If there’s one lesson to be learned from the success and subsequent Disney buyout of Pixar, it’s that computer generated feature film production is a very lucrative business. Major studios are willing literally to pay billions upon billions of dollars to gain a foothold in the highly competitive market.
If you could go back in time to the year 2007, you’d discover that many of these realities weren’t lost upon then President of Animation at 20th Century Fox, Chris Meledandri. It is rumored that after having served as executive producer of the first two Ice Age films, Robots and Horton Hears a Who!, it was the international box-office performance of 2006's Ice Age: The Meltdown that got Chris Meledandri reevaluating the potential of the market.
Ice Age: The Meltdown did fairly well domestically, having grossed $195.3 million at the box office (compared to $176.4 million for the 2002 original), but what had changed in the four years separating the two films was the global market. The original took in $206.9 million on the global stage and the next one more than doubled that figure at $465.6 million. This CG film thing wasn’t just a local phenomenon; the entire world was taking note and showing support of the new art form with their wallets.
Big Business, Little Yellow Pills
It was about this same time Universal Pictures began calling. While the company had successfully teamed up with several studios prior to distribute and release CG titles of varying success, the Hollywood juggernaut wanted a product they could call their own. The deal that would be worked out between Universal and Meledandri was considered mutually beneficial to both parties in that Meledandri’s #IlluminationEntertainment would retain creative control over its films but Universal would hold the rights to exclusive distribution. Additionally, Universal would be responsible for financing the production of said films; an arrangement designed around a release schedule of one to two films per year from 2010 onward.
Those early years were a gamble, as Illumination Entertainment had yet to produce anything tangible. Their debut project — a comedic view into the life of super-villainy starring Steve Carell — even had the coincidental misfortune of competing with industry giant #DreamWorks, whose Megamind told a remarkably similar story.
Even still, Illumination’s Despicable Me would not be denied. 2010, the year of both films’ releases, witnessed Megamind turn a budget of $130 million into $321.8 million at the box office. Newcomer Despicable Me wouldn’t only make more than the competition, it would do so for less initial studio investment; turning a budget of only $69 million into an astounding $543.1 million. Just like that, Illumination Entertainment was a force to be reckoned with in the CG animated feature film industry and Universal Pictures had cemented its place in the hierarchy as well.
A good deal of the runaway success of that first film is attributed to the sociological impact of the small, yellow capsule-like Minions who made up leading character Gru’s workforce. Taking a chapter from the Disney merchandising machine, suddenly Illumination’s creations could be found everywhere, from backpacks, folders, clothing, even breakfast-food franchise iHop was quick to integrate the #Minions into a promotional run to coincide with the film’s theatrical run.
The stage had been set, but the big question then became whether or not Illumination Entertainment would be able to follow up with the type of success they had with Despicable Me. Pundits were quick to accuse the new company of capitalizing on beginner’s luck, asserting that that success of Despicable Me was merely a fluke.
From Fluke To Full Swing
The company’s second feature film, 2011’s Hop, veered a bit from the formula of their first by integrating live-action with computer-generated characters. It bears the distinction of being Illumination’s lowest-grossing film to date, having taken in $184 million at the box office. Considering it was produced on a budget of $63 million, this too proved a lucrative endeavor for all involved yet again.
From there the Illumination profit machine was in full swing. The following year (2012), the company released its colorful rendition of the classic Dr. Seuss’ The Lorax, which took its budget of $70 million and turned that into $348.8 million at the box office. The year after that they returned to their roots by offering up a direct sequel to Despicable Me. Despicable Me 2 trounced even its predecessor, turning a budget of $76 million into $970.8 million and turning Minion-mania up a notch in the process.
If there were any doubts of the marketability of the little yellow guys after that one, Illumination put it to rest in their next film, 2015’s Minions. It served as a prequel to the pair of Despicable Me films while finally giving fans a heavy dose of the fruit-loving, gibberish-talking genetic experiments in coveralls. Minions would prove to be the company’s biggest hit to date, turning a budget of $74 million into a staggering $1.159 billion.
Showing no signs of slowing, 2016 witnessed the release of a pair of features The Secret Life of Pets ($75 million budget/ $875.5 million gross) and a sort of digital animalized version of American Idol called Sing ($75 million budget/ $531.1 million gross).
Proving beyond a shadow of a doubt that their initial success was no fluke, the attention then turned to one of the areas of Illumination’s strategy that none of their competition could seem to compete with: the abnormally low cost of production. To provide an example, the highest budget Illumination production to date was the second Despicable Me at $76 million. The average Pixar budget (including their most recent feature film, Finding Dory) is nearly three-times that amount at $200 million.
"The cost of an animated film really comes down to man hours,” Meledandri told Hollywood Reporter. “If you gather together world-class talent, then the question becomes how do you deploy that talent in a way that minimizes waste."
How To Make Animation Profitable
A good deal of that waste minimization is attributed to Universal Pictures having purchased and absorbed the French animation house responsible for the first Despicable Me in 2011 — Mac Guff Line — which was then renamed Illumination Mac Guff. Keeping all of its efforts in-house has been instrumental to the company’s ability to keep costs down.
This has immediately triggered widespread speculation that Universal would wish to position Meledandri to oversee DreamWorks in addition to Illumination.
Where things begin to get interesting, however, is when one stops to consider Universal Pictures’ parent company, NBCUniversal’s (through Comcast) $3.8 billion acquisition of DreamWorks Animation. This has immediately triggered widespread speculation that Universal would wish to position Meledandri to oversee DreamWorks in addition to Illumination to incorporate his cost-cutting measures on the production side of things while maximizing profits.
Insiders fear that diluting Meledandri’s vision and commitment to the company he formed would be the only way to destroy the Illumination Entertainment juggernaut, that its greatest risk would be toppling from within as a result of corporate pressure.
While only time will tell whether such concerns warrant merit, no official statements concerning such a move have been released.
WIllumination Entertainment, on the other hand, is showing no signs of interrupting its release schedule with a third film in the Despicable Me set to be released on June 30th, 2017. A sequel to The Secret Life of Pets will follow on July 13th, 2018. Finally, an adoption of another Dr. Seuss book, How the Grinch Stole Christmas, will be released just in time for the holidays on November 9th, 2018.
What do you think is the best film from Illumination Entertainment?