CG animation drives doubling of animation box office in past decade

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In the American theatrical market, total box-office takings for animated films showed a notable increase of 89.5 percent from 2001 to 2011, climbing to $1.1 billion, up from $559.7 million. In comparison, the annual box office for live-action films rose by just 28.5 percent during the same period, from $5.2 billion to $6.7 billion. CG spurs creative explosion ?A new level of creative genius was unleashed with the advent of CG animation, beginning with ?Toy Story? in 1995, followed by ?Antz? in 1998, ?A Bug?s Life? in 1998, and ?Toy Story 2? in 1999,? said Jan Saxton, senior analyst for film entertainment at IHS. ?CG?s more lifelike, three-dimensional rendering sparked the imagination of writers and directors to create stories with more sophisticated ? and slightly twisted ? humor, like ?Shrek.? Arriving in theaters in May 2001, ?Shrek? signaled the coming of age of the CG-animated feature, with its distinctly non-traditional story and characters designed to appeal to both children and adults.? ?Shrek? went on to earn $263 million in box office and then delivered $354 million more in gross video revenue. Prior to ?Shrek,? movie studios had been producing successful traditionally animated films for the children?s market, like ?The Lion King? and ?The Little Mermaid,? but from that point forward the new CG-animated films would dominate both in theaters and on video. CG?s effect on video more modest, but still impressive Compared to the blockbuster performance of animated features? theatrical revenue in the last decade, their share of the US home video market has followed a slightly downward trend. Animated features went from generating a high of 23.4 percent of total initial gross video revenue from feature films in 1996 to just 15.5 percent in 2011. That?s because prior to DVD?s launch, in the VCR and VHS era, animated movies were almost invariably priced for direct sales to consumers and so generated a disproportionately high share of home-video revenue. At the time, most live-action films were priced for the rental market at suggested retail prices around $100. The DVD format introduced retail pricing around $25 on all new-release films, driving huge retail sales growth in the live-action market, which affected animation?s share. CG slips into live-action films The real impact of computer animation technologies is even more profound when one considers live-action movies that incorporate CG animation. Even in the declining market for home video as a whole, the share of video revenue from live-action films enhanced by CG animation rose from 22.2 percent to 37.1 percent between 2001 and 2011. Animated features and live-action films with computer-animated effects together delivered more than half of all new-release theatrical and video revenue for major theatrical films in 2011 ? 52.2 percent of theatrical rentals and 55.3 percent of new-release initial-video revenue, up from 29.8 percent and 39.1 percent, respectively, in 2001. Still, to evaluate the importance of animation in today?s film industry, the expense of CGI has to be balanced against the value that computer animation adds to live-action films, as well as the appeal that purely computer-animated features offer to broader audiences in theaters and on video alike. Computer animation is not cheap, and CGI or animation costs must be taken into consideration, especially with physical video retail sales ? a major driver of studio profits ? mired in general decline. ]]>

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