Big Idea
Big Idea is a production company that was founded in 1989. It’s best known for its CGI-animated Christian cartoon series VeggieTales. At its peak, the VeggieTales brand was selling 1.5 million copies per new at-home video release. But big idea was not able to keep up its momentum and filed for bankruptcy in 2002. Here are three reasons the company filed for bankruptcy and was bought out.
Fight with distributors
Lyrek Studios known for Barney and other children’s direct to dvd programs wanted to buy the distribution rights to big idea. Creator of Veggietales, Phil Vischer liked the CEO of the company and struck a verbal agreement, without a contract being written or signed. The CEO of lyrek died unexpectedly and the company was put under new management before anything could be made official. The assumption there was that no deal was yet finalized. HIT Productions known for bob the builder bought Lyrek Studios and because of this Big Idea backed out of the non finalized deal. HIT ended up launching a lawsuit against big idea in 2001 in Dallas. They argued that two individually signed pieces of paper equaled a contact despite the fact that one was a letter that stated that the letter was not legally binding. Despite the lack of evidence Big Idea lost and had to pay 14 million in damages, which it could not afford. Part of this was because of the movie Jonah that was in production during this time.
Jonah bankrupted the company.
The feature film Jonah was supposed to be Veggietales’ chance to compete with the likes of disney and Pixar. As mentioned previously Big Idea had only done home videos and Jonah was going to be their first theatrical release. However, problems plagued the production and the movie ended up being 25 million dollars to produce on the originally planned 14 million dollar budget. (what went wrong there) Production delays and additional marketing costs. To justify the cost of the production the film would have had to make at least 50 million dollars to break even with half of that money going to the advertising companies. But Jonah only made 25 million and there was no room to recover.
Big Idea aimed too high
The biggest problem with Big Idea was that it didn’t understand what their company was, what their market was, and how close everything could come to a collapse. Producing a 30 minute direct to the video had a much lower production cost than a feature-length film. But Big Idea thought it was capable of such because of its previous successes.
Phil Vischer has detailed his experience with the downfall of VeggieTales in his blog and what he experienced isn’t abnormal. He talks about “No Man’s Land” where you exist as a medium-sized company with the potential to become a big company, people expect you to have the marketing and business managers of a big company but you not big enough yet. “Small companies, experiencing rapid initial growth, attempt to make the leap to being “big” without having a clear plan for sustaining that growth. What got you to $10 million in sales won’t necessarily take you to $100 million”(Vischer). Growth is assumed but it isn’t guaranteed. Based on Vischer’s numbers in 98 it made sense to believe his company could become a conglomerate with the likes of Disney, but there were millions of other factors determining the success of the company and there’s no way of knowing what will be your downfall. Big idea created Christian media and failed to realize that that audience is limited. No matter how good of a movie Jonah was it wasn’t going to be able to compete with a secular Monsters Inc or Lilo and Stitch. It could never be Disney.
