DIC Enterprises Emerges as Animation Industry Giant : Studio City Firm Changing Saturday Mornings

Whoooosh! That moving object! Screaming across the Saturday morning sky! Headed west, toward the Orient! Speaking French! Raining spinoffs! Making money!

What manner of cartoon creator is this, that soared so fast through the cliquish air of the Los Angeles animation world, rocketing past less aggressive producers in its relentless drive for the top?

It’s DIC Enterprises, of course, as anyone in the animation business will tell you. In just three years this Studio City company has leaped-- boing! --from the kitchen table of the president’s mother in Westwood to fame, fortune, syndication and merchandising, which is where the money is in animation, anyway.

Andy Heyward, the company’s 36-year-old president, and Jean Chalopin, 34, who runs the DIC Group worldwide, have turned their American cartoon business into one of the industry’s giants, a company ranked with the likes of Marvel Productions in Van Nuys, Hanna-Barbera Productions in Hollywood and Filmation Studios in Reseda.

By some measures, DIC (rhymes with ee k ) is already Mr. Big, No. 1, Top Banana. This fall, in the Saturday morning television slots that are prime time for children’s programming, it will have three shows on CBS, one or possibly two on NBC and one on ABC.

With four syndicated shows running five days a week on local stations nationwide, DIC could have as many as 351 half-hours (the standard program length) on the air during the season. DIC is also doing five half-hours of specials and is starting a live-production unit.

$60 Million in Revenue

The company will not disclose profits--its parent company, DIC Group, is part of Radio-Television Luxembourg, a privately held entertainment conglomerate--but says revenue this year should exceed $60 million based on bookings in hand, compared to between $20 million and $25 million in 1984. Marvel, perhaps DIC’s biggest rival for leadership in the little-studied industry, claims revenue exceeding $50 million for 1985 based on current bookings. Filmation, another key rival, would not disclose figures.

DIC, which has 300 employees in three offices in Studio City, says it has made itself the picture of success by dint of superior quality and hustle. Others say the quality is nothing special, but no one doubts its business savvy.

Industry insiders say it succeeds through innovative programming, an aggressive agent and the distribution capacity of Radio-Television Luxembourg, a worldwide entertainment conglomerate that enables DIC to exploit the vast syndication and merchandising potential of its cartoons.

Some competitors also say it succeeds through lower production costs gained from its union-free workplace and its aggressiveness in sending work overseas.

“It’s an extremely innovative company, not only creatively but in the business sense,” said Phyllis Tucker Vinson, vice president for children’s programming at NBC. “A lot of the other companies are very traditional.”

Creatively, for example, DIC hopes to exploit the popularity of professional wrestling with a cartoon series on CBS based on wrestling star Hulk Hogan, called “Hulk Hogan’s Rock ‘N’ Wrestling.” It has also scored successes with “The Littles” on ABC and “Kidd Video” on NBC.

In its business approach, the company’s most profitable innovation is first-run syndication--really an old idea that DIC has helped revive.

For years, animation companies produced 13-episode, first-run shows for Saturday morning broadcast on the three big networks, selling them virtually at cost. After the networks ran each show four times, the production company was free to syndicate the show to local stations, when it would start making money.

Then, about two years ago, DIC and Filmation both began producing 65-episode, first-run shows for local stations to broadcast Monday through Friday in the afternoon. Syndicating the cartoons immediately, without airing them on the networks first, greatly expanded the animation market--freeing the animators from selling only to three networks, with five hours of Saturday morning programming each for children--and offered greater profits that they would not have to share with the networks.

DIC’s first entry into this market was Inspector Gadget.

Inspector Gadget, the story of a bumbling bionic police detective with the voice of actor Don Adams, is now seen around the world, including 112 stations that cover 85% of American households. It opened the way for other animation producers to syndicate their own first-run series.

Moreover, DIC has used Inspector Gadget to spin off an avalanche of children’s merchandise.

