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Streaming Boom Boosts Global Toons

With the announcement that it’s planning an Oscar-qualifying theatrical run later this year for its first original animated feature, “Klaus,” Netflix fired a shot across the bows of rival studios. Just as Alfonso Cuaron’s “Roma,” which netted the streamer a trio of Academy Awards, raised the ante for streaming services in the live-action realm, the company’s feature animation ambitions have executives from DreamWorks Animation to the Mouse House taking note.

Netflix is developing an ambitious slate of animated features and series, while also beefing up its in-house animation studio. Amazon and Hulu, meanwhile, have both ramped up their acquisition and production of animated content, while other soon-to-launch OTT services — including Disney+ — are expected to fuel the toon boom.

The competition among content-hungry streamers has sparked a gold rush for producers and independent studios. What remains to be seen is how the rash of digital disrupters will transform the way animation has traditionally been produced, sold and distributed worldwide.

“Like a lot of other distributors, and like producers and sales agents and everyone else, we’re grappling with what feels like a big moment of change,” says Dave Jesteadt, president of indie distributor GKids. “I think everyone is still waiting to see how that all shakes out.”

Netflix has unveiled a dizzying slate of auteur-driven animated features in recent months. Along with “Klaus,” which is directed by “Despicable Me” creator Sergio Pablos, the streamer will release Guillermo del Toro’s stop-motion “Pinocchio,” as well as films from the likes of Oscar-winner Chris Williams (“Big Hero 6”) and Disney legend Glen Keane (“The Little Mermaid”). A string of new animated series are also in the cards, and other video-on-demand services are following suit, with both Amazon and Hulu ordering series from top talents to keep pace.

If streamers are opening their checkbooks in the hopes of spawning the next billion-dollar franchise, like “Family Guy” or “The Simpsons,” independent animation studios are reaping the benefits. “On the creative side, these direct-to-series orders are amazing,” says Chris Prynoski, founder and owner of Titmouse, which includes Netflix’s “Big Mouth” in its portfolio. “That’s a great advantage … because we skip the pilot stage and get shows into production faster.”

A series order from the likes of Netflix or Amazon will typically dwarf the more cautious commitments of broadcasters, with streaming services commissioning season upon season in one fell swoop. Budgets and production values are on the rise. So, too, is the pressure to keep pace with the restless appetites of an on-demand world.

“The downside is that we don’t get to work out issues we might run into by doing a pilot,” Prynoski says. “Any hiccups — both creative and production — have to be dealt with under the pressure of a series delivery schedule.”

In the hyper-competitive world of streaming services, animation has unique upsides. Easily dubbed, ready to be binged in bite-sized chunks, and often telling evergreen stories that transcend cultural boundaries, it’s the perfect weapon in a battle for SVOD subscribers that’s increasingly being fought on foreign turf.

The arms race is likely to heat up further as new players like Disney and WarnerMedia enter the arena, though it’s still unclear how those companies will be acquiring titles and building their animation slates. Adding to the uncertainty are plans by Netflix and rival studios to develop more content in-house.

“It’s increasingly hard to get broadcast TV deals for independent or global animation, and so really the streamers have become the de facto TV window for a lot of these titles,” Jesteadt says. “Now that the platforms themselves are so all-in on creating their own content … there’s more uncertainty than ever in terms of where you’re going to take a film in that window.”

Even as it builds up its in-house team, adding former Disney and DreamWorks Animation heavyweight James Baxter to its animation division, Netflix continues to sign deals with award-winning houses like Ireland’s Cartoon Saloon and Spain’s Sergio Pablos Animation.

“We will always have a real robust relationship with independent creators all over the world, whether those are licensed relationships, or Netflix-owned shows,” Melissa Cobb, Netflix’s VP of original animation, says.

Those relationships extend to sales agents and third-party distributors, who can perform a lot of the heavy lifting required for the global rollouts Netflix prefers.

“They’re able to consolidate a lot of rights and bring them to us, versus so much piecemeal work,” Cobb says.

They also bring a special skillset to the table. Though streaming services have traditionally cast a wide net when building their libraries, there’s still a role for third-party distributors who put particular thought and care into curating content, especially from independent and foreign studios.

“We’re just trying to figure out the best way to get great content, and there’s so many ways of doing that,” Cobb says.

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