Moana 2 And The Wild Robot Are Hits — But Animation Is On The Brink Of Disaster

The 2024 box office has been a bit of a disaster, in no small part due to ripples from last year's strikes, the economy, and just disappointing summer blockbusters. Still, there have been silver linings, particularly within the animation medium. Yet again, animation has done a lot to keep Hollywood afloat, with juggernaut hits like "Inside Out 2" not only surpassing its predecessor commercially, but even breaking into the top 10 highest-grossing films of all time.

Most recently, both "The Wild Robot" and now "Moana 2" are proving to be huge hits for DreamWorks Animation and Disney, respectively, with "Moana 2" even breaking box office records. On the surface, this is great for animation and proof that the medium is as popular as ever. 

But it could also be a sign of things going from bad to worse for the animation industry. Indeed, the industry is collapsing. Granted, Hollywood has always tried its best to undermine the medium and its workers, but things are particularly bad right now. Layoffs have plagued every studio from Pixar to DreamWorks and Netflix. The streaming bubble has burst and the increase in spending on animation during the pandemic has turned into a cost-cutting mandate everywhere — hence the layoffs and downsizing.

But it's larger than this. "Moana 2" and "The Wild Robot" specifically signal two sides of an important moment in the history of the medium — outsourcing. You see, DreamWorks announced last year that it's planning to shift its production from in-house to outsourcing it to production partners, making "The Wild Robot" the last animated movie produced in the U.S. Meanwhile, "Moana 2," which was initially meant to be a limited series released directly onto Disney+, was mostly produced at Walt Disney Animation Studios' Canadian subsidiary, and with the success of the film, this could be the start of a new trend.

Animation is experiencing unprecedented global growth, and studios all over the planet are getting more attention, with streaming doing a lot of work in exposing audiences to other kinds of animation beyond just big American studio projects.

The downside is that American studios, in an effort to cut costs, are increasingly moving productions overseas, like DreamWorks will. The fear is that with outsourcing comes a move to non-union work. You see, Disney's animation studio in Canada, which produced "Moana 2," is non-union. Meanwhile, Sony Imageworks, DreamWorks' new production partner, is also based in Canada and is non-union. Outsourcing has long been the bane of unions, but at a time when union work is becoming more important than ever in the wake of 2023's dual writers and actors' strikes, the outsourcing of productions to non-union studios is a vital fight for The Animation Guild in their current negotiations.

The Animation Guild, the main union in the medium, has battled this before. In 1979, after a strike, the union won a protective clause against "runaway production," guaranteeing local employment before work could be subcontracted out of Los Angeles County. However, a strike in 1982 failed and the union agreed to a studio-favorable contract, after which TV animation began being heavily outsourced overseas, with more and more projects began being animated in Asian countries (mostly South Korea and Taiwan, but also Japan). By 2003, 90 percent of all animation work for American studios was being done in Asia.

Most recently, there were reports that some animated projects may have unknowingly outsourced animation work to North Korea, including episodes of Prime Video's "Invincible."

Outsourcing to places without union protections means, well, fewer protections for animation workers. It is well known that Japanese studios, for instance, suffer from severe crunch and overworking, with animators working long hours for little pay. With the current industry-wide desire to cut cost and to meet deadlines, things could get even worse for animators. And it's not just about studios in far away countries working on international productions, either. Consider the reports about the "Spider-Man: Across the Spider-Verse" animators suffering from the same crunch and being overworked. It is important to note that, while Sony Pictures Animation has union rules, Sony Imageworks (which also worked on the film, especially with respect to visual effects), despite the corporate affiliation, is a non-union studio, and therefore not obliged to comply with TAG agreements over work hours or wages.

Then there's the threat of generative AI, with several animation roles expected to be hit the hardest by the threat of AI. Jeffrey Katzenberg, the co-founder of DreamWorks and former chairman of Walt Disney Studios (as well as the guy who gave us Quibi), predicted that AI could eradicate 90 percent of animation artist jobs. "In the good old days, when I made an animated movie, it took 500 artists five years to make a world-class animated movie," Katzenberg said at the Bloomberg New Economy Forum. "I think it won't take 10 percent of that. Literally, I don't think it will take 10 percent of that three years out from now." And it's not just old, greedy studio heads. Ridley Scott recently told the New York Times that he's trying to embrace AI specifically for animation.

"Moana 2" and "The Wild Robot" have become surprising hits that show the power of animation to both reach a wide audience and keep the movie industry alive via box office sales. However, if Hollywood learns the wrong lesson from their success, it could lead to a catastrophe for the medium.