All right… if you read part one, I hope you now see the importance of learning an industry before entering an industry. So you’re going to start reading Variety and/or The Hollywood Reporter and/or any of a dozen other relevant trade magazines that cover the entertainment industry. But since trends can only be recognized by observing patterns over time, you’re at a bit of a disadvantage if you’re just joining the game today. That’s the purpose of the next two articles – to bring you up to speed on what you’ve missed. As I mentioned in the last article, I’ve got bad news, and good news. This article will focus on the bad news. I know – how exciting. But if there’s anything I’ve learned in the last 15 years, it’s this: Bad news is good data. Not ‘good’ as in ‘fun’, but rather ‘good’ as in ‘valuable’. Understanding an industry requires a knowledge of both the good news and the bad news. Ignoring bad news is a very good recipe for making bad decisions. Have I made my point? Good. Let’s move on.
So what’s the bad news? Simply this: If you’re looking at VeggieTales as a model for the launch of your own Christian video project, you’re barking up the wrong tree. It won’t work.Why? Because the VeggieTales model – raise some money to produce a half-hour animated video or two, release those videos in Christian bookstores where they’ll become wildly successful, then follow up with successful launches in Wal-Mart, Target and everywhere else – was originally developed in the early 1990s. The calendar today reads 2007. A decade and a half later. Very little that was done in any industry fifteen years ago can be repeated today with the same results. The world is simply changing too quickly. In fact, if VeggieTales was launched today using the same strategies as in the early 90s, it would fail. Why? What has changed? Let me describe the world of home video and family entertainment in the early 90s, when VeggieTales was conceived, and then compare it to the world today.
In 1990, DVD had yet to be invented. Families were still getting used to the fun they could have with their new VHS decks. There was only one basic access kids cable network (Nickelodeon), which at the time aired no original animated programming. Zero. The Disney Channel was a premium subscription service (also with no original animation), and the Cartoon Network had yet to launch. There was one feature-animation studio in America, belonging to the Walt Disney Company, which was turning out, at most, one animated feature per year. Hollywood had yet to move to “sell-through” pricing on VHS releases of their major motion pictures, so most movies on VHS carried “rental” prices in the range of $40 to $60 dollars. (This pricing was geared to maximize profits from selling a limited number of copies to movie rental stores like Blockbuster and Hollywood Video.) As a result, few families bought feature-length movies on VHS. Movie collecting was left to well-heeled media buffs, who hated the quality of VHS tapes and instead bought even higher-priced laser discs (remember those?). This left a huge hole in the market for affordable VHS releases for families, and gave rise to a direct-to-video industry focused primarily on kids. Enter “Wee Sing” sing-along videos. Enter Barney, and Sesame Street videos. Thirty-minute, inexpensively produced videos sold like hotcakes at $14.95 to as much as $19.95, which seemed like a bargain next to a Disney movie for $49.95. An entire company, GoodTimes Video, was built simply by making horridly cheap versions of Disney movies and throwing them onto the shelves of Wal-Mart. One enterprising videographer built a business by videotaping construction equipment “in action” and cutting the footage into half-hour shows for kids. And Wal-Mart stocked every one of them. This was the world in which VeggieTales was conceived.
So what has changed? Well, everything. Today there are three 24-hour, basic-access kids cable networks, each filled to the brim with original animation and even original feature-length movies. There are more feature-animation studios than you can count, turning out, collectively, 10-15 animated theatrical films each year. The first Shrek movie shocked the industry by hitting store shelves on DVD at $19.99, setting a new low for “sell-through” pricing for theatricals, and effectively squashing the pricing of half-hour videos down to $12.99 or less. (Big Idea has maintained a $14.95 price for VeggieTales DVD’s only by going to 40+ minute program length, which, of course, increased production costs by roughly 1/3 without increasing revenue by a penny. Ouch.) On top of the price pressure, shelf space for half-hour kids videos has evaporated. Whereas in the mid-90s a typical Wal-Mart might have eight feet of shelf space devoted to half-hour kids videos (10 Barney titles, 5 Elmo titles, 6 VeggieTales titles, etc.), today that space is just two to three feet. What’s filling the rest of the space? Pixar films. Dreamworks films. Spiderman 1 and 2. Lord of the Rings Extended Version boxed sets. The Simpsons Season 1, 2, 3 and 4 boxed sets. High School Musical Collector’s Edition. Oh yeah – and last year’s 13 animated theatrical films, on top of all the live-action family films. (If you haven’t noticed, the family theatrical business has exploded in the last 7-8 years as Hollywood noticed the most profitable films tend to carry G or PG ratings.) What’s more, the rapid adoption of DVD, which producers like Big Idea and Barney’s parent Lyrick Studios hoped would be a boon (“They’ll buy our new releases, AND they’ll go back and buy our old ones again to have them on DVD!”), didn’t pan out that way. Declining VHS sales were replaced by DVD sales to a certain extent, but it wasn’t a one-to-one exchange. Instead, each lost VHS cassette sale was replaced by one-half of a DVD sale. Why? Because DVD’s durability combined with newly introduced sell-through pricing on theatrical films suddenly turned families across America into movie collectors, so not only were we competing with Barney and Elmo for a sale, we were now also competing with Bambi, The Jungle Book, Chitty-Chitty Bang Bang, Gone With the Wind, The Wizard of Oz, and Raiders of the Lost Ark. Suddenly everyone was buying all their favorite movies on DVD, and that latest Barney or Elmo title just didn’t seem quite as appealing. DVD really became the format for collecting movies, and the half-hour video business would never be the same. (More recently, DVD has also become the format for collecting favorite TV shows, but typically whole seasons at a time in big, fat, shelf-space hogging boxed sets.)
