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Is the curtain falling on animation?

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PHOENIX — A U-Haul truck, back door gaping, was parked on the circular drive facing the roar of lunchtime traffic on Camelback Road. Inside, Gary Goldman and a few helpers were sorting through what was left of Fox Animation Studios: 40 cardboard boxes. Don Bluth, the studio's creative force, had packed up his office the week before and was long gone.

A 5-foot-high Lego-block statue of Bartok, the bat in "Anastasia," the studio's first major animated feature, still sat in the lobby beside some posters from "Titan A.E.," its most recent and final animated film. In the nearly empty underground garage, rows of chairs were clustered in groups — swivels to the left, tall-backed rockers in the middle, blond-wood reception chairs to the right — like prisoners sorted for transport.

"Animation isn't dead, not by a long shot," Goldman said. "And neither are we."

It may not be dead, but some are wondering whether animation's pulse — at least that of the traditional, two-dimensional variety made by anyone other than Disney — might be fading. This downturn perhaps signals an end to a costly five-year cycle in which several major movie studios built their own traditional animation divisions in an attempt to steal a bit of Disney's thunder.

When 20th Century Fox announced that it was closing its Phoenix-based animation studios — about a week after the abysmal mid-June opening of "Titan" and just three days after the studio chief, Bill Mechanic, announced his hasty resignation — Fox executives said they were convinced that the immediate future, at least as far as their studio was concerned, was in three-dimensional, computer-generated animation.

Audiences, they argued, were demanding up-to-the-minute digital magic and shying away from the traditional animation they remembered, unless the name Disney was attached.

Fox is not alone in its new, cautious stance toward traditional animation: Warner Brothers, which also had its problems with feature animation, has slowed its efforts, while Paramount has largely been content with more inexpensive animation based on well-known brands like "Rugrats" and "South Park." Only DreamWorks remains gung-ho.

Chris Meledandri, president of Fox Animation, said the company was closing the traditional animation studio that Bluth and Goldman had opened for it in August 1994, laying off the six dozen people left in the three-story office building here. Fox was transferring its future animation hopes to White Plains, N.Y., where Blue Sky Studios, which it partly owns, is now producing newfangled computer-generated films along the lines of Pixar's "Toy Story."

"Computer-generated animation, it's the flavor of the month," Bluth, a legendary animator credited with helping spur the renaissance in feature-film animation over the last 15 years, said over lunch in a trattoria near his shuttered studio. "I will never draw another character and give the rights to someone else. And I think that pretty much puts me out of the movie business."

Perhaps this is the tail end of a cycle of interest in traditional animation, Bluth said. Interest has always been cyclical, even in Walt Disney's heyday. "It's a trend thing," he said. "People get tired of looking at the same old thing."

Traditional animation, pioneered by Disney and others in the 1920s and '30s, involves putting pencil to paper and making a series of drawings, each slightly different from the one before, that, when photographed and then projected at 24 shots per second, give the illusion that the drawn figures are alive. Although techniques changed over the years to include more multilayered cels that allowed different artists to create characters and backgrounds, the concept remained basically the same and resulted in decidedly two-dimensional images that were often richly textured but looked like what they were: paintings on flat surfaces.

Computer-generated animation, in which the figures are created out of pure computer code, begins with virtual skeletons overlaid with some sort of skin and texture. Adding virtual lighting sources can give the resulting figures a sense of solidity and the scene the aura of a three-dimensional universe.

After costly missteps with "Quest for Camelot" (1998), "The King and I" (1999) and "The Iron Giant" (1999), Warner Brothers has eased off on its large-scale, in-house animation. Currently Warner is offering "Pokemon the Movie 2000," a relatively cheap animated film capitalizing on the popular children's television series and its related games and toys. Even Fox might be tempted to get back into traditional animation if a project grew out of its television division and could be made cheaply, Meledandri said.

"But otherwise our focus right now is really reflected by the pictures we are currently working on, which are either computer-animated or some form of mixed media," he said. Only DreamWorks, it seems, continues determinedly in efforts to match Disney in traditional animated fare, despite the lackluster box-office performance of "The Road to El Dorado," its most recent traditionally animated feature.

"I actually think the appetite for traditional animation is greater these days," said Ann Daly, head of animation for DreamWorks. "What's happened, though, is that animated movies have become more numerous, so people have become more discriminating and discerning about what they like."

