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Dreamwork's massive layoff...

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Blond polycounter lvl 9
At first, we weren't sure on how this would end...

http://www.animationmagazine.net/features/dreamworks-employees-face-major-layoffs/?doing_wp_cron=1421728245.5123419761657714843750


But now it's confirmed.. 500 guys..

http://www.cartoonbrew.com/business/breaking-dreamworks-animation-will-shut-down-pdidreamworks-studio-over-500-jobs-will-be-eliminated-108161.html


What I don't get is that they blame their loss on the poor revenue from their latest movies; Penguins of Madgascar, Sherman and Peabody and Rise of Thue Guardians but then again, seeing how these titles seemed rehashed, were based on poor comedy/story and badly marketed (just like that upcoming title Almost Home with Rihanna which will surely fail), I don't know how they coudn't have predicted it...:(


Plus, when I look at the Total Budget versus Box Office Revenue of these titles, most of them werent even that bad, like actually grossing the double of the budget so they still get some sort of revenue don't they??:(

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  • CougarJo
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    CougarJo polycounter lvl 6
    Outch 500 :o Hope everyone will get back on their feets :/
  • BagelHero
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    BagelHero interpolator
    ...seeing how these titles seemed rehashed...
    Wow, excuse you. Rise of the Guardians was great. One of my favorite kids movies.
    Sherman and Peabody wasn't entirely contrived, either, even if it wasn't incredible.

    Anyway, arguments on subjective statements aside, 500 jobs...
  • Muzzoid
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    Muzzoid polycounter lvl 10
    "Rise of the Guardians"

    Made by animal logic, in Sydney Australia.

    (dude, it was made within driving distance of you!!!!)

    EDIT:

    Da hell, Turns out rise of the guardians isn't legend of the guardians.

    Confusing titles much?

    Sorry dude, carry on >_>.

    Also this sucks.
  • Kwramm
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    Kwramm interpolator
    I wonder how much they'll shift to Oriental Dreamworks here in Shanghai. They've been building that place quite aggressively.
  • Thoss
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    Thoss polycounter lvl 10
    Muzz wrote: »
    "Rise of the Guardians"

    Made by animal logic, in Sydney Australia.

    (dude, it was made within driving distance of you!!!!)

    EDIT:

    Da hell, Turns out rise of the guardians isn't legend of the guardians.

    Confusing titles much?

    Sorry dude, carry on >_>.

    Also this sucks.

    Poignant illustration of the situation around their films?

    This industry feels so very unstable at the moment and it's really weird. None of the films out-right tanked and bankrupted the company.

    Very sad, but they're very talented people, I'm sure they'll land on their feet.
  • Meloncov
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    Meloncov greentooth
    Kwramm wrote: »
    I wonder how much they'll shift to Oriental Dreamworks here in Shanghai. They've been building that place quite aggressively.

    Little to none, as I understand it. The Shanghai studio is focused on content for the Chinese market.
  • Kwramm
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    Kwramm interpolator
    Meloncov wrote: »
    Little to none, as I understand it. The Shanghai studio is focused on content for the Chinese market.

    That's what I heard a year ago. But one of their high end productions is already intended for a global audience: Kung Fu Panda 3. I wouldn't be surprised if they change the plan and add more titles.

    I'm just thinking it would be odd to produce for the local market if they can pull off movies that can succeed domestically and internationally. The domestic feature animation market is already full of western productions which seem to do quite well. If there were Chinese feature animation, the state would already push it, because here in China the government decides what cinemas show (ouch!), but apparently there isn't.

    My take is that the local content is rather for direct-to-video or TV.

    (sounding like a conspiracy nut):
    The main reason for Kung Fu Panda to be produced by ODW could be to get bonus points with the communist party. Many Chinese weren't happy that an "evil" American company dares (is able) to make a "Chinese" movie like Kung Fu Panda while the Chinese themselves can't! Nationalist emotions got a bit high when the last installment was released here.