But wait – what about Christian bookstores? Surely they still had the shelf space for half-hour videos, right? Yes, they had the shelf space. But they were suddenly missing something equally important: customers. The mid-90s were heady days for Christian bookstores as hit products like VeggieTales videos, Left Behind books and Amy Grant CD’s were pulling shoppers into stores in record numbers. But success brings attention. Slowly but surely, retailers like Wal-Mart and Barnes & Noble noticed the success of Christian product in Christian bookstores, and wanted to get in on the action. By the second half of the 90s, virtually every product that was a certified hit in Christian bookstores could be found at Borders or Target as well. This was very good for Christian ministry, of course, as books like Rick Warren’s The Purpose Driven Life were able to reach much larger audiences. It was not great for Christian bookstores, however, as those hit products were the keys to bringing in shoppers, who would usually pick up another book or two while they were in the stores. Within five years of the mass market’s embrace of the Christian “hits,” foot traffic in Christian bookstores dropped nearly in half. In one year alone (2003, I believe), 10% of all independent Christian bookstores closed their doors. Why? Because most buyers of Christian products only bought the “hits.” And if they saw the new Michael W. Smith album or VeggieTales video in Wal-Mart first, that’s where they’d buy it. Given that the average buyer of Christian products in the late 1990s walked into a Christian bookstore once a month, vs. Wal-Mart once a week or more, guess where they saw those products first? By 2005, the average shopper of one of the major Christian chains was walking into a Christian bookstore only once a quarter.
And with that, the VeggieTales model was officially dead. Creating shows the met the quality standards of kids raised on VeggieTales is not cheap, so new producers seeking to enter the market figured they’d need Wal-Mart sales as well as strong Christian bookstore sales to recoup their investment. But Wal-Mart is only interested in “hit” Christian products. And, unfortunately, Christian bookstores no longer have the foot traffic to make a new video series a “hit.” Producers now find themselves in a Catch-22: Wal-Mart will only take a hit, and Christian bookstores can no longer make a hit. In the 13 years since VeggieTales debuted, only two new video series – out of probably 20 or 30 attempts – have launched in Christian bookstores with even a modicum of success. The first is “Bibleman,” which seemed to succeed due primarily to the relentless church touring schedule of the accompanying live shows, and the second is “Hermie the Common Catapillar,” which, I believe, succeeded primarily because the cover of the video sported the names Max Lucado, Tim Conway and Don Knotts. (Max Lucado being a hit brand in his own right, and Conway and Knotts being two comic actors older CBA shoppers absolutely adore.) And even still, neither of these series were able to translate CBA success into mass market opportunities.
So what’s the bottom line? If you’re hoping to launch a new video series using VeggieTales as a model, forget it. I’m not going to say it’s impossible, but it is highly, highly improbable. The world has simply changed too much for that model to be viable. That’s the bad news.
So… what’s the good news? Hang on, I’ll get to that next.
Continued in Part 3>
Your book impacted me tremendously. When I started reading it, I was in a period of fasting, crying out to God to see how to make my filmmaking dreams come true. And the response I kept getting was to lay those dreams down first.
I couldn’t do it.
Enter your book.
I read the whole thing in one afternoon, and when I reached the heartbreaking end, I cried. Then I noticed something odd–that you ended with the same thing I had heard earlier–to lay your dreams down.
That night, I got on my knees and rededicated my life to God. Over the next few hours, I gave Him every little dream I’d ever had. For the first time, I realized that God didn’t want me to DO anything…first, I had to be His. At the end of the day, that’s all that really matters.
Thanks so much for letting God speak through you.
