No Money in Cartoons

Before the end of block booking in 1948, which stopped studios from forcing theatres to accept their short subjects along with features, cartoon producers were teetering on unprofitability. The war had stopped a lot of their overseas business for obvious reasons. Then came another financial blow in 1947, as related by this United Press story.

Bugs Bunny to be Rationed
England’s Embargo Hits Home At Cartoon Factories
By VIRGINIA MacPHERSON
HOLLYWOOD, Oct. 16—(U.P.)—The British tax became something real to movie-goers today when they discovered they’re going to be rationed on Woody Woodpecker and Bugs Bunny.
Yep—fewer cartoons.
Up to now England’s embargo on Hollywood has been something the fans would just as soon let producers worry about. But it’s beginning to hit home.
Of the eight cartoon factories, two have shut down altogether. Columbia Studios, which makes “The Fox and the Crow,” took a look at their profits, discovered there weren’t any, and went out of business.
George Pal, whose bug-eyed “Jasper” kept kids happy at Saturday matinees, has chopped off his Puppetoons. He's going in for full-length features, where he can make some money.
“Let’s not kid ourselves,” shrugged Walter Lantz, president of the Cartoon Producers’ Association. “We’re not going to get our dough back from the domestic market. Europe used to help us make a profit. Now everybody’s losing money.”
So Lantz, who makes “Woody Woodpecker” and “Andy Panda,” is cutting down. In 1942 he had 13 cartoons out by August. This year he has eight. It’s the same all over town. M.G.M.’s “Tom and Jerry” are coming out 10 times this year. Five years ago they were in 16 cartoons. Paramount’s “Popeye” gulps spinach 15 times, as compared to 25 in 1942.
Even Disney’s slowing up. “Mickey Mouse” and company hit your movie house only every six weeks now. They used to be there once a month.
“Bugs Bunny” and Warners’ “Merry Melodies” are really taking it easy. They’ve slowed from a fast 42 a year to 16.
“And if the other companies are anything like mine, they’re losing money on every one,” Lantz said. “My costs have gone up 165 per cent since 1940. Profits? A measly 12 per cent. We spend $25,000 for a six-minute short now—and wait 18 months to get it back.”
Trouble is, he said, theater managers want a cartoon for $2.50 a week. They get it, too.
“Feature pictures get a percentage,” Lantz explained. “But cartoons come for a flat rate. Awful flat I might add. Exhibitors still think they’re fillers—something to fill up the screen with while the customers go out for more popcorn.”
At least, the British tax hasn’t cut down on that—yet.

Wood Soanes of the Oakland Tribune sniffed his response in the entertainment pages on October 23:

Well, I have no doubt that the British embargo is having its effect, but it isn’t the basic cause. Several months before Britain decided on its new tax arrangements, the cartoon producers were in the public print screaming that they couldn’t go on unless they got better terms.
The cartoon men claim they are being given the brush-off by the feature producers; the exhibitors claim that with the public demanding double bills there is no time for cartoons. In short, everyone is blaming everybody else. The sorry fact is that most of the cartoons aren’t worth the powder to blow them to Never-never land.

Soanes seems to be under the impression that if the cartoons were “better,” producers would get more money for them. But he doesn’t address the fact that the movie-going public felt they got more for their money with two features instead of one feature and several short subjects they didn’t have a great deal of interest in.
While cartoons directors would say decades later “Cartoons weren’t made for children,” that certainly appears to have been the primary audience attracted to them even before 1947. Theatre owners knew it. They scheduled whole afternoons of nothing but cartoons aimed at a kid audience, packaging shorts from several different producers together, often under the “cartoon carnival” moniker.

Studios never wised up to the value of their cartoons. All they saw is how long it took for them to bring in money. When television became the home entertainment medium of choice in the ‘50s, the studios eagerly sold their cartoons to distributors in that business, who proceeded to make a killing re-selling packages of them to television stations desperate for tried-and-true kid content. So studios never wised up to the true value of television, at least initially, but their short-sightedness allowed countless kids to fall in love with the classic cartoons and ensure their preservation even to today.