    Obviously, making such a movie IN China by Chinese staff would get Dreamworks a lot of bonus points in a potentially very big market - especially since the communist party decides what gets into the cinemas and what doesn't.

    Now I don't think that's the case. Except maybe for the last paragraph. The nationalists will sure feel better if the next Kung Fu Panda is made in China.
  • Muzzoid
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    Muzzoid polycounter lvl 10
    Thoss. Haha pretty much, that's why id didn't just edit my post and remove my mistake.
  • Thoss
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    Thoss polycounter lvl 10
    Muzz wrote: »
    Thoss. Haha pretty much, that's why id didn't just edit my post and remove my mistake.

    For the life of me, I couldn't tell you what a Dreamworks film is. I think most people still think of them as "Shrek sequel maker". They eventually progressed out of that though and had some good films - How To Train Your Dragon, Kung Fu Panda and Croods are great to me. They've just dug themselves a pit in terms of reputation because of their early track record so they don't generate the same excitement as Pixar. Sadly, because of bean-counter decisions artists are paying the price.
  • ambershee
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    ambershee polycounter lvl 17
    Absolutely reeks of corporate bullshit to move operations to China. In the last three years Dreamworks Animation have put out 9 films:

    Kung Fu Panda 2 (Profitable: 450% return).
    Puss in Boots (Profitable: 425% return).
    Madagascar 3 (Profitable: 520% return)
    Rise of the Guardians (Profitable: 210% return).
    The Croods (Profitable: 435% return).
    Turbo (Profitable: 225% return).
    Peabody and Sherman (Profitable: 190% return).
    How to Train Your Dragon 2 (Profitable: 430% return).
    Penguins of Madagascar (Profitable: 220% return)*.

    *Penguins has only been released in China and North America so far, European run still to come.


    Dreamworks Animation have only ever had one unprofitable film (Road to El Dorado), and that was fifteen years ago and the return on all of their products is double the investment (bar one, which was pretty close); clearly stable growth. Most film studios have a few blockbusters with these kind of numbers, and a number of duds that barely break even or turn a big loss. Dreamworks on the other have consistently proven profitable.

    They might not be turning profits as massive as Pixar, but they're still solid.


    Edit: actually, I wonder if they're laying off their television studios. Dreamworks TV shows are pretty terrible.
  • Meloncov
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    Meloncov greentooth
    ambershee wrote: »
    Absolutely reeks of corporate bullshit to move operations to China. In the last three years Dreamworks Animation have put out 9 films:

    Kung Fu Panda 2 (Profitable: 450% return).
    Puss in Boots (Profitable: 425% return).
    Madagascar 3 (Profitable: 520% return)
    Rise of the Guardians (Profitable: 210% return).
    The Croods (Profitable: 435% return).
    Turbo (Profitable: 225% return).
    Peabody and Sherman (Profitable: 190% return).
    How to Train Your Dragon 2 (Profitable: 430% return).
    Penguins of Madagascar (Profitable: 220% return)*.

    *Penguins has only been released in China and North America so far, European run still to come.


    Are you just comparing production budget to box office returns to get those numbers? Because studios don't get all the money from the box office, and marketing costs add a ton on to the budget. Dreamworks definitely lost money on Peabody:

    http://www.washingtontimes.com/news/2014/apr/29/dreamworks-posts-1q-loss-on-peabody-write-off/
  • Kwramm
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    Kwramm interpolator
    ambershee wrote: »
    Absolutely reeks of corporate bullshit to move operations to China.

    I don't think anyone has mentioned that?
    They could probably, in the long term, move more to China.
    It's not cheap, but cheaper. One year ago they were still hiring for major positions, so I don't think they're ready yet to ramp up. Getting experienced people is still difficult in China, which may also be a problem. Giving up in the US right now, just to move operations, appears risky, if that's really the motivation (but I don't think so).
  • weee
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    weee polycounter lvl 3
    that's PDI, back in day it was as prominent as ILM, I still remember that advertisement in which a car morphs into a tiger, awesome memory and really opened my eyes to the cg field.
  • Jeff Parrott
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    Jeff Parrott polycounter lvl 19
    This completely stinks. The people there are super talented and I'm sure will go on to great things.

