Comcast's NBCUniversal buys DreamWorks Animation in $3.8B deal
latimes.com
latimes.com
This is basically a wholesale buyout of DreamWorks IP which will be given to Illumination to turn into more Minions movies.
[1] https://en.wikipedia.org/wiki/DreamWorks_Animation#Feature_f...
This is hollywood. Take the budget, double it, and add 50 million dollars and then you have an accurate idea of the true budget. To be "profitable" the reported boxoffice needs to be at least 3X the budget. For example, Sherman and Mr.Peabody had a budget of "150 million", made 300 million, but dreamworks still lost 57 million making the movie.
Known flops of the last two years are : Home, Penguins of Madagascar, Sherman and Mr. Peabody, Turbo, Rise of the Guardians.
Only The Croods and HTTYD were profitable.
Plus DVD rights, streaming, and broadcast rights do bring in some extra money too.
Link with an itemized, Hollywood Accounting-style breakdown:
https://www.techdirt.com/articles/20100708/02510310122.shtml
If I have to explain myself to IRS why I bought 1TB drive instead of 500GB because in their opinion I did not have enough to backup, hence supposedly I attempted to defraud IRS on extra $6.00 of tax, why can they get away with hundreds of millions or even few billions?
Hollywood executives swerved away from the dog, having watched enough movies to know that's how villains get made.
And to be honest, I'm not sure if the IRS cares since the profit gets taxed at some point in time.
One of the things that saddens me most about this deal is that there are likely many talented artists and engineers down in Glendale who will be let go as a result of this consolidation. I would love to be proven wrong, but that is my hunch.
In addition, I get the impression that Comcast is interested in owning already existing IP more than nurturing the Dreamworks Animation team to generate NEW stories and content. If that is the case, it seems short sighted.
Sold at >50% premium to Tuesday's close of its publicly-traded stock price. This is not "wholesale." And the human assets remain very much a key part of the company's value and values.
And for less than half of what disney paid for pixar, despite having made more movies.
>And the human assets remain very much a key part of the company's value and values.
Illumination, who is taking the reigns, is the costco of animation. In the entire United States Illumination has 35 employees.
If you don't think there is a bloodbath coming, then I have a bridge to sell you.
Are... Are you trolling me?
Dreamworks has already undergone several rounds of layoffs recently. http://bit.ly/1uzveR9
Animation/VFX is already heavily outsourced, and it's not getting better. Dreamworks has already said they are outsourcing future work to canada. http://bit.ly/1P8FKX8
Illumination already outsources all their work to other countries (France in particular). Government subsidies from non-US countries has already gutted US VFX/animation, and pretty much ensures nothing but executive level positions remain at big studios.
There is zero US job security, and those going into the industry only have three guarantee's : long hours, low pay, and frequent moves to keep steady work.
Tweening some crap Panda movie in Canada doesn't mean they laid off the entire city of Glendale.
"Nothing but executive level positions remain at big studios" -- Really? This is the cherry atop your preposterous, cherry-picked rant. Thousands of amazing animators bleed in the 91xxx zip codes daily.
EDIT: tons of open job listings (search various sub-categories like 'Animator' if this is too broad for you). http://www.indeed.com/q-Animation-l-Burbank,-CA-jobs.html
EDIT #2: http://www.indeed.com/jobs?q=Animator&l=Burbank%2C+CA
Those aren't exactly dying steel town numbers.
>Thousands of amazing animators bleed in the 91xxx zip codes daily.
You're right. They're bleeding because they can't find a steady job that pays them a living wage.
There can only be so many small boutique studios before the market is saturated, and I expect we are already there. We're at a point that even the best animators the US can produce struggle to find reliable employment. It's a goddamn shame.
I know lots of great animators at ILM and Pixar who are doing very well for themselves.
(such a rule would obviously need some mechanism to see through obfuscating ownership structures)
The premise is that rather than building up content in order to benefit their customers, they are building up content because they can leverage it to extract rent.
The ISP? Yeah, sure whatever. Not on the table right now, though. We're talking about NBCUniversal's content library.
