Frederator Networks Sale Underscores the Challenges of Distributing Animation on the Internet – Animation Scoop

Frederator Networks Sale Underscores the Challenges of Distributing Animation on the Internet

This week saw the announcement that Frederator Networks has been bought by Rainmaker Entertainment in a deal that combines it with Ezrin Hirsh Entertainment to create a new company called WOW! Unlimited Media. While it’s a welcome affirmation that web animation has a future, it nonetheless underscores the uphill struggle that animated content has faced on the internet as it struggles to attain profitability.

Frederator are one of the most successful distributors (and creators) of animated content on YouTube with an enviable track record to boot. Cracking the nut that leads to viral success on that platform remains elusive for many creators and producers alike. Despite millions of views, most creators can barely afford to scrape a living, and even large multi-channel networks (like Frederator) are subject to the whims of the algorithm that rules the site. Nobody is safe, and the turbulent churn of stars, creators, producers, and networks alike mean that studios with a much-vaunted billion dollar valuation like Maker Studios can be caught unawares; dragging their investors down with them.

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While all of these struggles are generally applied across the board, animation has it worse than the average live-action equivalent. Animation take longer to produce, generally costs more to produce, and yet the rewards, when they exist, are barely more lucrative. Such facts tend to constrain animation within a particular cost/quality category that inhibits its ability to grow commercially.

Frederator’s track record in both traditional business models, and more modern ones, ought to give it a head start on many other studios, yet it too finds itself caught up in the wider waves of online content with which it can only go with the flow. Whether the company is profitable or not is beside the point, since this deal is less about making money, and more about having access to resources. Rainmaker has little online presence, but decent infrastructure for creating animated content.

Frederator has a great online presence, but relatively little in-house production facilities. Where Ezrin Hirsh fits into all of this isn’t exactly clear, but the staff mentioned in the press release indicate that diversified experience will be a key benefit.

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In the grand scheme of things, the deal does not bode well for the prospects of the independent producer. If an independent distributor like Frederator feels they are unable to go it alone without assistance, then anyone trying to do it themselves is going to be well out of luck. I’ve written on my own blog about how YouTube stifles animated content, but this deal simply proves that it isn’t simply animated content itself that’s under threat.

Is the deal a positive one for Frederator Networks? Sure it is, as well as the thousands of individual creators that are aligned under their umbrella. Where it falters is that it demonstrates beyond a shadow of a doubt that animated content on the internet is simply not as viable as live-action in its current form.

Charles Kenny

Charles Kenny

Being tall, Irish and a civil engineer by trade, Charles stands out in the animation crowd, hence his position as the Animation Anomaly.
Charles Kenny
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  • Charles (and all the Animation Scoop readers), most all of your analysis is spot on, as usual. I’ll only add my own commentary on one point. Frederator joining forces with Michael Hirsh and Rainmaker in Wow! is indeed a positive move forward for us and for the creators in the Channel Frederator Network. Our pool of resources expands, so our ability to support all our members definitely is enhanced accordingly. And the international nature of the partnership starts to l t us fulfill our belief that in the internet age, the television universe is now global.

    Where I differ is that Frederator and Wow! are the classic definition of an “independent” studio. We’ve searched for several years for partners that would make it possible to continue our two decad vision of identifying and support original voices in animation, and this alignment is just that arrangement. Michael has certainly worked with more original talents than almost anyone in the business, including us, and we’re excited to ow be a viable alternative to the corporate conglomerates that practically define our industry. My role as the company’s Chief Creative Officer and still CEO of Frederator will make that possible.

    Are things tough? You bet. But that’s true whether you’re Time Warner or Frederator. We’re in the midst of maximum disruption and only the flexible and visionaries survive.

  • Thanks for the additional insight Fred; much appreciated!