Disney+ subscription...
afaik it's also related to how disney treats pixar movies differently. Wasn't Soul & others first movies released exclusively/or with priority on disney+? To my knowledge they'll reverse this in 2024, will see how this pans out
If I understand what I read recently about movie budgets, for big films like these they need to make roughly double that headline budget to break even. The budget does not include distribution and marketing. So even Lightyear was actually a loss
edit: (and incidentally Lightyear is the only one of these I've seen. I've got 3 kids and we used to love Pixar films but these days.. meh. Even though we've since had the third so still should be the same demographic).
Not really. If you include the costs of marketing and distribution, a film needs to gross about twice its "budget" to break even. Furthermore, this rule of thumb only applies to US gross, where studios get much more of the actual ticket price (75% iirc) than overseas. In some markets, India for example, American studios get about 15% of the actual ticket-price gross.
To break even at the box office, you need to make at least 2.5x your production budget (so $500M for Lightyear). It's very unlikely that they were able to close the gap with streaming - the movie lost a ton of money.
The 2.5x multiple is because the production budget doesn't include marketing costs (which can easily be as high as the production budget) as well as the fact that they only get a percentage of the box office (the movie theaters need to live too). This is especially true for the non US box office, where the percentage going back to the studio is lower than in the US
There are quite a few numbers on the breakeven point but a quick google says it’s usually 2.5x-3x the budget - due to marketing cost and distribution fees.
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Personally, I believe advance notice is better, because it signals to employees that, if layoffs are going to happen, there will be some time to prepare. By choosing to blindside employees, it creates a culture of paranoia, IMO. ("Will today be layoff day?" "What about next month?" "Oh no, it's the end of the quarter, does that mean tomorrow my laptop will lock up at 4am?")
What Pixar has created is an environment where nobody knows is they’re going to stay, so people self select into two buckets: 1) those who say “I’m not going to bust my ass just to get fired”. They coast and prepare to leave. And 2) those who work their ass off to try to “prove” themselves. If any of 2 get fired, it’s a bad morale hit for anyone around after the layoffs. You’ll lose actual talent this way.
Make the decision of who to layoff and do it, but be kind as you do.
No good answers here. They're both bad, but in different ways, and I suspect that whether one is worse than the other is probably a matter of personality type.
I agree, I prefer it.. but also, it's weird in 2024 where corps basically try to fuck everyone at every possible turn that they're being so open about these layoffs.
and before anybody says that's maybe intentional, that just a really dumb way to do layoffs. that's how you lose your best people, rather than your worst.
Most people who think companies have a 'best person' aspire to be seen as that person, and haven't really thought about what it would actually mean.
Also cost savings to consider such as severance.
I don't have a conclusive answer, but I'd want to know I think & respect companies that have the bravery to be up front.
Classic overreaction on HN. Did you say the same when Amazon, Google, Facebook, and Microsoft slashed huge number of employees in last year? How about Spotify?
1. Say nothing until day of. 2. Say someone somewhere at some point or by some date.
For the employees, neither solves the problem of uncertainty that causes the most psychological turmoil.
The best for the employee is being told several months in advance exactly who is going to get axed and when.
This is considered risky for the business though. At that point you have an effective outsider with access to your systems for several months.
Sounds like the mafia
And they won't have to pay any severance packages for that 10%. Heck, if 20% choose to leave they can cancel the layoff. Imagine the PR!
The outcome of corporate comms strategy is never unplanned or coincidental. People quitting over it is exactly why they made this announcement.
Which is one of the benefits of making such an announcement.
You don't have to pay severance or unemployment benefits to those who quit on their own.
And if you are already treating headcount as a fungible commodity, it's a pure win for the HR department.
Is this actually happening now? It's a great trope and probably most of us have seen it in action, but I wonder if it's even reality any more.
The labor market is tough, the attrition you speak of did not happen at Meta. And that's for SWEs who have a lot of potential employers.
Surely nobody actually believes that?
You might be able to replace employees in a more utility-driven company. But creative people are not exactly interchangeable, as creative ideas tend to bounce better among employees who have "chemistry." These collective of creatives end up sharing tribal knowledge of producing creative outputs with a given expectation or taste. If you fire them, it will be difficult to replicate or enhance the creativity (by whatever metric we can try to measure it with).