PS: I also just finished reading the life story of the guy who does the voice of Elmo and…your book was much better. 🙂
Interesting stuff here Phil. I understand the reasoning behind all of the numbers, and the shelf life of a video, and how much a video gets produced for, etc. But isn’t the main point that America, or generally the world has changed in its habits of watching good programming together? It doesn’t happen anymore in the basic family. The family as we know it is so fractioned out, that they don’t even eat together anymore, so how can they enjoy a program together, consequently why would they buy one to view? I think what you have uncovered with your dialogue is the basic reason why families fail in the world today. They do not do things together. Whatever it is, everyone in the family unit has their own lives, and they are much more interested in their own things, then things of the family.
I agree with everything you have written, but doesn’t it all point to the collapse of the family unit as a whole? Sad news – yes.
I also think that when we talk about making Christian films or Christian shorts we’re sorta missing the point in today’s media market. DVD itself is on the road to destruction in some senses. In this time, you can walk around with 80gig media devices in your pocket! They stream media wirelessly to your widescreen TV. I mean, who needs a disk?
And shelf space? Ha. Wal-Mart knows it and even THEY’RE scared.
It’s a new game. Look at the rising media. It’s digital. It’s often FREE for download. It’s totally transmittable and you can carry it in your hand. Consider Buck Denver. Phil making money there? No. Not off the show. But he will. Once the notoriety reaches levels where the CHARACTER is a commodity in itself (if that’s what Phil’s reaching for… nice new studio, BTW).
You can pretty much forget the notion of making it as a start-up Christian film company. And the market is SATURATED with young (and old) animators who are lined up to work for the established guys. Young animator? Time to change the day’s plans. New strategy required.
So, what to do? Like Phil says, you need to see the trends of where things are going. Look what Phil’s doing. He’s establishing an IDENTITY for jellyfish without focusing on sales or products. That’s where he’s STARTING. He’s starting with the veneration of a CONCEPT, a brand, an idea. He’ll first build loyalty into the brand… then he’ll have a market for a product (whatever form it may come in). That sort of thing takes time and committment and prayer. It usually involved getting into the FREE distribution of content first (like Buck’s Jelly News). Then, once you’ve established loyalty and devotion to your character and your brand -and you have an invested audience- then you can use some of the modern trends and contemporay media devices to begin to capitalize on your plans by selling your products and services to those who are invested in your characters or your message or your brand. (Because they’re not going to just happen upon your video in WalMart and say, “Hmmmm. Looks nice. Okay, I’ll bite.”)
Look at the differences between Jellyfish and Big idea. Look at the new approach. Is anyone seeing any OVERT ministry in Jelly News? No. It’s not time for that… YET. What you’re seeing is the building of a brand. The establishment of a name, a character, an identity. Because, today, the venues, medias and rules have changed and you must first BUILD something before you can sell it. The ministry -the core message- will come later once you have an invested audience. First you reach out. You BECOME a brand. Then you sell it. And you most likely sell it DIRECTLY. That’s what Phil’s doing, I believe. He’s doing it quite well, too (because I LOVE Buck).
That’s where I see the trend heading. I’ve poured months worth of effort into a project of mine. There’s been no talk of profit, just of establishing a distinct brand with a distinct idea. And now, with announcements like the iPhone, I see the medium turning where I want it to. New devices like this one from Apple are CREATING the atmosphere that I’ve been gearing my project towards. With some start-up capital and a little luck, I’ll build the audience. There’s no ministry, YET. But, there will be. It starts with the site. Then the vodcast. You put in the time, you try to build the brand. Then, if you really have a worthy idea and you really pray and you really devote yourself (and you put in the time.. and you put in the time…)… well, you’ll get your shot if you do it right.
Maybe I’m just nuts. Maybe you shouldn’t even bother reading this. But, just ask yourself this one question: If even Veggie Tales is struggling for market share and there’s more Christian consumers than ever before… how is anyone going to launch a successful Christian video series the traditional way?
What you say about video collecting is spot-on. When we recently moved to a new house, the only VHS tapes we saved were the Disney movies and the Veggie Tales (really…seriously…stop looking at me like that!) I’ve even slowed down on buying DVDs until the whole Blu-ray/HDDVD war is settled.
But putting on my prognosticator turban, will the “good news” involve the word “Youtube”? Just a guess, from someone who’s had an idea for a video series rummaging around in his head for years, but no idea what to do with it.