This is basically saying the US government should take over the movie making business. Why?
Requiring divestiture is a frequent thing in mergers, it is not nationalization.
Edit: autocorrect fail
Property rights don't vaporize just because you do an IPO. By current law Comcast is not in fact a utility - they offer a utility product that is regulated by the FCC, there's a critical difference between those two concepts.
The point is to enjoin the cable company from leveraging content to make competitive offerings less attractive.
I just don't want a corporate entity that owns an ISP to be allowed to own content production companies. You're riding a ballistic missile (rather than making a leap) to get to me wanting to get content without paying for it.
It makes zero sense for the US government to get involved in this deal.
We live in a business first world. I want to live in a business, maybe? world.
I don't really buy the story that an ever bigger Comcast does the public in general any good at all (there would be plenty of investment in the cable space if there were 20 companies operating). The basic premise of a corporation is that it is beneficial to afford the shareholders some extra protection to encourage investment, so I'm fine drawing lines that I don't think will hurt investment but will probably benefit or protect the public.
I'm certainly talking about restricting what we allow privileged capital structures to do.
You're forcing a company's investments into the public's hands.
So what if you can't watch Two Broke Girls if you don't have Comcast? Two Broke Girls is not critical for a happy, fulfilling life.
Nor should Comcast be able to produce Two Broke Girls (actually I think that's CBS but whatever) in an environment where they are protected from competition. But they are. That's what the OP is getting at - Comcast makes money from the privileged position. Nothing to do with the programming on that channel.
Protected from competition? Are you kidding me?
This has nothing to do with your personal entertainment, and everything to do with monopoly over regional infrastructure.
You're worried they'll lock DreamWorks/Universal films/NBC TV shows to Comcast customers only, because of their position as an ISP. We can agree, that's bad, if they do that, and if they do end up trying that, then I understand action (with some caveats, I am in favor of net neutrality, but I think there's a balance between what the government helped them build and what they built themselves).
But they haven't done that yet. As long as they don't do it, I think regulation is premature.
You're basically ripping out the budget from the hands of producers and directors, for absolutely no reason. People are willing to pay, it's a completely optional resource that impacts in no way the quality of one's overall health, why the hell would we regulate something like this? Not seeing a movie/TV show is just not a big deal, certainly not a big enough deal to have the US government force content producers to share their IP...
Not only does satellite exist, but now virtual cable companies already exist. Sling and PS vue offer full blown cable over the internet. Netflix, Amazon, Google, Apple, Hulu etc. offer most tv content streamed over the internet.
Google and Apple have much bigger control over our media content consumption than Comcast does. Apple extorts 30% from all media sold to me on a phone I bought. It's bullshit. Google uses it's actual search monopoly to weasel it's way into other markets.
>they are building up content because they can leverage it to extract rent.
Isn't that why all content is made?
I do think it would be useful to have a pay per stream statutory royalty rate like we do for radio music. Set it at say, 3 dollars per hour long episode, 2 dollars for a half hour. OR even just require all content have a reasonable MSRP rate so that any serious streaming company can sell it easily.
I think encouraging business activity is great. We should be careful when we regulate it. The other side of that is that we shouldn't hesitate to regulate businesses when they try to do things that do net harm to the public.
At the very least, we need to break Comcast into content producer and content distributor (ISP).
Sure, we should break up Apple into software and hardware, maybe even content too. And google into search and service.
Vertical monopoly is just another world for efficient.
As for Google, there are arguments to be made that, sure, they should be broken up so their search is separate. (Maybe Alphabet was a preemption?)
People will often explain this away by saying "Well, people are paying for it, so they de-facto deserve it." But these people neglect that our legal structures created this market and necessitated that people pay. There is no natural right to intellectual property. Naturally, intellectual content cannot be protected or maintained; naturally, intellectual information is possessed in equal part by all who observe or perceive it insofar as their memory and/or recording device allows, and all are free to share this as they see fit. IP is inexhaustible, an infinitely renewable resource. It is not a physical chunk of land that you can wall off and guard.
