IN THE PAST decade, every major Hollywood studio has invested hundreds of millions of dollars or more into animation to take on Walt Disney Co. None has done it as successfully as Illumination Entertainment, creator of such films as “Despicable Me” and “Sing.”
Founded 10 years ago by Chris Meledandri, a veteran producer and studio executive, Illumination has a track record that rivals Disney's recent performance.
All seven of its animated movies, released by Universal Pictures, have been hits (a live-action/animation hybrid, “Hop,” was its only miss). Six have grossed more than $500 million, and two, “Despicable Me 3” and “Minions,” grossed more than $1 billion world-wide.
The manic yellow minions, with their made-up language and trademark goggles and overalls, have also become consumer-product successes and the stars of attractions at Universal theme parks.
Illumination movies are made in Paris by a studio called Mac Guff that Illumination acquired soon after its founding in a bid to find animation talent outside the U.S. at lower cost. Along with Mac Guff's team of 800, Illumination employs 86 executives and artists in Santa Monica, Calif., outside Los Angeles, and 30 artists who work remotely.
Mr. Meledandri—who owns a minority stake in Illumination, which is controlled by Comcast Corp.'s NBC Universal— spoke in his Santa Monica office about the challenges of turning a series of successful movies into a global brand and what digital platforms matter to him for producing family entertainment in the future. Edited excerpts follow.
|Gone to the Movies|
Global box-office sales for Illumination films, in millions
MOVIE, YR. RELEASED BOX OFFICE
The branding effort
WSJ: Families know the Disney and Pixar brands, and clearly that makes a difference in the success of their films. How much time have you spent thinking about building the Illumination brand?
MR. MELEDANDRI: We never forget how big the shadow of Disney is that looms over us. It's this unbelievably strong brand that is ubiquitous and beloved. But I've never tried to engineer a brand persona. Early on, I thought about two things: making a film that was going to delight an audience and would also be successful, so that we would then be able to make more films.
WSJ: As competition for family entertainment in theaters and at home keeps growing, do you think having a strong brand will matter more?
MR. MELEDANDRI: I do, especially given how the world of media is evolving. Being branded to some subset of your fans is important when it comes to creating films and characters they're not familiar with. It's enormously difficult to market to a global audience, and it's becoming more difficult. We have a commitment to not only build out franchises we have but to create new stories, and some brand foundation can be extremely relevant.
A brand matters to parents, whereas kids are largely driven by their urgent reaction to the product. In the future, where there are going to be choices that have to be made by parents because it will be prohibitively expensive to access everything, those will be driven partially by brand.
WSJ: Have you identified an internal identity for your brand? Do you know what type of movie is right for Illumination and what isn't?
MR. MELEDANDRI: We tend not to put ideas through a brand funnel. We've collected a group of people who share a certain taste, and that is connected to our aspirations for our brand. We pride ourselves on making character-centric movies. If I had to say what's the most important thing this company does, it's creating characters that stay with the audience long after they leave the theater.
WSJ: There's more competition for children's eyeballs than ever, in theaters and on all sorts of digital devices. How big a concern is that for you?
MR. MELEDANDRI: There will be increasing temptation to watch movies where you want to when you want to, and so I'm very focused on how we innovate to keep the in-theater experience vibrant and urgent. In part I think it's what movies you're choosing to make and why those are films we feel are best enjoyed surrounded by a group of people. I also think it's continuing to look at things technologically.
I also am very aware our industry's success has triggered a lot more product in the next five years and that the risk of sameness is significant when you talk about a mature business combined with a cluttered market. So I think a lot about what we do to remain distinctive among all that clutter.
WSJ: Your most successful characters have been the Minions. I feel like I see them everywhere. How do you gauge if you're overdoing it?
MR. MELEDANDRI: What I've found is there is no barometer that allows you to chart when you're oversaturating a desire. You're left really trying to respond on a gut level, because by the time you might do research, it's already too late.
There's also a healthy tension between what are very sound business objectives and a very amorphous desire to preserve what's special.
WSJ: You started your career as a producer and still do that, but you're also a CEO of a nearly 1,000-person company. How was that adjustment?
MR. MELEDANDRI: If I was going to point to an area where I think I should be doing better, I ran the company like a startup for too long and didn't transition into a structure that could properly support the activity. Part of that was my remaining too involved in too many parts of the company.
What I find in a creative company is while there is a desire to build a management foundation that can feel clear and consistent, the unique product we're making doesn't always allow for that. You have to be much more fluid. So rather than following management strategy that talks about building your structure and then staffing that structure, I tend to build the structure around the strengths of the individual people we have. It confounds management experts at times when I've asked them to come in and critique what I'm doing, but it's the only way I've been able to figure out how to do this.
WSJ: So have you started to become less involved as a producer?
MR. MELEDANDRI: Not yet, but I'm definitely putting the pieces in place where we're going to transition to that.
WSJ: You're trying to build a multimedia company, but you haven't had the same level of success in all your businesses.
MR. MELEDANDRI: There's an entire area where we've yet to be financially successful, which is our games division. We've done three mobile games, two based on “Despicable Me” and one on “Pets.” Our first game was widely downloaded, north of 800 million, and has roughly two million daily active users, but when you hear numbers like that, you would expect far greater revenue.
Our next two games basically have not worked at all financially. It's the one area where we haven't figured out how to be successful. We're still going to approach it in the same way, by creating teams that really try to keep the core creative DNA of the films present in expressions on other platforms.
BY BEN FRITZ