    As volatile as the games industry it's shocking to me how much more film/vfx is.
  • skyline5gtr
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    skyline5gtr polycounter lvl 11
    I bet the guys sitting at the top are doing just fine. Its always corporate greed. Its amazing to me how the leadership always get bonus and benefits when a product is successful yet when leadership fails they let the bottom go.

    The USA REALLY needs to address this overseas outsourcing crap
  • ambershee
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    ambershee polycounter lvl 17
    Meloncov wrote: »
    Are you just comparing production budget to box office returns to get those numbers? Because studios don't get all the money from the box office, and marketing costs add a ton on to the budget. Dreamworks definitely lost money on Peabody:

    http://www.washingtontimes.com/news/2014/apr/29/dreamworks-posts-1q-loss-on-peabody-write-off/

    Look up 'Hollywood Accounting'. Thanks to shady-as-fuck reporting practicies, just because a company posts a loss, doesn't mean they actually made a loss. This is also the same in the games industry, as it happens. Return of the Jedi "never made a profit", despite having earned $475 million at the box office (a staggering amount given it's real budget of around $33 million).

    Dreamworks never even came close to losing money on Peabody.

    FYI, I'm using total reported budget versus reported worldwide gross box office sales. Reported budget includes development, distribution and marketing overheads.
  • skyline5gtr
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    skyline5gtr polycounter lvl 11
    ambershee wrote: »
    Look up 'Hollywood Accounting'. Thanks to shady-as-fuck reporting practicies, just because a company posts a loss, doesn't mean they actually made a loss. This is also the same in the games industry, as it happens. Return of the Jedi "never made a profit", despite having earned $475 million at the box office (a staggering amount given it's real budget).

    Dreamworks never even came close to losing money on Peabody.

    Gotta keep the top guys in the billions
  • ambershee
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    ambershee polycounter lvl 17
    Found a beautiful example - My Big Fat Greek Wedding had a reported budget of $6 million. It made $350 million at the box office, but reported a loss of $20 million - how can you lose more than you spend?

    The LOTR trilogy claims to have made losses despite making $6 billion at the box office.

    In both of these cases, people entitled to profit based royalties were cheated out of them and got absolutely nothing.
  • Darth Tomi
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    Darth Tomi polycounter lvl 12
    Always thought Dreamworks was just an "also ran" to Disney, and the quality was a cut below. Had some potential but always went too commercial. The usual 1 dimensional characters, lame plots, fart jokes and mediocre pop songs. CGI filler for the kids. I always wanted to see a Pixar film, maybe a Disney, and DEFINITELY wanted to see Miyazaki, but Dreamworks? Meh.
    Good luck to everyone.
  • VelvetElvis
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    VelvetElvis polycounter lvl 12
    Harry Potter films are also considered to be unprofitable for the studios.

    Here's the receipt for Order of the Phoenix.
    https://www.techdirt.com/articles/20100708/02510310122.shtml

    "In that statement, you'll notice the "distribution fee" of $212 million dollars. That's basically Warner Bros. paying itself to make sure the movie "loses money.""

    A few other examples: http://en.wikipedia.org/wiki/Hollywood_accounting
  • HitmonInfinity
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    HitmonInfinity polycounter lvl 11
    If you want to know what's wrong with animated films in general look no further than Penguins of Madagascar, or even Illumination's Minions. When minor characters are more appealing than your main cast (enough to make entire movies out of), you know you're doing something wrong.

    Not to say that's what justified the layoffs. As others have noted, these movies are still profitable, but I still can't help but think they wasted their talent on sub-par films.
  • ambershee
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    ambershee polycounter lvl 17
    As a general rule, if you want to make good movies, only make a sequel when you have a compelling story to tell.