Thus, any "ownership" of IP is purely based in the legal grants we've given. And IMO, if you look at the disproportionate amount of wealth that goes to IP holders as compared to their social value, our laws need to be recalibrated. There's no reason that a cartoon mouse should continue to print money for a company 50+ years after its original author died. That doesn't encourage innovation.
I have no problem, though, with makers of cartoon animals making bunches of money. They provide happiness. I'm glad I live in a day and age where it isn't just the people who can make the best weapons that do well for themselves.
I'm sure there are more "noble" pursuits, but....how many people actually participate in them? Most people seem to just move money from one place to another, while grabbing a bit for themselves in the process.
For what it is worth, though, the cartoon animals that bring the most joy into my family are those on the cartoon Peppa Pig (I have a two year old daughter, but I find that I enjoy it myself, albeit on a somewhat different level). I hear the people who make it are making a killing, and rightfully so, in my opinion.
I kept bringing up cartoon animals as a form of rhetorical trivialization, but it's actually larger than any specific instance. The issue is the obscenely disproportionate value we've artificially assigned these supposedly-time-limited monopolies, which, in practice, never actually expire, and the consequences that flow out from that, like massive political and social influence. Media companies are among the world's largest companies not because of an organic or inherent value in the product they sell, but because we've decided to structure IP laws such that a nearly-infinitely renewable resource, a resource whose upkeep and maintenance costs are as close to zero as you'll ever get, is allowed to be guarded with hyper-protective legal sanctuaries that make it criminal not only to compete directly, but practically to test, study, or develop the subject.
The issue is not that someone is making money off of things that are trivial. The issue is that we've made it way too easy for them to become a dominant force upon completely baseless pretenses.
Law regarding physical property mimics and formalizes the natural consequences that you would expect in the real world -- it formalizes conventional human behavior and expectations, which is why it works as part of the framework that allow us to live in a cohesive nation instead of insulated tribes. It makes sense how laws regarding physical property came into existence and how they relate to basic human impulses. Most people obey the law regarding physical property.
IP law, on the other hand, has no fixed corollary or reference point (since, as above, intellectual resources are naturally un-ownable) and is non-intuitive. IP law is widely and flagrantly disregarded by most people, many of whom don't even understand they're doing something illegal every time they right-click and save-as a picture of Mickey Mouse, listen to an album on YouTube, or use commercial music in the background at an important event; our IP laws do not comport with a basic sense of fairness.
This is manifest when someone says "Why do we care so much what [$FILM_AND/OR_MUSIC_SENSATION] thinks about [$IMPORTANT_SUBJECT_X]?" or any of the many variations of that which people say.
The public understands intuitively that the IP cartels are not deserving of their social position, but they don't make the connection that their position is secured not by any goods that are intrinsically valuable, but solely by the artificial value that we've assigned to them via the fabrication of IP law.
Let me reiterate that I'm not opposed to copyright as such. I am opposed to the grossly disproportionate influence we allow media entities and rightsholders to wield over our politics and our culture, courtesy of excessively one-sided copyright and intellectual property laws.
We need to fix it. For starters, we should knock the copyright term down to 10-15 years.
My kids also love Peppa Pig and I'm also glad that their creators are making money.
Those are all massive media companies, we very clearly do not just have two. Apple is by far the world's largest media company. Amazon is a $300 billion, hyper aggressive corporation that is doing everything it can to become a big player in content. Amazon even has its own infrastructure play in AWS, which is responsible for delivering all of that content (ten years from now, will people be arguing AWS is a utility as it becomes as big as a major cable company?). Netflix is a fast growing $40 billion corporation.
AT&T and Verizon are as much media companies these days as Comcast is. Verizon purchased AOL and would seemingly like to buy Yahoo. Both AT&T and Verizon are as big and powerful as Comcast is.
Even Google continues to push further into that field. After all, how are they not partially a media / content company, given they control the world's most used app store (reaching a billion people), and have competing products in content delivery (video, music). Google even has a direct competitor to Comcast in Google Fiber.
Interesting point.
Judge, jury, and executioner?