‘Captain Underpants’ Could Dramatically Alter The U.S. Feature Animation Industry

Feature animation executives will be keeping a close eye on this weekend’s opening of Dreamworks Animation’s Captain Underpants: The First Epic Movie for a very good reason: its performance has the potential to dramatically alter the U.S. feature animation landscape.

Captain Underpants marks a couple of historic firsts for Dreamworks – and for L.A. feature artists, they might be considered worrisome firsts: the film is the first Dreamworks production outsourced to a non-Dreamworks studio and it’s also the first Dreamworks film produced in Canada. At a budget of just $38 million, it is also the cheapest Dreamworks cgi film ever made.

Despite its low cost, the entertainment value in the film looks high, as seen in the clips below. Characters may not move with the level of nuance as in How to Train Your Dragon or Kung Fu Panda, but the Captain Underpants aesthetic universe doesn’t demand it either. One could argue, in fact, that the reduced budget forced Dreamworks to innovate, resulting in more stylized and funnier-moving animation than anything previously seen in a DWA production.

We first reported that Dreamworks would produce Captain Underpants in Canada back in 2015. While the story and pre-production were handled at DWA in Glendale, California, under director David Soren, the film’s animation, lighting, and effects were produced by Mikros Animation Montreal, a subsidiary of France’s long-standing Mikros Image, which itself was acquired by Technicolor in 2015.

Dreamworks didn’t just save a few million by outsourcing the film – they saved closer to $100 million. The Hollywood Reporter revealed the startlingly low $38 million budget in a story this morning. Compare that to the last couple Dreamworks pics, The Boss Baby and Trolls, each of which was estimated to cost around $125 million – and that was after significant belt-tightening at the studio in recent years to bring costs under control.

Underpants is described by the Reporter as a “radical experiment in low-cost studio animation,” which is true when you think that Universal’s Illumination, considered among the most budget-conscious of the American majors, produced its recent films Sing and The Secret Life of Pets for around $75 million apiece.

However, it’s important to remember that there may be some artificial reduction in the production cost as well. The words you won’t see mentioned anywhere in THR’s piece are subsidies and tax credits. It’s not clear what role they played in Underpants’ ultra-modest budget, but in the past, the Canadian government has generously helped American film studios. It is logical to assume that Captain Underpants would have a higher production cost if not for the assist from Canada.

But director David Soren told The Hollywood Reporter that he also attributed the lower budget to “a commitment from the studio to lock down the story early and not tinker with it too much.” Nailing down the story, combined with a faster than usual production schedule of around two years, also played roles in allowing Dreamworks to deliver at this price.

Industry projections for the film have been modest (too modest in our opinion), but even if the film opens somewhere in the $20-30 million range, it will be viewed as a success, especially considering the money that Dreamworks has spent in the past to launch franchises. It’s too early to say what all of this means, but everyone should watch closely.