Garfieild, the Pink Panther, and Donald Duck are products of a brutally competitive industry. So much so that little cartooning is done in Hollywood or at major studios elsewhere. Within a generation of Mickey-Mouse's birth, Hollywood was struggling to pay artists to draw and paint the minimum twenty-four frames needed to generate each second of animation. The big studios finally opted to create the cartoon characters, backgrounds, story boards, and scripts, but to subcontract the labor-intensive artwork. Australia was briefly a second Hollywood until it outpriced itself. Now the soaring wages in Japan, Korea, and Taiwan are a signal that the industry is on the move again.
Each time Taiwan's wages and currency climbed in the late 1980s, James Wang (王中元), owner and CEO of Wang Film Productions, Taiwan's animation giant, knew his studio's Cinderella days were ending. It was a bitter course for an entrepreneur who had been feasting on success since his Taipei studio opened in 1978.
An artist sketches a cartoon character in different poses—It takes at least twenty-four frames to generate each second of animation.
When Wang entered the field, he had the education package he needed: an economics degree from Soochow University, a master's degree in audio-video education from Indiana University, and graphic design studies at New York's School of Visual Arts. Doing animation work in Hollywood also gave him the connections needed to ensure his new studio was busy. Bill Hanna, the animator-founder of Hollywood's Hanna-Barbera, is a close friend. Eventually, Hanna-Barbera be came a partner. Wang's other source of capital was his own circle of family and friends.
Wang named his tiny studio Cuckoos' Nest. He and a group of seasoned Hollywood professionals trained the Taiwan team that produced seventeen 22-minute cartoons for Hanna-Barbera in its first year. Soon, Cuckoos' Nest was winning contracts from Walt Disney, Warner Brothers, and Universal. Global recognition came with the 1990 big-screen success of Hanna Barbera's feature based on the television series The Jetsons. Cuckoos' Nest, now the trademark name for Wang Film Productions, also does work for studios in Spain, France, Japan, and Canada. The company won Emmy Awards for American studios in 1990, 1991, and 1992.
Business flooded in for more than a decade, and so did profits. Expansion was constant. On the surface, everything still looks great. The ability to produce two hundred half-hours of cartoons a year makes Wang Film the world's largest animation studio. It also has the largest number of employees: seven hundred in Taipei and two hundred in its subsidiaries in Thailand and mainland China.
In spite of its size, however, Wang Film's revenues trail far behind the full production studios. The big money goes to the companies that invest risk capital, own copyrights, and create such cartoon blockbuster series as the Smurfs and Yogi Bear. It is a fact of life that contract work goes to the lowest bidder who can produce the quality needed. Although Cuckoos' Nest can produce quality, it cannot control wage increases or foreign exchange rates. Taiwan's boom is now outpricing Wang Film's ability to pay the hundreds of artists it needs to meticulously draw, color, film, and edit millions of cartoon images each year.
Wang Film's response has been a complex restructuring with two major objectives: converting from low to high technology and entering full production—which means it has to start to create its own cartoon characters, background scenes, and scripts. The success of the company's entry into mainland China will be the key to both.
The company has already invested more than US$10 million in computerizing the animation process. Another US$4 million is planned. "By increasing the use of computers, we can do more work," Wang says. "That means more jobs—not today, but over the long term." Wang is also confident about his decision to enter the mainland market. "In the short term, these decisions are difficult financially and difficult for our people," he says. "But for the long term, I'm optimistic."
The painful process of replacing artists with computers is also under way. Two years ago, the company reduced its Taipei staff by three hundred. To protect the largest number of employees possible, many were offered computer training. Currently, 85 percent of the computer center is staffed by employees whose earlier jobs were eliminated by computers. They do checking, coding, and key in the ink instructions for the computer's digital color program. With a few touches on the keyboard, the computer paints from a color menu of 1.6 million tones and hues. Wang's Hollywood-refined computer equipment and software were purchased via Hanna-Barbera. Cuckoos' Nest producers are now pushing the limits of this software and developing their own.
Upgrading is essential for survival. Wang Film has spent millions on computerizing its operations, including this state-of-the-art editing room.
Additional computer integration is essential for the company to protect and expand its profits. The studio must be able to maintain and, even better, increase its contract work to fund its transformation. This is where mainland China and Thailand come in.
In 1990, Wang Film opened a wholly-owned studio in Zhuhai, southern Guangdong province. Taipei staff members provide the necessary training and supervision. Production focuses on hand drawing and coloring by computer menu. A Shanghai studio is also planned. Although a joint venture is being considered, quality and copyright concerns will probably dictate that Wang Film retains full ownership. Wang was drawn to Shanghai like an artist to an art colony. The city is the hub of the mainland's animation industry and an ideal place for Wang to tap into a new source of talent.
Although Bangkok offers better quality control, a more motivated work force, and equally affordable labor, Wang's focus is mainland China. Only if efforts there fizzle will he falls back to a Bangkok expansion program.
Good-bye paint brush—Employees determine the ink color selections for a cartoon using a digital color program.