Japanese film director Akira Kurosawa once lamented the dissolution of the studio system, which turned the industry into a loose gathering on freelancers. He believed it would be antithetical to creativity, which he sees to happen tribally.
A famous counter-example to layoffs in the creative industry is Nintendo. Former CEO Satoru Iwata opposed layoffs as a way to weather financial downturns, as layoffs would discourage employees from committing to their work in the long-term. Instead, Nintendo tries to guarantee stable employment with their sizable financial reserves, albeit not paying a high salary.
Animation studios were able to garner a sense of "expectation" and establish a brand (e.g. Pixar especially with their first 11 features) because of the "regulars" who worked on their releases. Layoffs would change the collaborative chemistry among employees, and can make it difficult to establish or maintain a brand.
From a purely financial perspective, Nintendo is not well run. An infamous quote: <<Nintendo has such a large cash reserve it could lose $250 million every year and wouldn't go bankrupt until 2052.>> Or: <<Nintendo cash on hand for the quarter ending September 30, 2023 was $14.250B.>> There is a limit to useful cash reserves. Else, it should be distributed as a cash dividend, share buyback, or buy a competitor / "invest".
In Japanese corporate thinking from 1950s to 1990s, lifetime employment was the singular goal for your employees, above all else. Read that twice and let that sink in. Layoffs were viewed as culturally impossible due to loss of face. It is nearly impossible to (culturally) "translate" this goal into the American state of mind. Simply stated: US employees take much more career risk and, correspondingly, are paid much more. I am not making a moral judgement here about either system -- there are pros and cons for both. My point: Little insight can be found here when comparing the layoff practices of uber-uber-uber-uber-uber-uber-uber-conservative Japanese corps vis-a-vis American tech companies. It is literally Mars vs Venus or Moon vs Earth -- a different planet (culture state of mind).
I work in Japan, but I am not Japanese. One of the biggest complaints from foreign software developers is that salaries are awful compared to their home countries. The complaining never stops about it. However, they overlook the full picture -- as noted above. From what I hear, Germany is quite similar -- much lower salaries, but way more stable (fewer layoffs) compared to SV.
We had some cool stuff from Kevin Eastman (Teenage Mutant Ninja Turtles/Heavy Metal) and others, but it never really took off.
Hearing the news about Pixar and other studios letting people go, made me think that something like this could totally be done today. Maybe it doesn't need to be its own site, but could be a channel on YouTube or something. There's definitely a shift happening in the space and I'm so excited for what's going to happen next.
Katzenberg has had a lot of flops, but he's right about this [1]. I'd even wager costs will get cut by 99.9% in ten years time.
All this to say I think you're 100% correct. Now's the time to build platforms and tools for independent animators.
[1] https://www.cartoonbrew.com/ideas-commentary/jeffrey-katzenb...
If independent animation is super cheap and easy to produce, then how will indies make any money and support themselves? It’s already extremely difficult, and lowering the costs might only bring in more people with less skill and make that problem worse.
If you’re talking about a $200M Pixar film, on the other hand, cutting costs by 99.9% means a budget of ~$200K. Think about it: that would end up being a middling 1 year salary for a single person (especially if there’s any ancillary costs like benefits, software and equipment, office rent, etc..) They certainly can’t get any A-list Hollywood voice actors for that much. They can’t record the music for that much. Pixar will never be able to make a full length movie for a $200k budget, and they don’t actually want to, because that would signal low quality and low effort. Going too cheap would mean completely abandoning their aspirational status.
And don’t forget the marketing budgets are in the tens to hundreds of millions, which will not go down just because of better animation tools. It doesn’t make sense to dump that much marketing money into a product that only costs pennies to produce.
Animation production costs have gone down steadily over time, and animation is far more accessible to independent animators now than it was 20 years ago, and that will continue. Big Budget movie studios have historically used those savings to hire more people, increase the quality, and continued to spend more or less exactly the same amount of money (or more) per film. Budgets are higher now than they were on Toy Story, same goes for VFX, and I think it’d be quite safe to predict the general trend for movie budgets that has lasted around a hundred years to continue for the next ten, with or without AI.
Right now we have content, info and tool overload and Layoffs are a sign of over production.
Plus people like Katzenberg love to jump around funding new stuff and telling/distracting/fomoing people more creative than them - hey you better learn this or be good at that, cause why else do people need him in the room?
