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[WIZARD WORLD PHILLY:] 'THE BIG TOY INDUSTRY PANEL' TRANSCRIPT | | Some of the toy industry's brightest stars give their thoughts on the state of the biz in this exclusive panel transcript | | | By The ToyFare Staff | | Posted 7/09/2008 | |  | | ![[WIZARD WORLD PHILLY:] 'THE BIG TOY INDUSTRY PANEL' TRANSCRIPT](http://ep.yimg.com/ip/I/wizarduniverse_2058_521526865) Cast your mind back to June's Wizard World Philadelphia—one of the definite highlights for toy fans was ToyFare Magazine's Big Toy Industry Panel, featuring nine of the industry's biggest names (plus our own Justin Aclin) waxing poetic about the state of the industry, their influences and what they're excited about in the future of toys, action figures and statues, as well as the very real challenges now facing the industry. Now, thanks to the magic of the Internet (and our hard-working intern transribers), you can experience the panel just like you were there yourself!
The gentlemen in attendance were the Shiflett Brothers (Jerrod and Brandon), sculptor Clayburn Moore, Mezco's Damien Glonek, Eric Treadaway of the Four Horsemen, NECA's Randy Falk, Sideshow Collectibles' Scott Klauder, Tonner Dolls' Robert Tonner and Diamond Select Toys' Chuck Terceira.
So, without further ado, here's the transcription of Wizard World Philadelphia's Big Toy Industry Panel! | | 
JUSTIN ACLIN: I am thrilled to be joined onstage by real luminaries in the toy industry. I've never seen such a grouping onstage together, so I'm really excited. So, just to get the ball rolling, what do you guys think is the most exciting thing happening in the industry right now?
SCOTT KLAUDER: Specifically for Sideshow, since we are a Marvel licensee, I think one of the most exciting things right now is seeing all the Marvel movies that are coming out now, seeing all these Marvel movies actually cross the planes and interconnecting all the movies together, linking all the movies, so we can build a product base on that. So it's not "Do stuff for this movie, do stuff for that movie," it's now thinking about an entire universe of movie collectibles, and it's exciting.
JUSTIN: Obviously there's a lot of crossover between comics and the toy industry. A lot of people are big fans of both of them. With the comic book movies, have you guys felt a change in the attitude towards the toy industry, or collectibles in general? Do you feel that it's more acceptable now, more out in the open?
BRANDON SHIFLETT: Yes.
[Audience Laughs]
JERROD SHIFLETT: No.
JUSTIN: Brotherly disagreement. Like the Civil War.
ERIC TREADAWAY: For us, doing work for Mattel, yeah, it was absolutely exciting to see Transformers take off the way it did last summer, because we grew up in a time where toys were where these properties were originated at, as opposed to nowadays, so much of it is… it's a comic book or a cartoon or a movie that's turned into toys later on. It's nice to see that flip finally turn around because for us that means Masters of the Universe will be turned into a movie, there's been talk of a Thundercats movie, G.I. Joe is getting remade. It is very exciting to see the toy industry kind of take back the reins a little bit, and control our own destiny.
JUSTIN: I was wondering how you think the toy industry has changed in the last five years? Chuck, why don't we start with you?
CHUCK TERCEIRA: I don't know, I guess the collector toys created for collectors specifically probably started 12 years ago or so, some of the stuff that Clay did, so then there was a big burst of people making small boutique toys based on small properties, and then it all grew up and everyone started to license stuff that was aimed at collectors. And then the last few years, for us it seems like we have to go a little more niche again. Like with a relatively small show like Battlestar Galactica was just really booming and everyone was just doing toys, toys for this, toys for that, and now it just seems like it's kind of maturing. That's what we see is a maturing of the collector market, not just… you can't just buy everything. So, for MiniMates or other stuff like Back to the Future or Desperately Seeking Susan, we have a lot of people that buy all that and that's the first MiniMate they've ever bought, because they like that property.
JUSTIN: So you think there's less people looking to be completionists in general?
CHUCK: Yeah, definitely. There's a lot more out there, so people are definitely…at least in our experience, I don't know if everyone else… if people just go to Marvel Zombies and buy everything, but it's definitely becoming very focused. Even with Star Trek, they'll buy just the Next Generation but don't necessarily buy DS9.
