The TV Animation Business Part 2 The TV Animation Business Part 2

How Multinational Corporations Thrive

As I mentioned in the last installment, the paradox of the TV business is that the increasing number of channels leads to a decrease in viewers for any one channel. Fewer viewers mean less income. There are strategies for getting around this problem and this installment will talk about how the multinationals – companies like Disney, Time-Warner, Viacom, etc. – deal with it.

One way large companies increase the amount of money they make is by vertical integration. A single company owns production, distribution and exhibition. Disney has the ability to create a show, distribute it and air it on TV. By buying from itself, Disney makes sure that money that it spends stays inside the company. Any profit generated by a show also stays within the company.

But how do Disney, Time-Warner or Viacom compensate for the shrinking size of their audience? They do it by putting their shows on more channels. All of these companies own more than one channel in North America. In addition, these multinationals own channels in other countries as well. There are Disney channels in Europe. There’s a Cartoon Network in South America. There are versions of Nickelodeon in several countries. If you can place your show on enough channels that you own, you can find an audience big enough to make a profit.

Animation travels better than live action. TV regularly takes shows from other countries and remakes them. All in the Family was based on a British TV series. Survivor now has different versions running in several countries. That’s not the case for Spongebob Squarepants. While he’s dubbed, the same episodes are shown all over the planet.

Economically, this model works great. From a creator’s or a viewer’s standpoint, it doesn’t work as well.

Large companies want to own things outright. If you pitch a show to a Disney or a Viacom and they’re interested, they’ll end up owning it. You’re free to try and negotiate your best financial deal, but the copyright will go to them. I don’t know Genndy Tartakovsky’s deal on Samurai Jack, but if Time-Warner decides that they want to team Samurai Jack up with Yogi Bear, there’s nothing that Tartakovsky can do about it. In the worst case scenario, a creator can be fired from his own show. This is what Nickelodeon did to John Kricfalusi on Ren and Stimpy.

The fact that shows appear on more than one channel effectively reduces the variety that the 500 channel universe was supposed to provide. What good are more channels if the bulk of them are running shows you can see elsewhere?

Another problem is that companies prefer to make shows from properties they already own. It’s easier to sell the audience something they’re familiar with than something new. I’m losing count of how many animated versions of Batman there are. I don’t doubt that as long as Time-Warner owns Batman, there will be new Batman cartoons. As good as they might be, the airtime taken up by Batman is airtime that won’t be available for something new. That limits the opportunities available to creators and limits the variety available to viewers.

But the multinationals aren’t the only ones producing TV animation. Next time, I’ll look at how smaller companies deal with the economics of TV.

Jerry Beck

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