Animation Options for Authors From an Australian Perspective

by Hazel Edwards
The Internet Writing Journal, October 2004
Books are an author's core business but a small Australian readership means that to make more money from a story, some authors are seeking different formats in which to reach international or even non-reading audiences. Animation of an author's story or characters for film or TV is a possibility, especially for some children's authors who have characters suitable for later merchandising as toys and other products.

Animation and merchandising are usually linked. While animation increases the audience recognition of a character, profits made from merchandising can help producers recoup the high cost of animation. As a result, characters to be animated are often chosen on their merchandising potential. And it is in the merchandising where the author makes her money.

Ever imagined that your character might appear on T-shirts or boxer shorts, doona covers, backpacks, sunglasses, pyjamas or even food and beverages?

Stuart Coventry, brand manager for Gaffney International Licensing Pty Ltd., talks of creating extra revenue for the intellectual property (IP) owner of the brand who, depending on what contractual agreements have been executed, could be the author.

The "brand" is the intellectual property product -- a character, title or concept. The higher the audience recognition, the stronger the brand. A licensing agent, such as Gaffney International, pays a fee to the IP owner(s) for the use of a character, or brand, to turn it into toys and other products, earning royalties from the sale of the merchandise.

"We look at the brand and how much exposure it has had," says Coventry. "The Wiggles are an Australian icon and have been for over eleven years. And their brand exposure is a credit to their hard work and their concerts." Television, toys, books, videos and music are all part of this brand exposure which may attract the interest of a licensing agent. Gaffney also represents the Saddle Club books aimed at 'tween' girls and which were merchandised as accessories and stationery without being animated first. Care Bears based on animation and videos has been a successful classic brand to be merchandised with toys according to Coventry.

Australian children's authors such as Paul Jennings, Peter Viska, Mary Small and illustrator Leigh Hobbs have internationally successful animation on television and Leigh Hobbs' Old Tom character has been merchandised as a toy. Others are working towards their books becoming animated films.

Financial returns vary and many authors are circumspect, but sums up to $100,000 have been mentioned. Of course, often this is not in one payment and the revenue stream from animation for the author may be a much smaller amount, and come at a smaller flow or even at a few drips.

What contributes to your book being chosen by a producer for animation?

"International appeal," says Suzanne Ryan, director of animation production company SLR. "Will the story translate to children outside Australia? Will the series have longevity? The pedigree of the author."

Ryan, who is currently in advanced stages of development for Deadly, based on the books of Jennings and Gleitzman, and Storymaze by illustrator/author Terry Denton, also underscores the importance of a good book cover.

"Savvy cover illustrations of characters can sometimes translate well into animation. Illustrators are a very important tool in the marketing of a book for animation. I scout bookshops and always look at the covers," she says.

"Merchandising from a pre-school project can have more potential than from a teenage one," says Ryan whose company has joint venture partnerships with South Pacific Pictures in New Zealand. Each year the market of pre-schoolers who might buy merchandise from an animation gets replenished, whereas merchandising from adult stories is only fashionable for that one season.

Mary Small is convinced timing matters, but maybe it's preparation and persistence meeting opportunity? Small is the author of Tracey McBean's Stretching Machine, published by A&R (HarperCollins) in 1989 and twice reprinted, and later turned into the Logie Award-winning animated series, Tracey McBean, shown on the ABC.

"The animated Tracey McBean," says Small, "is the result of an extraordinarily lucky co-incidence when Harper Collins contracted Arthur Filloy to be the illustrator. The book's zany appeal plus Arthur's artistic connections with Southern Star prompted the company to approach me for the film rights in 1996."

The project stalled with disagreements about the contract, but interest in Small's McBean did not die. "Another lucky coincidence occurred in July 1999 when the publishers reverted the book rights to me, and Southern Star's new executive producer made a new approach for the film rights. Supported by Rick Raftos Management, a more acceptable contract was signed and Tracey's opening statement, 'I'll be famous one day because I'm an inventor', came true!"

Immediately after Tracey McBean won the 2003 TV film Logie for the "Most Outstanding Children's program", Southern Star contacted a Melbourne based scriptwriter to write another series. The new series is scheduled to be shown later this year but no merchandise is yet available. Despite the success of Leigh Hobb's Old Tom, the road to animation and merchandising is full of hurdles. In addition to the contract difficulties faced by Small, there are other legal difficulties and frustrations.