RANDY FALK: What Chuck touched upon is definitely the case. The collector market has been shrinking due to retail support, and I think economics—toys that we make that were 11 or 12 dollars at retail are now creeping up closer and closer to 20 dollars. And I think the fans are still there, the collectors are still there buying them, but they're not able to buy as many, whereas they used to buy all four or six in a set, now they have to only buy their favorite one or two, because it's the same amount of money, they're just having to buy less, with the inflation, the price of labor in China, the price of petroleum for plastic is through the roof because of the oil situation, so it's definitely been challenging the last couple of years. It's the hardest it's ever been to still make a quality product and to keep it somewhat affordable. And all of our labels—everyone here is basically like…it's a luxury. No one here needs to have it, they don't have to have it, we're competing against iPods and video games and a lot of technology and what we're doing is kind of antiquated. I mean granted, it's a lot more detailed and cooler than it's ever been, but to a young kid it's like, the 60-dollar Xbox that all the kids have, that you can play on… I think to the younger kids sometimes that's a lot cooler than a toy. Sometimes they look at it and think "Oh, I'm too old for toys, I'm over toys now." It's definitely difficult to get younger fans to embrace it. We're all pretty much from the same generation, we're all old-school. We grew up with Transformers and Star Wars and G.I. Joe and Masters of the Universe, so it's in our blood, that stuff. We'll collect it forever. And so I think there's a generation gap going on where the younger audience, they're done with toys by the time they're 10. In high school I was just hiding all my toys from my friends.
JUSTIN: How are you guys reacting to what's going on right now as far as the high prices of petroleum and the shrinking economy are concerned?
SCOTT: I think that one of the things that we at Sideshow do, as well as I see it done by all the other companies represented here, is that there's a way that we go about putting this product in the market. We're trying to not flood the market, that way a collector can afford and get the pieces, so you don't want to release fifteen or sixteen figures in the same month, obviously, it's just going to kill the wallet. I think that and being aware of each other. It's not so much a competition, because no one here is competing directly against each other—it's more of market sharing. They're saying, "Oh, I don't want to spend $300 on a Sideshow product because I can get a whole bunch more from NECA for $300." So when they're making that decision, how much stuff is coming out that month also comes into play. So I think it's all of our responsibility to make sure that we don't put too much stuff in the market so that the collectors aren't overwhelmed.
CLAY MOORE: Scott's right. When you talk about economics, it's always nice if somebody buys a quality product that they know it's going to hold its value or at least perceive that it's going to hold its value in the aftermarket and really leave some money on the table when you first ship that product. It's really essential. In hard times people will turn to inexpensive ways to escape, and I think that's one of the things that toy manufacturers have that's kind of still alive is that people will turn to a 15- to 20-dollar product to take them out of their problems. They'll always find something. My mother lived during the Depression, and she always said that was the biggest boom of the movie industry because people wanted to escape and they would find that when they wanted to go see that movie. And I think that if you could offer them something that isn't just escapism, but they could always argue, "Well, this could hold its value," especially now with the Internet and eBay and everything else. Whether that really happens, whether the same economic downturn lasts, is going to determine whether that's true or not. But one thing I was also curious about—it's not just the economic downturns, is how things are changing in China. 'Cause things are changing fast and their economy is booming, more people are driving cars, they're buying all the oil that we don't want, these products are made of oil, and it's affecting these a lot. I'm sort of in the statue business now, and I know how it affects me, I could talk about that, but I'm curious for these guys, how China's flux is affecting the industry.
SCOTT: I think it's extremely interesting as well as some of the other guys here who've been overseas in China, I'm out there like four times a year, and it is amazing to watch the birth of a middle class in a country like that and to see that happening. Not everyone gets a chance to see that. And so you understand that there's now more of a demand for better wages and unionization and all that—they're on the Internet now, they're an Internet power now, and they see how much stuff costs and they say, "Maybe I should be paid more," so it's interesting to see that economy grow but unfortunately it does have repercussions up the line.