Why the China obsession when copy right protection there is a myth? Wang has studied the Japanese model. When others shunned Taiwan's market during its pirating peak in the mid-1980s, Japan saturated the market. It accepted the risk of infringement in order to win customer loyalty—and it succeeded. Japan's animated films are known for their sharper focus, faster pace, and greater violence than the softer American products. Taiwan audiences now have a hearty appetite for both Japanese and American cartoons.
Wang Film has purchased rights to some European animated products and is already distributing in China—but with discretion. Sales are made directly to small, regional stations, not to the major television stations that pirates normally target for their illegal recording. Wang expects this embryonic network to pave the way for distribution of Cuckoos' Nest original products, slated to start in mid-1994.
Cuckoos' Nest is just entering full production, from creating new cartoon characters to putting the final animated films in the can. The shift also means raising risk capital instead of collecting a steady pay check for factory-line contract work. It's a big leap, and the company is not going to make matters more difficult for itself by starting head-on competition with Disney and other major studios. In stead, Wang is targeting a niche: Chinese children's cartoons based on Chinese folktales and allegories.
Color testing for accuracy—Wang Film's move into full production of its own cartoon features is based on fifteen years experience in the animation business.
The field is wide open. Except for Shanghai, little Chinese-subject animation is produced anywhere. And most of the cartoons are technically poor and have plodding, weak story lines. The industry is still in its infancy. Nevertheless, Wang Film is taking great risks by pioneering its own productions and cultivating a new industry niche at the same time.
But James Wang has gained a reputation for taking risks tempered with a degree of pragmatic conservatism. He says that the use of Chinese cultural themes has several benefits. For example, the content will not affront old or young, traditional or modern. This prudence respects market realities, since 95 percent of the pan-China market is on the mainland. Most mainland Chinese have only recently been exposed to foreign videos, and up to now, most domestic video entertainment has been served up in cultural wrappings. In addition, Chinese folk he roes have strong, universal personalities, which Cuckoos' Nest animators think will make it easier to create popular cartoon characters.
Animation is complete on Wang Film's first Chinese cartoon feature, based on three folktales about a genie, a ghost, and a goblin. Release is scheduled for mid-1994. Work is already under way on the accompanying audio, video, book, computer game, and merchandise package. Wang plans to follow up with a ten episode series of animated Buddhist teachings featuring a naughty young monk. Both cartoons will target the pan-China market of Hong Kong, Singapore, Malaysia, Taiwan, and mainland China.
If successful, the cartoons will be tested in the rest of Asia. Although chances of an English-language remake are poor, Wang hopes that future Chinese cartoons will not only tap into the potentially huge mainland China market, but also be attractive in global markets. "Ten years from now," he predicts, "there will be a very strong demand for Chinese cultural products."
To succeed, Wang Film must shed its low-profile contractor image and recruit co-funders and joint-venture partners. The company has made a start. San Ya Publishing Company, a Hong Kong book publisher backed by Beijing investment, has already signed a contract to co fund children's educational materials. And Hong Kong and Japanese interests are co-funding computer games and educational materials to accompany Pretty Ghost, a comic animated feature based on a Chinese folktale that is currently in production.
Despite an already hectic production schedule, problems abound. Depending on Chinese subsidiaries brings political, copyright, and productivity risks. Heavy investment in training is needed, and the distance requires additional communication and quality control. And it is still too early to be sure how large and loyal the audience will be for Chinese cartoons. Will Chinese children make way for both Sesame Street and Hui-yuan, the naughty Buddhist monk? Or will they choose only one? Thus far, Asian markets are in the midst of an epidemic of mimicry, where Western fashion, music, and the arts are all hot items. The increase of satellite TV coverage is further boosting these trends.
At the same time, Japan is already invading Wang's coveted turf. Two years ago, the Japanese produced The Romance of the Three Kingdoms, based on an extremely popular Chinese historical novel. Chinese markets had to buy the film and dub it in their own language. Although it's a hit, it hurts the cultural ego.
Wang Film is also new to the game of generating the cartoon cult cargo that often multiplies animation profits. Studios that have been in full production longer have an edge, and Japanese competitors are already masters at investing in computer and video games that promote their cartoon characters.
Cuckoos' Nest animators have also discovered that generating a Chinese product is technically and creatively difficult. Attempts to animate the strokes of master calligraphers or the subtle washes of traditional brush painting clash with computer rigidity. Wang's animators are trying to compensate for the computer's lack of Chinese soul, but it is proving a time-consuming, costly task.
Moreover, the "edutainment" market, the term coined for cartoons that mix education and entertainment, is uncertain. No distribution system to schools and libraries exists on the Chinese mainland, and with China's recent economic belt tightening and feeble education funding, Wang may have a long wait for this prime institutional market.
Wang's response? "You have to know your market, know your competition, and create the best," he says. Wang Film now has a regional network of leading artists, educators, distributors, and marketers. This expertise is tapped on a consultant basis starting at project conception. The external talent pool brings top people to Wang Film without the overhead of permanent staff. Western in put is also sought so the studio can keep in touch with global audience trends. If the mainland China strategy succeeds, James Wang hopes that his company will soon be winning animation awards in its own name.—Linda Pennells is a freelance writer based in Taipei. •