Gadzooks! Cartoons Seem Everywhere : Boom Times in the Animation Business

This has been a very good year for Tony Moreno, a Woodland Hills free-lance writer of TV cartoons. He has earned more than $100,000 by grinding out 17 scripts for such kid shows as “Beetlejuice” and “Bobby’s World.”

Move over, Richie Rich. The animation business--dominated by a few San Fernando Valley-based studios and renowned for its feast or famine cycles--is healthier than it has been in years.

Once limited to Saturday mornings on the three networks, cartoons are spreading faster than a spilled ink pot.

The Fox network now runs animation on weekdays as well as Saturday morning. Disney has lashed together a consortium of stations to air a two-hour cartoon block in the afternoon. Ted Turner, who is negotiating to buy the famous Hanna-Barbera studio--creator of Fred Flintstone and George Jetson--hopes to launch an all-cartoon cable TV channel.

It’s quite a turnaround from the mid-1980s, when a slump in the animation industry meant Moreno was laid off from two studios in short order. “Basically, what I want now is a nice, long vacation,” he says.

The resurgence in TV animation, however, masks more fundamental economic changes in the business. The networks, once the sole purveyors of high-budget animation, are gradually taking a back seat to syndication and cable.

The syndication market now captures about half the advertising dollars spent on kids. Cable airs 60% of the programming. Saturday morning cartoons on ABC, CBS and NBC today attract less than 10% of the available audience, mostly kids age 2-11. In 1985, the three networks drew 17%.

“There are more choices for kids right now on Saturday morning than watching the networks,” explains Mark Young, senior vice president of animation at Hanna-Barbera. Home video, cable networks such as Nickelodeon and the Disney Channel, new competitor Fox and even Nintendo games all vie these days for kids’ attention.

NBC provides the most glaring example of how a network can lose its grip on what TV executives unabashedly refer to as “the kids business.”

From 1982 to 1988, NBC was the top-rated network on Saturday morning, thanks to “The Smurfs,” a cartoon inextricably linked to the marketing of the blue-skinned, troll-like toys.

As recently as 1986, NBC captured 44% of all network advertising targeted at children. But last year, its share fell to 29%. The network’s profits on Saturday morning cartoons took a nose-dive from $25 million in 1986 to $9 million in 1990. This year, NBC will lose money on Saturday mornings.

The result: NBC plans to radically cut back its cartoon schedule beginning next year--probably by at least half--and replace it with a Saturday edition of the “Today” show or other lower-cost programs produced by NBC News.

“We expect NBC to drop out of Saturday morning cartoons next year--and possibly another network too,” says Jamie Kellner, president of Fox Broadcasting Co.

“The networks used to be all things to all people, but more and more they are going to have to focus on specific groups,” Kellner explains. “And you can’t program any longer three to four hours for kids once a week when the rest of the week you are programming for adults.”

Most of Fox’s 126 affiliates, by contrast, already aired cartoon shows in the morning and afternoon before the network launched its own cartoon network last year. Although it could take Fox three years before its cartoons make money, Fox plans to cut its affiliates in on the profits when they materialize.

“Fox affiliates were the kids’ station in town,” Kellner notes, “so it was worth it to lose money for awhile to build the franchise.”

So competitive is the animation race between Fox and Disney that the two studios are locked in a bitter lawsuit. Disney charges that Fox “intimidated” Fox affiliates by threatening to drop them if they bought Disney’s cartoon shows. Fox counters that Disney had bullied the stations into not taking Fox cartoons.

The market for TV animation, in any event, is likely to continue growing, even if one or two networks scale back their Saturday-morning cartoon packages.

Thanks in large measure to the stunning success of Fox’s “The Simpsons,” all the other networks are planning to schedule cartoon programs in prime time, a move that hasn’t been tried since ABC aired “The Flintstones,” “The Jetsons” and “Top Cat” in the evenings back in the early 1960s.

In addition, the rise of Monday-through-Friday syndicated cartoon shows requires producers to order bigger batches of episodes from the studios than was traditionally the case. Rather than the networks’ typical orders of 13 episodes per season, Fox and Disney now are ordering as many as 65.