JUSTIN: I wanted to ask the Shifletts, because you guys do very small runs of your own products, how has the economy affected you?
BRANDON: We've started that so recently, that we haven't really felt it yet, but will probably feel the economic impact soon. At the same time as the economy has taken a downturn it's actually been a good time for us because there's been so much 3D artwork out there, with statues and toys and the like. It's sort of a boom. When Jerrod and I started, there wasn't a cold cast porcelain industry at all, you know Clay and Randy [Bowen] did the first things and now there are so many companies doing it, so many characters out there, it's hard for us to feel the economic impact because it seems to me that there's so much work and we're very lucky in that way, and I feel that good sculptors are—there's just a lot of products out there.
JUSTIN: What was it that influenced you the most as to the types of toys you wanted to make, or the type of sculpting that you want to do?
CHUCK: I think I watched the same cartoons as everyone else did, I watched Battle of the Planets and Transformers and all that stuff and collected toys when I was a kid. And I got into the collectible business when I was really young, and it just evolved as the industry evolved, and Diamond played a bigger role in the toy industry. For collector toys, they were the place that small shops would go to sell that stuff through, and it became more in demand. And as I moved into product development, I was really lucky to be able to work with guys that I was a fan of, like I loved the Shifflett Brothers when I was a kid. So they were one of the first calls I made, I mean literally call #2 was like, "Guys, can you sculpt for Chaos, please?" and all those guys that did all that work, for me, that was a charge. And then when we got the Marvel license that blew my little monkey mind. [Laughs] "I can make Spider-Man?? Oh my god!" So the influences are the people that I would buy their kits, I'd get their models at a show, dremel it down and paint it, and play with it and then just automatically, if it was good or bad, I went to the people who I knew, who I liked their stuff. At the time I don't think anyone was really using a lot of those guys to mass-produce cold cast or action figures action figures and that kind of stuff. That's who I knew and that's the stuff I like, so those are the influences and those are the people I turn to.
ROBERT TONNER: I did the whole thing with the model kits and all this kind of stuff when I was a kid, and I think I'm probably the oldest one up here, but I've been doing it for a lot longer, you know—all those toys and everything I worked with when I was a kid and grew up with and watched over the years, I always wanted to do my own version, because I always thought what you guys think, that I could do it better. Right? [To the audience] All you guys, you have an idea and it's going to be better than what we have. So that's where I was and I went out there and tried to make the toys or the figure, whatever, that I would have wanted. That's my inspiration.
SCOTT: My inspiration was—I was totally into comic books when I was a kid, and G.I. Joe and Transformers the same thing, had the toys when I was a kid, couldn't really afford a lot of them. The ones that I had I had for a long time. And later on, fortunately, I grew up a lot in the Marine Corps and when I got out and I got a chance to do work in retail in Philadelphia, and that was right around then the 12-inch action figures started coming back in with 21st Century Toys and the other guys and that reminded me of my childhood and I got to kind of slide into the industry that way. The coolest thing was when I got in and started playing with that stuff, I got to learn about you know, the Shiflett Brothers kits and things like that and then Sideshow, and all this history that I'd been missing out on all this time like Mad Model Party and all this crazy stuff. So it's really cool getting to be able to get into the industry but learn about the history of it at the same time.
RANDY: For me, I think it started out with Mego, when I was a little kid, like four years old, I think, my grandmother, every time she'd come to see me she would bring me a Mego doll. And as a little kid I remember, "Grandma, Grandma, what's in your purse?" And it would be like Batman, Spider-Man, Thor, and I loved these figures so much and I still have every one of them and I played with them like crazy, and I eventually graduated to Star Wars and to G.I. Joe… it just stuck with me, I've always had this love affair with toys, and not once in my life did I think they were not cool. My younger brother outgrew them before I did. So I would take his toys, my friends' toys, so I've always been enamored with the industry and then when I finally sort of broke in about 8 1/2 years ago, I worked at McFarlane, and at that point I got to know a lot of the artists and the history of what goes on behind the scenes and the thing that really sort of resonated with me was that, at least at McFarlane, there were some really talented people that were never getting credit for their work and in some cases were sort of exploited. And I just kept thinking, "Man, this is not cool. These guys are putting in blood sweat and tears and not getting compensated for it financially or in name," and that's what led me to just go over to NECA and build a studio there and work with people that are great and that should have their names on the stuff that they do, like the Four Horsemen, and some of our sculptors that are in the back of the room- Kyle Windrix, Jason Fraily, Shawn Nagle, Rudy Garcia- just people in the industry, you know these guys' names, these guys are great artists, and they became friends first and foremost and now to be able to work with them is awesome.
