How Beat Bugs helped Atomic Cartoons realize its expansion plans

The animation studio this week relocated its Vancouver headquarters as it increases its focus on original IP and capitalizes on the escalating demand for service work in B.C.
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With Atomic Cartoons this week announcing it was relocating its Vancouver headquarters to a new 35,000 square-foot facility, president Jennifer McCarron says the animation producer is now poised to expand its focus in both original productions and service gigs.

Rapid growth over the past 20 months (from around 250 to 400 employees) necessitated the move, which was considered significant enough by the province that it was attended by B.C. Premier John Horgan and Minister of Tourism, Arts and Culture, Lisa Beare this week.

McCarron told Playback Daily the expansion has been fueled by two primary factors: the shine from its Beatles-themed animation Beat Bugs (produced alongside U.S- and Australia-based Grace: A Storytelling Company and Australia’s Beyond Screen Production) and the explosion in demand for animated content originating from L.A.

Since the end of Atomic’s first original series Atomic Betty (2004-2008), McCarron said the animation studio had struggled to find sustained traction with an original series. That is, until Beat Bugs garnered a Netflix pickup and was seen across the globe.

“What it did was shift the perception of Atomic as a straight service provider to being a trusted content provider,” said McCarron, who also serves as co-president of Atomic’s parent company Thunderbird.

On the heels of Beat Bugs‘ success (it was renewed for a second season and a special by Netflix, and picked up a number of other international awards), Atomic has since secured another sale to Netflix, for The Last Kids on Earth. Based on Max Brallier’s book series, the property was developed internally by Atomic and follows 13-year-old Jack and his gang of suburban middle school friends as they battle zombies in the aftermath of the monster apocalypse. The show is expected to launch on Netflix next year.

With a growing reputation as an original content producer, Atomic has been increasing its focus on owned IP over the past three years, with the company now dedicating around 40% of its resources and investment to original projects (versus 60% toward service). By 2020, the goal is to achieve a 50/50 split between the two.

Once this ratio has been reached, McCarron said the goal is to maintain it to ensure the company’s cashflow remains consistent. “Too much original IP can get a bit lumpy with the cash flow, because we get paid when we deliver everything, because we own it. Having that combination of high-end service and originals helps to make sure we have an evenly based cash flow.”

And while Atomic has been increasing its focus on originals, it has also been expanding its service-based business too. With an influx of L.A. business heading north to capitalize on strong infrastructure, high-quality animation, incentives and a low Canadian dollar against the greenback, its client list has been growing as digital platforms and studios look to expand their animated offerings. Atomic’s recent service gigs have included the Netflix original Cupcake and Dinosaur, Nickelodeon’s Max & Ruby as well as projects for Lego, Mindcraft and Marvel.