"Every publisher dreams of a feature film release, worldwide, but only about 30 % of animation projects get up," says Penguin Books Rights Manager Peg McColl, who has worked on animation contracts relating to the books of Paul Jennings and Maurice Gleitzman.

Projects lag, some are never completed, and there is often a feeling of helplessness when a character is taken away from their creative control. Toys may not look like the original character, settings are changed from Antarctica to the Arctic, or subsequent stories may be written by others.

Admittedly these difficulties are also true for books being sold for film, but animation projects arguably require a greater level of creative collaboration and legal help and this is a project management challenge for some writers used to working alone. Few authors manage the complex contracts, gain investors and find distributors without help from producers, publishers and agents. This is after creating a proposal of sufficient interest to attract a producer. For authors who are not illustrators, and whose work is not already illustrated, sample artwork can be commissioned for a fee or an equity percentage and this requires others to be involved in the project.

Proper legal advice and representation are essential.

For authors, negotiation of rights is vital. Even if the production is highly successful, unless the legalities of who will own what have been worked out, they may not gain as much as they expect and may lose control of their creation.

"Get a lawyer and learn the legalese fast," advises illustrator-sculptor-painter Leigh Hobbs whose popular character Old Tom has been animated by Sydney-based Yoram Goss, and Millimages, the French animation company. "Protecting the integrity of the character is important for an original creator, whether author or illustrator."

"Don't ever negotiate a film or T.V. deal without informed legal advice on IP (intellectual property) from a representative acting on your behalf such as your agent or publisher," warns Penguin's McColl. "Negotiating a separate income stream for merchandise such as toys, games, T-shirts and coffee mugs, is where it becomes complex."

Even if agents are involved, Ryan recommends that authors check the Australian Writers' Guild website ( www.awg.com.au ) which lists industry standards for payments. Many producers including herself use this as a guide and it will give authors some idea of the range of payments to be expected.

One of the factors complicating animation and merchandising projects is the financing required. Author Peter Viska, also the creative director and producer of his own animation production company Viskatoons, attributes the lag in part to the difficulties in financing and distribution. "If the channels didn't get their Brownie points, there'd be NO local animation." This means TV networks have to sign up for a project to comply with local content requirements. But that meets only part of the challenge. The popular L'l Elvis and Dan, Dan the Dunny Man are some of his recent children's animation projects. Financially Viska talks in terms of costs of $300-400,000 per half hour episode. A local channel may pay $65,000 per episode, so the animation needs to be sold at least six times internationally to break even.

Animation financing depends upon co-productions and international investors. Producer Cecile Blackman of Mumbo Jumbo Animation attends MIP TV and MIPCOM, the international television markets in Cannes twice yearly with proposals for pre-school and older kids' animation concepts. These markets are vital in securing co-production deals with European, Canadian and UK partners. Merchandising tie-ins can sometimes be the catalyst in getting a project up, as this is a source of revenue that can make the difference between a project making a worthwhile profit or not.

Blackman says only 5% of concepts, not all of which would be book-originated reach broadcast stage. A lot of smaller companies are falling by the wayside (and some mega companies also) So broadcasters, she says, only do deals with production companies that have a track-record. Risk is also being spread by stitching together multi-partner co-productions. "Once upon a time," says Blackman, "a sale in one other major territory, France, Germany, Canada or the UK, etc., was enough to get a project over the line ... but that's not the case now. Three-way co-productions are becoming increasingly more common. Of course, this means that everyone wants to take an equity position on some level and there are only enough pieces of the pie to go round! The upside is that a certain quality is assured which is a great benefit to the concept and to the original perpetrators,' says Blackman. Tracey McBean, for instance, is a co-production between Southern Star, Egmont Imagination (Denmark), Shanghai Animation and the ABC. Although the drawings are collated in Southern Star's North Sydney offices, the animation team is in Shanghai, which is a major center for the production of animated works.

Multi-partner productions not only contribute to legal complexities, they also contribute to "the time-slip". Says Viska: "They say, 'I like it a lot,' then there's the wait." In all, most productions take about five years from signing of contract to screening of the work and that's why option negotiation is important.

As rights manager, Peg McColl regularly negotiates animation options on behalf of Penguin authors. First she checks the C.V. and track record of aspiring producers. How does the producer intend to develop the particular project from book to screen? Is it suited to the medium? What type of animation? C.G.I , or computer-generated images tend to be more sophisticated and more expensive than 2D or 3D . Is it for short television with maybe 26 episodes of 12 minutes or 13 commercial half hours? Who will script it? She prefers to separate the rights and for the scriptwriter's agreement to be separate from the original creator, even if it is the rare occasion when the book author scripts the animation.

