It's going to be a generational change?

KD: Exactly. I felt that really strongly when I went to the "Princess Mononoke" premier in Westwood, and half of the audience was college kids, I think it was the anime club of UCLA, the other half were industry people. Not necessarily animation. The row where I was sitting was those industry people and the front half were the young kids. The first scene that we saw with the head being cut off or the arm being cut off, the younger kids are like, "YEAH!" and literally the guys that were sitting next to me were, "F---, you can't do that on animation." So there you go, it's the huge generation gap. And why? Because these kids are used to this. They don't feel anything wrong with it, it's just a different way of story telling. It's just like the edgy directors here. "Pulp Fiction" is a good example. It's violent, but it's just another way of telling a story. So I think it will change in the next ten or twenty years. What can't be on the air today I think will be. In a way it can't be too radical because there're the broadcast standards, but I think it'll change.

Do you think the broadcast standards will change?

KD: They have changed, absolutely. And I think they will more, slowly though, not radically. Five years from now with broadband and what not, with the convergence of television and computers, you'll get a whole new set of broadcast standards.

Do you think the networks are going to develop programming for these niche audiences?

KD: I think they tried to do that with the big hype of the web animation, and that's what it was all about. These studios can experiment with edgy animation. They can't do it on television anymore or with features, so they chose the internet. But nobody was really able to crack that business so everyone gave up on the idea. Now then the question is, if internet becomes broadband and it crosses over into television, would the studios go back and do something more edgy? I don't know, because, when internet becomes like television and goes to mass audience, then it becomes like television. It's like where cable used to be: cable used to be much edgier and more experimental ten years ago than it is today, but now cable is just like watching CBS or ABC. They have to have advertisers; to have advertisers, they have to be careful of where they market their product. So I think that's a difficult question. I think with the internet it might be different. Cable today has what, 100, 150 channels, but in the case with the internet, we're talking about thousands, millions if you combine worldwide. So maybe you can do something a bit edgier, but it's yet to be seen. When you run something as Disney or Warner Brothers, we really have to be careful of what we're putting out there because it gets back to the studios. They don't want to take that risk because someone will look at the WB and connect it to the other stuff. Maybe the answer is you sub brand it. You create another brand like what Miramax is to Disney. Warner Brothers doesn't really have a sub brand, so maybe that's the answer right now.

There was mention a while back of Warner Brothers closing their feature animation with nothing on the back burner after "Osmosis Jones" and Fox closing their feature animation. What do you think the strength of Warner Brothers feature animation is now?

KD: I think again we're trying to go and take a different direction. What we did with "Quest for Camelot" was the Disney formula. Now, nobody can really beat Disney in that formula, so think we want to create our own niche. That's why we did "Space Jam" and "Iron Giant" and I think that's why we're doing "Osmosis." If we prove that this is good business for us, regardless of what's being discussed outside, there's no discussion as to disbanding our feature group. We're all here, there are a few things in development. Yes, we are looking at utilizes our classic characters, but even if we did, we don't want to take it to do "Looney Tunes" again, but in a different direction.

A lot of animators credited "Quest for Camelot" as the start of major studios trying to challenge Disney. Warner Brothers took that first step that no one was willing to take.

KD: Perhaps. With "Quest" we immediately changed because we knew it didn't win. Why go after the giant?

Did you need to take that step though?

KD: I think it was just a natural progression.

Could you comment on Dreamworks' "Shrek?" Do you think they're taking some risks?

KD: My first impression of "Prince of Egypt," the design style of production was very reminiscent of Disney again, but the subject matter was way different. I think they targeted a much higher age group. Never the less, they took that risk and I really respect them for doing that. "El Dorado" was the same. "El Dorado" was probably closer to Disney than "Prince of Egypt." Shrek," I think they are taking a different approach. First of all it's CGI. Up until now Pixar has been king of the hill. We'll see how "Shrek" does, I really don't know enough about it. I hope it makes it, because it opens a new door for the industry, rather than people going back to the same thing over and over.

With Pixar's "Toy Story," the ending was much darker with the toys trying to scare the hell out of the boy. Do you think with CGI that's more acceptable because it doesn't have the history of furry animals?

KD: No, I don't think so. I don't think its really matters if its CGI or 2-D, I don't think that had anything to do with it. Story telling is story telling. But I guess I never really thought about it. When an audience watches CGI, they tend to associate it more closely with live action, because the whole thing with CGI was to mimic the true world. So it could be, since it tends to overlap with live action, but it's still animated, so I think people tend to be confused. But to me, I think that's wrong. It's really where you're targeting that you can do more or you can't. One thing with CGI, a lot of people were going after super realism, and the thing I really liked about "Toy Story" is that they chose not to. I am looking forward to "Final Fantasy," though, because I've heard how amazing it is.

Any last comments about the industry?

KD: Because Japanese are very limited in the money that they have to spend, they have to be very creative and very innovative in how you literally tell a story, in how you shoot a certain scene, whereas in the United States we don't have those restrictions and could do whatever we want [but don't]. Still, the animation industry isn't dying, it's going through a huge change and will come up stronger than ever with new production styles and new technologies. Someone out there will break the rules and then everyone will follow and the next cycle happens. But whatever it is, if you have good storytelling, it doesn't matter what you do.