DreamWorks has several traditionally animated features in the works, and is also forging ahead with computer-generated fare from PDI, the company that made "Antz," beginning with a troll-meets-princess tale called "Shrek," set for release next summer. And the studio has a multi-picture deal with Aardman, a British animation house that uses stop-motion techniques in which actual physical models are manipulated one frame at a time, a method that resulted in this summer's hit "Chicken Run."

Disney, of course, has never let up.

"It's very difficult to speculate about the future," said Peter Schneider, chairman of Walt Disney Studios. "What I do know is that whether they're animated traditionally or on a computer, good movies will find their place in the marketplace. I do think that the market does go through this ebb and flow, where people are more excited about certain kinds of movies or less excited about them, and there is always a correction in the marketplace when things get too expensive."

Bluth was a veteran at Disney in 1979 when he decided that animation at the studio had grown moribund and that he needed to strike out on his own. Goldman left Disney with him. In 1982 they released "The Secret of N.I.M.H.," a somewhat dark and highly regarded animated feature about animals escaping from a research lab; this attracted the attention of Steven Spielberg, with whom they worked on "An American Tail" (1986), about Fievel, an immigrant mouse, and "The Land Before Time" (1988), about dinosaurs in search of literally greener pastures.

During the '80s Bluth and his partners led a resurgence in feature-film animation, while Disney remained fairly dormant. But that changed in 1989 when Disney released "The Little Mermaid," the first of its new generation of re-energized animated features that eventually produced huge hits like "Beauty and the Beast" and led Disney to reassert its dominance in feature animation in the '90s. In particular the enormous success of "The Lion King" in 1994 — the film made more than $300 million — inspired other major Hollywood studios to build their own animation divisions and try to compete for what appeared to be a growing and enormously lucrative family market.

By the early '90s Bluth had transferred his operations to Ireland, where he felt it was easier to keep costs down and compete more effectively with Disney's deeper pockets. But financial problems with his partners at the time coincided with an offer from Fox to move back to the United States in 1994 and set up a new animation studio.

"They wanted us to move to Los Angeles, but we said no, that was a deal breaker, so we eventually settled on Phoenix, which was close enough to satisfy them and far enough from Los Angeles to satisfy us," Goldman said.

Those were heady times. Warner Brothers also set up an animation division, and Jeffrey Katzenberg left Disney and, with David Geffen and Spielberg as partners, set up the new DreamWorks studio, vowing to compete with Disney in feature-film animation. Experienced animators found themselves the targets of bidding wars. "Suddenly, animators who had been making $1,000 a week were being offered $4,000, $5,000, even $6,000 a week," Goldman said. "Everybody got an agent."

Fox leased 66,000 square feet of office space in a prime corner of northeast Phoenix. DreamWorks built a beautiful new animation campus in Glendale, Calif.

The problem was, the resulting movies were not coming anywhere close to ending Disney's dominance. Only DreamWorks' "Prince of Egypt" earned more than $100 million. Most came and went with barely a ripple, while Disney kept pumping out blockbusters. For Fox the final straw was this summer's "Titan," an $85 million production that was calculated to appeal to teen-agers, who are normally averse to animated fare. But they stayed away, and the movie quickly sank at the box office.

About six months ago, soon after the spectacular success of Pixar's "Toy Story 2," a computer-animated feature, Bluth said, Fox officials came to Phoenix and told the studio to cut back on staff as soon as "Titan" was finished. The studio went from a high of 362 employees to a core crew of 70 or so. Some of those remaining hoped that Fox would continue to make animated features, but Bluth and Goldman said it became increasingly obvious that their studio would never make another movie.

In the end, they said, Fox officials flew to Phoenix and announced that the studio was closing and that everyone left on the staff had three hours to pack up and get out.

The first group of animators who left the Phoenix studio late last year had fairly good luck landing jobs, Bluth said. "The ones it was hardest on was the last 70," he said, "because they died a hard death."

Bluth and Goldman said they hoped to get involved in animation for the World Wide Web, some of it along the lines of the popular "Dragon's Lair" computer game they created a decade ago and some of it animated stories, both short and feature length. Perhaps, they said, by distributing their work directly over the Internet, they would be able to bypass the Hollywood studios.

"Unless you're in the distribution business, you're not in the movie business," Bluth said. "We learned that the hard way."