Fees for options are negotiated next. An option gives the producer the right to develop that project for a specific time. The acquisition fee should be linked to a percentage of the budget, but often projects don't get that far. Sometimes it's a nominal $1 option fee and the project often lies idle. McColl cautions that it's wise to make the first year's option fee substantial enough for the producer to concentrate on keeping the project moving. McColl says, "In the beginning producers are often spending their own money, and are cautious of getting a return immediately, later they are spending the money of investors."

Most options are across three years, negotiated in advance, but extended each year, with the second year's fee being 50% greater than the first.

McColl suggests that $1,000 plus for the first year might be reasonable, but some of her negotiations have been six figure amounts for three-year options. Obviously some of these recipients prefer to keep their negotiated fees private. Ryan advises, "There are two payment areas important for the author: upfront and back end. Upfront the owner negotiates a purchase price for when the option is exercised and this could be a percentage of the below the line budget of the series. For example, for a $5 million budget, 2% ($100,000) upwards would be reasonable. Back-end is related to a percentage of the producer's net profit and may be 3% upwards.

Attracting investors depends upon the producer's track record but also on the author's.

Ryan says, "Authors need to be flexible in the first stages of negotiating an option and purchase agreement as sometimes a producer may come back three or four times to change deal points in a project across 4-5 years, due to marketplace changes or broadcasters requirements. Marketplace demands may change a format of 26 half hours into 13 half hours or even a half-hour special and this alters the return to the author. Currently ABC, Networks 10, 9 and 7 take children's animation but the Cable broadcasters such as Disney and Nickelodeon can also go internationally to their channels for funding, which is becoming prominent."

Options should NOT be against assignment. What that means for the original creator is that the option money should be a separate and additional payment, not a deposit against the eventual assignment of rights, which is possibly 2-3% of the gross total budget. Assignment of rights occurs when the project is fully funded and ready to start animation and this is when some authors bow out. Still, others remain involved. It's wise to have a clause reverting rights if nothing happens.

McColl says, "It's exactly the same system as finding a publisher. Publishers such as Penguin are actively seeking productions on behalf of their authors and illustrators. It's a footslog.We talk a lot on the phone. All rights are sold in active consultation with the author. But creators vary in their attitudes. Some want to grab the money and run. Others are mainly concerned with the integrity of the work."

One illustrator spent $17,000 on legal advice from a $110,000 fee which included $40,000 tax. He considers the money well spent as he now retains certain rights to his character.

Producer Ryan likes to involve the original creators in their area of expertise during the development phase as consultants with series storylines and ideas. Illustrators may be involved in character profiles and pose drawings to gain investment interest in the project as Leigh Hobbs was for the Old Tom animation.

"There were countless meetings and draft contracts," says Hobbs. "In the meantime, the producers created a pilot based on my drawings and character notes. They found a broadcaster, the ABC, and overseas partners and investors. After the contracts were signed, they and their French co-producers, Millimages, made 52 episodes of Old Tom. I have a merchandising agreement with the producers which means I get a small cut of any merchandise," he says. "I kept Old Tom publishing rights and the right to create Old Tom 'art'."

Authors retaining the right to write their on-going stories with their original characters is legally controversial. Novelization of the script or making a book from scripts creates a competing work. Publishers can't reproduce animation as a new book and the producer may own the animation rights to use on t-shirts but not in volume (books) form.

An income stream and some creative control equals success for the author in the field of animation. However, be aware that while the rewards might be great, there's also the possibility of exploitation and at the very least, frustration that a minute of animation may take years.

Hazel Edwards**Hazel Edwards is the Melbourne-based author of 150 books for adults and children including the classic, There's a Hippopotamus on our Roof Eating Cake. Antarctic Writer on Ice is in its fourth reprint, and is available on audio and in Braille, a YA eco-thriller Antarctica's Frozen Chosen (Lothian 2003) and an Antarctic play in Right or Wrong (Phoenix Education) are some of the writing based on her Antarctic Division polar resupply Voyage 5 to Casey Station in 2001. Her most recent releases are Hand Me Down Hippo (Penguin, 2004), illustrated by Mini Goss and My Dad's Gone to Antarctica(Lothian, 2004). You can visit her website at http://www.hazeledwards.com. Married with two adult children, Hazel's hobbies are swimming, belly dancing and asking questions.

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