O yes, and those 'creative writers' wouldn't be humans. At least at low level it can be easily automated. After human gives the main idea and story line. Actually this can be done automatically too, but human touch is important to claim 'human made'. I'm afraid there will be radical changes. Like those which happened to photography once everybody got a camera. Now AI changes the field again. For the best or worst depends how you look at it.
Surprisingly, you also don't need to draw very well to animate. (But it will help a lot if you can.) There are crude works of animation that still found success (maybe more observable in the US than Japan), like South Park and Don Hertzfeldt's works. These examples might even illustrate that audiences care more about the writing than the drawings.
The tricky part may be finding an audience. There's so much content on the web, that it may still help to exhibit works in human-curated forums like film festivals. Somehow, then-student Don Hertzfeldt found his way into Cannes, where he probably gained much more exposure. Later, Don Hertzfeldt and Mike Judge (of Beavis and Butthead fame) supported other animators find exposure by hosting The Animation Show (last held in 2008).
There are plenty of film festivals showcasing animation today, shorts and feature-length, but I wonder which ones would be most effective. The dream of "breaking in" with a film festival screening has allured many aspiring film-makers, to the extent that scammers even start their own film festivals for the sake of collecting exorbitant entry fees (which doesn't guarantee being showcased at the festival). With film-makers having to pay entry fees for numerous festivals to increase chances of finding the right audience, the "marketing" fee can become more expensive than an indie production itself.
I wonder how solo or skeleton-crew animators would "break in" and find an audience today.
One interesting possibility is that maybe the business model of media companies in the 21st century will become content as a loss leader for the purpose of providing valuable IP to amusement parks. Certainly seems like a similar thing is happening with Comcast with their massive expansion of Universal parks.
https://en.wikipedia.org/wiki/List_of_highest-grossing_media...
Look at the totals broken out by area of revenue. Pokemon is a big offender, the games and movies might as well not exist from a revenue standpoint.
Pokémon $88 billion Licensed merchandise – $80.8 billion[b] Pokémon mobile games – $6.13 billion[c] Box office – $1.156 billion[26]
Now you know why everthing has to have some sort of T-shirt, hat, pen, keychain blah blah.
Well now though, I see a video game I never heard of "Dungeon Fighter Online". Here's one of the recent reviews from the Steam Store:
"I spent $45,000 on a relentless journey into the heart of darkness with Dungeon Fighter Online (DFO), a 2D beat-em-up game that has garnered both fervent enthusiasts and critical skeptics,..."
Holy Cow. I can't even.
So IMO this is a departure from the classic merchandise based strategy. It seems pretty clear that the theme parks more so than the products are the major profit centers today.
Change some distribution models and mediums of distribution, and it's the same cycle between content, brand, and customer eyeballs.
Which makes sense, as the key observation was: brands and characters are more valuable than content, but content creates and sustains them.
And you can afford more content if you have more channels to monetize it through. Which is the same observation Google made with respect to advertising integration, albeit just buying platforms instead of works.
[0] From article: https://hbr.org/2013/05/what-makes-a-good-corporate-st
Disney lost not due to streaming, but due to its failed interactive division.
https://blog.auditanalytics.com/when-does-a-companys-year-en...
Executives can finalize things a bit more easily when folks out of the office as the day to day a bit slower. HR / Acctg / IT also usually like doing a one off project in these spots - usually a smaller group is in loop on these things.
The week between Christmas and New Years for the quiet meetings and week after for plans to be finished up.
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Disney's content strategy has generally been abysmal. Milking Star Wars IP with content that varies between mid and bad for the most part. Marvel really fell off post-Avengers. Pixar once made some of the great movies period, animated or otherwise.
Creative ventures can't be reduced to a formula. Corporate America seeks to cut costs and reduce their business plan to a formula.
How many times do people need to see this before they develop class consciousness?
Disney was never going to be able to retain the amount of people’s time it had in previous decades with the competition from other forms of entertaining, from video games to YouTube to Instagram to TikTok to WhatsApp and even to sites like Reddit/HN.
I think they tried to battle this by saturating the market with their IP and that goose is done laying eggs, so I am assuming they will lean on sports gambling now as long as they have ESPN.
Never. Because the carrot to join their class will continue to be dangled.
Onward -- what a mess. The movie about walking pants. I could feel the churn of many story drafts they went through. It was a cool world and character designs, but the overall story just didn't land.
