"Intellectual property rights--that, frankly, is the essence," says Vanguard's founder John Williams, who produced Shrek and Shrek 2, both owned by DreamWorks. For an upcoming animated film that Vanguard is producing, with Fox distributing, Williams says, "We've held back all the merchandising, licensing, and video-game rights. If and when we get a significant franchise"--a film with lucrative sequels, such as Shrek or Toy Story--"we'll own those rights. The intellectual-property rights are the treasure trove."
One big variable remains: Will these movies actually be worth watching? "There is a belief that the quality of a $25 million or $50 million animated movie is going to be as good as one that's $125 million or $150 million," says Gotham Group's Goldsmith-Vein. "But that remains to be seen." Say this, though: Mr. Clean and Charlie the Tuna are pros--and they don't haggle over residuals.
Alan Deutschman (adeutschman@fastcompany.com) is a Fast Company senior writer based in San Francisco.
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