Don Bluth was recently quoted - after working with Fox on "Titan A.E." - that he will never work on a project for which he has to sign away the rights to his characters. That pretty much cuts him out of the business entirely. To what extent do you feel that independent animators might have a voice in the market?

KD: It'd be very difficult to do because nobody wants to spend money on animation. And for an independent trying to produce something without the backing of a major distributor, it's a tough game. But, on the flip side, because these big firms are staying away from taking any kind of risks, independent producers are going to come out and get crazy again breaking the rules. So, from a creative point of view, a lull in the industry is where all the ideas tend to come from.

"Ghost in the Shell's" price tag rang up at about four million dollars. A lot of the features produced over here can carry a tag of about forty million or more. What is the money spent on over here that it isn't being spent on in Japan?

KD: When a major studio produces, you're talking about big overhead expenses right off the bat. Then you're talking about the union factor, certain salaries promised to the artist whether they're an animator or an in-between artist. The studio spends maybe one to three years developing it, and then maybe another two years producing it. So in those four years they hire literally hundreds of people. And in the last ten years there has been a shortage of good people, forcing studios to lure animators and directors with a pay scale way over the union rates. Now Japan doesn't have the union. It's not major studios like Warner Brothers and Disney producing these things, it's usually someone like Bandai or some video company footing the bill. The actual animation is produced at much smaller animation houses, which carry much less overhead costs. When someone like a Miyazaki or Otomo begins a project, people flock to him. There are some extreme artists that say, "You don't have to pay me, as long as I can work for you, master."

America really doesn't have that star status among animators?

KD: They do, to a certain extent. We have a producer called Bruce Timm, creator and producer of "Batman - The Animated Series," and he has his own following, but not to the extremes seen in Japan.

Maybe this can be attributed to the cultural reverence for teachers in Japan?

KD: Yes, I think so. In the United States, everything is broken down into departments - you have a layout artist who does layouts; then it goes on to the key animation department; then it goes down to people who do clean-up; then it goes to people who do the in-between, and on and on and on and on. In Japan, animators will do their own layouts, some people will even in-between their own work, so you've got one person working. If it requires 200 people to do an animated feature in the states, you may need only a hundred in Japan, mainly because the individuals involved have the ability to wear many hats. And they work from nine in the morning 'til whenever, and they sleep in the studio. And like you said, they may have only spent three to four million but will whip these things out in a year. Whipping out a full-length animated feature in a year in the United States is just not possible.

Do you think there's a way to improve? Right now the trend is for low production costs, outsourcing, things like that. Is that something that you feel will follow through in the industry?

KD: If you outsource overseas, you can produce a full-length feature animation, close to the quality of Disney, for a fraction of the money normally spent. The United States has not really outsourced except to Canada occasionally, or maybe somewhere in England. If we can do one part of the production here and utilize a lot of the other areas in Japan, we can lower the cost, take more risks, and do something that will blow people's socks off.

Since Japanese animators work for much less, is that in any way going to undervalue the work of Japanese animators, and are the animators in America going to be threatened by this trend?

KD: In the late seventies and the early eighties, when a big chunk of TV production was taken away from the States and sent to Asia, there was a huge upheaval and picketing by the unions and individual animators. A lot of times, and I'm not speaking just of the animation industry, the industry does that to itself. The wages go up and up and up and up and up, and so a corporation has no choice but to take production overseas. So I think the answer is yes, American animators will feel threatened. But if a studio decides to stay in the animated feature business, it's going to have to find a way to do it cheaper. There's no other choice.

Are Japanese animators being exploited by being paid less?

KD: I've discussed this sort of thing with Japanese studio heads all the time and the reaction is, "Even if you give us twenty million dollars, we wouldn't know where to spend it." You get that kind of reaction back, and we don't want to be that kind of arrogant American slapping their faces with dollar bills and saying, "We've got fifty million dollars, do what you want." We need to honor the way they work. If it only takes six million dollars and a wonderful product comes out of it, so be it, because they're not offended by it. They're very proud of what they do.

And they're going to get that international recognition.

KD: Exactly. Even the Hollywood studios are recognizing the quality that's coming out of the Japanese animation studios. No, I don't think that they would feel exploited. American studios shouldn't go into another market and destroy it. If you ask the Japanese studio heads, they don't want us to do that. They'll say, "Okay, Ken, you may have twenty million dollars, but let us handle the way we do it in Japan," and that's perfectly fine. If it can be done for five million dollars, great. Then we can think of profit sharing or discuss other ways of making these people happy.

Kunihiko Ikuhara, who directed "Sailor Moon" and "Utena," was saying that Japanese feature animation is not going to be popular in America until it's made in America. Taking that into consideration, what do you see the next step being?

KD: I'm very interested in seeing real co-production, and when I say that I'm not talking about just sending service work overseas or co-financing projects. I'm talking about a real sense of co-production, which means co-development - you write it together, you produce it together. I know it's easier said than done, but I think there's a way, and if I had my way I'd love to do something like that. I've done enough work with the Japanese and the Koreans and Chinese to know that if we approach it the right way, it could be done. It wouldn't look like your typical Japanese anime, but it wouldn't look like your typical American animation. It would be a hybrid. That's going to be the next trend.

Read part two of the Ken Duer interview here.