Soul -- full of emotion and beautiful, but didn't quite nail it. The pre-birth world has echoes of Inside Out, but not nearly as well-conveyed. In fact, the abstract art representations were a bit on the nose, and a rare case where I was too aware that these were ideations from the Pixar story team in the Pixar story room. Overall it had many wonderful sequences. But the main character journey was kind of odd. Joe loved music and it certainly seemed to be his source of happiness. But his lesson was that music wasn't necessarily his purpose and he should focus more on what makes him happy. ?
Luca -- adorable, but unambitious. The undersea world was so empty!
Turning Red -- ugh. What exactly was the character development? She is announced in the very first sequence as a confident individualist, and then her panda-journey teaches her to be... a confident individualist. Did no one notice this? Also, I'm bothered by the hubris of a first-time writer-director making the main character (and locale, and the time period) exactly themselves. I suppose if you need your stories to be biographical you can get away with it once, but it's poor form IMHO.
It was about a son reconnecting with his father...and his brother.
RT 88% critics, 95% audience
Not many saw it, but those who did loved it.
When Onward was in theaters COVID had already massively tanked attendance.
Soul, Luca, and Turning Red only had box office releases in countries that did not have Disney+, except possibly for very limited US releases (e.g., Luca had a theatrical release for 1 week in a single US theater).
In the countries where they did get a normal theatrical release if you compare them with Earlier big Pixar hits, they performed comparably.
If any one of them had been a 2019 movie instead of a 20222-2022 movie it would have easily made at least twice its budget and probably more.
Lightyear is the only real flop on your list.
Maybe people didn't want to take their kids to watch a movie about panda periods?
It's crazy no one in this thread has suggested a possible drop in quality in the creativity at Disney.
He was an awful lot of what made them work.
Mostly it’s that you’ve just grown older.
Also pay extra special attention to the warnings you find on the “sources” for this data: https://www.the-numbers.com/movie/budgets
“Note: Budget numbers for movies can be both difficult to find and unreliable. Studios often try to keep the information secret and will use accounting tricks to inflate or reduce announced budgets.”
If Disney was really losing that much money repeatedly, they would stop making movies. And yet they don’t stop, but they do keep making it look like they’re not very profitable. Why?
US and Canada movie tickets sold in 2019 was approximately 1.2B. In 2020, it was down 80% to 223M, to 499M in 2021, and to 813M in 2022. Onward was the 7th highest grossing film in 2020, Lightyear was 15th in 2022. (https://www.boxofficemojo.com/year/2020/?grossesOption=total..., https://www.boxofficemojo.com/year/2022/?grossesOption=total...)
Weren't Soul, Luca, and Onward direct to Disney+ because of the covid pandemic?
Your analysis is missing the elephant in the room.
I'm not in charge of business, but the curve of box office seemed to rise back with the waning of the pandemic. Even for the critically panned Lightyear, so it's not like the better movies did better. It's no secret that streaming services make nowhere near the revenue of a theatrical release, but Disney aggressively shifted so it could get its handle in as 2nd in the streaming wars. I figure that unprofitable movies were a price to pay there.
Additionally, theaters take a cut of the box office revenue. Domestically they usually take about half, internationally the average is about 60%.
Edit: Looking at the numbers, Elemental probably only broke even or made a slight profit.
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They’re coming to theatres now, years after they were released.
can anyone explain what are the biggest cost drivers for pixar in spending 200+ mills on a movie??
A million for each main voice actor
$100k for supporting actors
Orchestral score (not many people can do those)
$50k per licensed song
Work on the "game engine" that supports the film (each film used to break technical ground... Fur in monsters Inc, hair in the Incredibles, etc)
Motion capture, clay modelling, 3D modelling, rigging, animating... everybody needs a studio quality machine and display...
The only thing I feel confident isn't a big chunk of the cost is the actual rendering.
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edit: (and incidentally Lightyear is the only one of these I've seen. I've got 3 kids and we used to love Pixar films but these days.. meh. Even though we've since had the third so still should be the same demographic).
Btw, zippia.com says their revenue is 624k USD per employee. Layoff is needed: less than 1m per employee is unacceptable! /s
The 2.5x multiple is because the production budget doesn't include marketing costs (which can easily be as high as the production budget) as well as the fact that they only get a percentage of the box office (the movie theaters need to live too). This is especially true for the non US box office, where the percentage going back to the studio is lower than in the US