Networks have kept cartoon orders at such minimal levels because children, unlike adults, supposedly don’t mind watching the same episode six or seven times. Also, cartoons age very well--there’s a new audience every few years--making them an extremely cheap investment for the producer.

Unfortunately not everybody gets to share in the pot of gold.

Lured by relatively low production costs and lucrative profits, the major studios have squeezed out the smaller independents that until recently dominated the animation business.

“It’s a very grave situation,” worries Haim Saban, chairman of Saban Entertainment, an independent animation studio in Burbank that produces “Little Shop of Horrors” on Fox and “Adventures of the Little Mermaid” in syndication. “We have what has amounted to three major players in the business--Disney, Fox and Warners.”

Only a couple of years ago, the big players in animation were small, specialty studios such as Hanna-Barbera, Ruby-Spears Productions, Marvel Productions and the now defunct Filmation.

Big studios such as Disney and Warner Bros.--cartoon pioneers in the 1930s, ‘40s and ‘50s--all but gave up when Hanna-Barbera started producing low-cost animation for the networks in the 1960s. Hanna-Barbera, in turn, spawned a whole school of independent animators who went on to start their own production companies.

By the mid-1980s, TV animation was driven by toy-based concepts designed to sell products first and draw viewers second.

Yet at the same time, the success of animated movies such as Disney’s “Roger Rabbit” and Steven Speilberg’s “An American Tail” forced the major studios to reconsider the market for high-budget TV cartoons.

“It became apparent to Universal that Disney and Warners had regained a position in animation that (Universal) had allowed to run fallow,” concedes Jeff Segal, president of Universal Cartoon Studios, who is spearheading the MCA Inc. unit’s efforts to get back in the TV animation game.

Indeed, costs now are so high--$20 million to $30 million to produce one 65-episode cartoon series--that the independent animators are hard pressed to compete with the big studios.

“You will see some significant (shakeout) in the next year” among the independents, Segal predicts.

Nonetheless, for the big studios, the return on such an investment makes it worthwhile.

“It’s the only business that has ancillary, long-term profitability,” Saban explains. “You can’t make a lot of money from ‘L.A. Law’ T-shirts. But you can get rich from ‘Darkwing Duck’ T-shirts.”

The advertising and marketing establishment, targeting the nation’s 32 million youngsters ages 4 to 12, is behind much of the animation boom. Kids are a mother lode of purchasing power that marketers increasingly want to mine, says James McNeal, professor of marketing at Texas A&M; University in College Station, Tex.

“Children are reaching marketplace maturity at a younger age, because of the changing family structure,” McNeal explains.

The pressure to find outlets for kid-oriented advertising and to produce more cartoon shows to accommodate it may contribute to the fact that so much animation looks alike--and that so much has the same superhero, crime-buster themes.

“The marketplace has gotten so competitive that in order to get the audience to watch, we have to have something with a pre-sold quality,” says Jennie Trias, vice president of children’s programming at ABC Entertainment.

“Pre-sold”--a term programming executives invoke without qualm--means that kids are already familiar with the cartoon’s characters, whether they are based on a pop star (“Hammerman”) or a movie (“Beetlejuice”).

“Everybody is afraid to try something different,” allows Margaret Loesch, president of Fox Children’s Network.

Still, TV cartoon writer Earl Kress thinks the current good times may actually be setting the stage for a glut of programs and writers. He notes that Disney and Warner Bros. could stop producing new episodes now and just sell reruns for the next several years.

“It’s highly cyclical, and can peter out again,” he frets. “That happened before.”

Kids TV Advertising

Syndicated programming represents the fastest-growing segment of the children’s TV advertising market. In 1986, syndication accounted for only about one out of every three dollars spent in TV, but today is half the market. Figures do not include advertising on children’s programs on cable TV, which in 1991 is expected to reach about $100 million.

Saturday Morning Network Ratings

ABC, CBS and NBC have seen their share of audience decline to about 10% from 17% on Saturday morning.