Some good thoughts, Phil. You have learned a lot and your experience is invaluable for all of us. However, I would add a few thought that you have not brought up that could change things a little bit. 1) I don’t think you need to produce a video up the Pixar standards of the day to sell a lot. Look at Flywheel – become a mini hit and being produced at 20,000 or less. Or look at Facing the Giants (10 M in theaters; 100 thousand cost; and that’s not counting video yet. I think the entire issue that people are facing today is quality. If you can create something that has interesting story and interesting story it hardly matters how good it is in visual quality. I think you are one person who could do it. I believe that one of the reasons VTs fell flat when you were making Jonah is because the videos produced during that time lacked the high quality of storytelling. This has been an endemic problem with not only Christian videos but also with secular ones as well.
2) I believe that someone like you (and maybe your newscaster there 🙂 could produce a fun video for a few thousand dollars that would catch on with kids and parents alike. Believe me, people are looking for this. (I know that I am and I’m a pretty average parent.)
3) People are also looking for ongoing stories. If you did a video you would need to have the characters grow and change over time. This would allow you to produce a lot more videos than normal – and even sell them later in a package.
4) Again, the key is GOOOOD stories. I can’t overemphasize how badly this is needed. We need funny. We need great writing. I don’t believe we need great video quality. That’s old. Everyone does it. I believe this is a key that nearly everyone misses. Look at U-tube. Look at people watching movies on their I-phones. You could market a movie/set of movies through the Christian book store and it would watch on. But you need quality. I think you can do it Phil … and I wish you would!!
There, that’s my 2 cents worth.
Great article! Can’t wait for part 3!
I can only respond as a consumer, since I have no interest in breaking into the whole children’s media thing. But I am pretty frugal, and don’t think I would plop down $15 for a Christian video (DVD) that I didn’t hear about through either a friend or church group. I remember about 9 yrs ago when I was browsing the stores for educational, and spiritual videos for my newborn (ha ha…yes I was one of THOSE), I came across a VeggieTales video. (Sorry about this Phil…) It looked silly to me. Talking vegetables that taught Bible stories? But one of my friends, who had older kids told me that they were a great series. Lots of fun, music, not preachy, but full of good values and lessons. Somehow Madame Blueberry ended up in my home. We loved the show….and got hooked! That was a long time ago. How much more difficult must it be now for you guys looking to get something started? While, I agree with the commenter (sorry forgot your name) that “story” far outweighs the visual component. There has to be both nowadays. We are so used to seeing Pixar / Disney stuff that the bar has been set, visually. Let’s just say I have been pitching Christian media lately to schools and churches. It really surprised me that even within the subgroup of Evangelical Christian, there are a lot of different takes on what is appropriate children’s media. Some want it to be completely Biblically accurate, without any artistic deviation or additions. Some think humor has no business in a Bible story. Don’t be too preachy. Don’t be funny. Don’t deviate from the story. It must be a very hard business to break into, especially these days.
I totally agree with all the comments that have been voiced. However, I do have a question burning: Where does Interactive Media fall in to play with today’s technological trends? In most cases, it still considered “new” media. I for one would like to see more Christian representation in this industry–not for entertainment, neccessarily, but edutainment and in-your-face ministry. I’m pursuing my degree in Interactive Media at present and have full intentions on using it as a ministry. I sure hope I didn’t make a turn down a dead-end street. . . .
I could be completely wrong on all of this but…
One thing I’ve personally noticed is the target audience is smaller and a little more difficult to reach. I could be wrong, but here’s my reasoning.
I watched in shock as Veggie Tales was slammed and eventually banned altogether in my church (generally considered a very open mega-church). All due to a few very vocal critics. Common sense was restored in time but not before it was too late to pitch in to keep Big Idea afloat. Could you afford to have churches wait a year to decide whether to sell or reccomend your product?
I saw arguments in the Christian community at large which echoed this, the “bad guy” songs were considered too catchy, some argued about their content and still others seemed confused on whether or not Veggie Tales was actually “Christian” or catered to other religions as well (Judaism, etc) The arguments seemed silly to me but seemed to catch on.
I also saw the raw buying power of the church with “The Passion” and compared it to Jonah and was confused by the discrepancy… I suppose a story of our lord as opposed to the adventures of a superhero pickl…sorry, cucumber, could be part of it, but maybe I’ve made a point anyway…
Many cartoons bought by the same families went with little more than a mutter when something inappropriate was in them, but it seemed that adding “God” to the mix made everyone an instant critic.
Personally, I would love to see someone willing to make the films, distribute the films exclusively to christian retailers , etc ( I would buy them loyally) but I’m not sure I would have the guts to rely on the audience for MY bread and butter.
I’m reading these artilces again 2 years later. How does the forthcoming “What’s in the Bible?” fit into this? Will you be only selling through the web and Christian bookstores? or will you aqlso seek out “mainstream” stores and other new opportunities?
Hope the production of the new WitB episodes are going well.