“We have a toy line, publishing, records, cassettes, we’re developing a live-action Inspector Gadget movie,” Heyward said. “You name it, we’ve got it. Plush dolls, comic books, sleep wear, lunch pails.”

Syndication is vital for profits. According to Heyward and others in the industry, cartoons are usually made for the networks near or even below cost. Income from syndication then becomes the entire profit.

“We don’t profit on network income,” Chalopin said. “You profit when you run your show overseas.”

DIC’s union-free workplace may also give it an edge. Business manager Harry Hester of Local 839, Motion Picture Screen Cartoonists Union, says DIC is the only major animation producer whose employees are not organized. His local, based in North Hollywood, tried and failed.

But unions are not as important as they once were in the super labor-intensive animation industry. These days, as much of the work as possible is exported to the Far East, and even so, “full animation” of the kind that Disney made famous is rare now.

In full animation, everything moved, or could move, at any time. Mary Poppins, for example, required 550 drawings per second of full animation. But the labor cost of such productions is staggering, and so now the vast majority of animation is “partial,” showing less movement in each scene.

Partial animation slashes costs by reducing the number of drawings needed per second of animation--down to as few as six. But, in the eyes of purists, it also slashes quality. Even Marvel President Margaret Loesch acknowledges that the animation of most Saturday morning cartoons is uniformly uninspired.

In any case, making cartoons is still labor intensive, and so, like some of its competitors, DIC has most of the drawing done in the Far East, where wages are lower.

Union animators in Los Angeles make $800 a week when there is work. But in the summer, the peak season for working on the fall schedule, they can command more than $2,000.

Animators in the Orient often work for as little as $100 a week, Hester said. And because many are available on a contract basis, they need not be kept on staff all year when they are only needed for three or four months.

Few companies are busier than DIC, and Heyward and Chalopin, along with their agent, Steve Waterman of the ICM agency, are widely credited with the company’s success.

Waterman, who used to represent Hanna-Barbera and has wide contacts in the industry, was a big help, according to those inside and outside DIC. “Steve keeps the doors open at the networks,” said Judy Price, vice president for children’s programming at CBS.

But most of the credit goes to Heyward and Chalopin. A New Yorker and UCLA graduate, Heyward was a cartoon story writer at Hanna-Barbera when he learned that Chalopin was looking for someone who understood the American market to work with him at the DIC Group in Paris. Heyward not only filled the bill, he is also fluent in French.

Founded in Paris

The DIC Group was founded in Paris in 1976, with Chalopin a one-third owner. In 1982, the operation was ready to enter the U.S. market. In a single year, Heyward said, they circled the globe 15 times, hopping from Paris to New York, Los Angeles and Tokyo (where DIC has an office) to establish DIC Enterprises.

“Andy is one of the best salesmen in the business, with a strong commercial sense of what’s going to be hot,” Loesch said. Of Chalopin, Price said, “I think Jean is one of the best businessmen around. He’s a very shrewd cookie.”

Chalopin contends that the key to DIC’s success is the high quality of its productions and richer-than-usual animation, which he said stems partly from the company’s international background. With roots in Paris and production facilities in Los Angeles and Tokyo, the company blends European, Japanese and American styles and claims to produce fuller animation.

The company is truly international. Chalopin himself did not speak English six years ago, and the animators in Japan speak only Japanese.

“We really, really strive for quality,” he said in a telephone interview during a business trip to Europe.

But outsiders say DIC’s animation is no better or worse than that of other big cartoon makers. Although DIC denies it, at least one competitor contends that DIC’s distinction is that it works cheaper.

“Their prices are lower than ours,” said Jean MacCurdy, vice president for children’s programming at Hanna-Barbera. “They’re not a union house, and they do more of their work overseas.”

CBS’ Price also rejected the notion that DIC’s quality is superior. “What they do bring, and what I look for, is diversity,” she said. “Competition is healthy.”