    If you want to make money, fart out sequels until people hate the franchise.
  • Blond
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    Blond polycounter lvl 9
    Hey thx for sharing this Dustin, it shows how greedy the Hollywood industry really is.

    Plus that doesnt includes the overpaid voice actors which salaries are worth ten times that of one animator..

    Capitalism for you..
  • littleclaude
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    littleclaude quad damage
    Interesting stuff but Ambershee have you got any valid source links with all those figures?
  • JacqueChoi
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    JacqueChoi polycounter
    Blond wrote: »
    Hey thx for sharing this Dustin, it shows how greedy the Hollywood industry really is.

    Plus that doesnt includes the overpaid voice actors which salaries are worth ten times that of one animator..

    Capitalism for you..


    $60-120k for 2 days of work.

    Quite easily 100x an animator.



    Huge difference is they are unionized and can collectively bargain.
  • Blond
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    Blond polycounter lvl 9
    See Jacques, that's the problem. If Cg artists ever decide to unionze themselves,, these copmpanies will simply shift their work to outsourcing...

    The moment we start to complain too much here, they will simply get themsevles some cheap labor from India or Korea...-_-
  • RyanB
    Blond wrote: »
    See Jacques, that's the problem. If Cg artists ever decide to unionze themselves,, these copmpanies will simply shift their work to outsourcing...

    The moment we start to complain too much here, they will simply get themsevles some cheap labor from India or Korea...-_-

    If your work can be sent over a wire and your skills can be easily replaced, of course they are going to choose the cheaper option.

    Alternatives:
    - don't be easily replaceable
    - use the system to make money independently
    - create things that can't be sent over a wire

    We are all doing project-based work. Layoffs will happen. Be prepared.
  • AdnenFX
    Sad to see this.

    But there must be / is a way to counter this. As much as we complain we are doing just that. Create worldwide union and go independent. We are those who create the content from script writers to all sorts of cg artist.

    Imagine, if we worked as one, we could be in way better position.
  • ambershee
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    ambershee polycounter lvl 17
    Interesting stuff but Ambershee have you got any valid source links with all those figures?

    Easy enough to track down. Dreamworks release all their numbers in their annual statements, which are available on their website.

    Real numbers for 'Hollywood Accounting' usually come out when there's a lawsuit; i.e. when someone has a profit based royalty contract, but never received a penny for it courtesy of the film 'making a loss' when it really didn't.

    Return of the Jedi never paid David Prowse (Darth Vader) for his work:
    http://www.theatlantic.com/business/archive/2011/09/how-hollywood-accounting-can-make-a-450-million-movie-unprofitable/245134/

    http://www.slashfilm.com/lucasfilm-tells-darth-vader-that-return-of-the-jedi-hasnt-made-a-profit/

    Tom Hanks and two other actors sue over not receiving a penny from My Big Fat Greek Wedding:
    http://articles.latimes.com/2007/aug/08/business/fi-hanks8

    Tolkien Estate sue New Line Cinema for the same:
    http://www.theguardian.com/film/2008/feb/12/lordoftherings.jrrtolkien

    You'll find loads of other references if you just search of 'FILM-TITLE-X Hollywood Accounting' - it's everywhere.

    My googling showed me some really sinister examples in here too:
    https://allthetropes.orain.org/wiki/Hollywood_Accounting


    Pretty much everyone working on these things except massive names are paid union minimum wage + profit based royalties. People working on $500 million+ smash hits are deliberately and systematically cheated out of their earnings. Hollywood Accounting doesn't even stop there - the MPAA claims that movie piracy is costing the US economy $200-250 billion a year, a number which is just as fabricated (think about it, that number is utterly impossible) as the loss statements on the movies themselves.

    The next time someone tells you that piracy is killing the film industry, the music industry, or even the games industry, ignore them. Greed is usually the thing putting people out of work.
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