ERIC: Probably a very similar answer to Randy. I'm basically a toy guy through and through. Probably started off similarly, with me, though, with Mego, then Micronauts, working my way through Star Wars, Masters of the Universe, G.I. Joe, probably then up through Turtles, and soon after that I was in the industry itself, but just never grew up. I've been lucky enough to work on a lot of the very same things that I grew up playing with. The answer's simple—the toys I grew up playing with are what inspired me.
DAMIEN GLONEK: I remember being a kid and Mego, Star Wars and Micronauts came out. And I would beg my parents, "Please buy me this, I promise I'll play with it for the rest of my life!" And I kind of kept the promise. [Laughs] And then from toys I graduated to garage kits, I was heavily into garage kits for a while, until toys came along at a much more affordable rate. And now it's really great to be able to work with artists that I used to buy garage kits from, and now they're sculpting toys for us of movies and figures and stuff that I've been a fan of forever, so it's very cool.
CLAY: I'm probably the oldest guy up here. [Laughs] I started in my 20's… Because I did statues first, I got into toys later, but I was always aware… my brother would talk to be about it and he would say, "Why are these girl action figures so ugly?" They were just terrible, and I remember thinking, why would they bother to sculpt them- and looking back on it now, they're charming, but they didn't do it because it was charming, they did it because it was cheap and easy. So I remember thinking, Why are they sculpted so badly? So when Brian Pulido asked me if I wanted to do Chaos toys and Silvestri wanted me to do his Witchblade toys, it was really with the point being that toys are improving, but the women in toys are still out there and it's still brutal. And so I thought, "I'm going to make these really pretty women toys," and see how far it's come and the incredible quality these guys are doing with toys, it's just astounding and there's so much expression. That's the thing—when you talk about toys that are 15-20 bucks, and I was like, "What amazing bang for the buck you get, what an amazing piece of art, but unfortunately, you're limited by the fact that it's still a toy. It's still for kids. But that's how I wound up here because I thought, "These can be better and they should be better."
BRANDON: Some of these guys were buying our stuff in the 1960s [Laughs], I didn't realize how old I was. Jeez! We really appreciate that… it's ridiculous and it's probably not true, but [Laughs] Jerrod and I… I tell people who talk to us about other sculptors. I tell kids that Clay Moore studied in Europe and me and Jerrod studied in X-Men and that's the honest truth. We are comic book nerds. We're failed comic book artists. That's what influenced us. Frank Miller, Bill Sienkiewicz, Steve Rude, Simon Bisley, and the whole world of fantasy art like Frazetta. Those guys—our 2D heroes are what got us started, plain and simple. Our 2D comic book heroes are what got us started and quickly on the heels of that, we were incredibly influenced by our Japanese sculpting heroes. Takea, Arisawa, and Iki and if you're not familiar with those guys, get familiar with them. They have neat visions, and in our opinions, the greatest artistry in this industry. | |  JUSTIN: How do you guys see the industry changing in the future? Especially considering fan interaction on the Internet.
ERIC: A lot of what you've heard up here has been about how the economy's playing into things and what's going on in China and it's hard to say, right now. I think it's going to be a little bit more, it's kind of been happening over the past few years—the toy industry's kind of losing its middle class as far as toy companies go. Your Hasbros and Mattels and JAKKS Pacifics, those sort of companies are huge, they're going to be around, and then you've got the smaller companies- I think you're losing a lot of the mid-range companies: the Palisades, we lost a few years back, and they were a great company as far as straddling the line between the collector brands and the mass market, and they also did a lot of original stuff as well. So I think, especially the collector's market, unfortunately, is going to have to weather a bit of a storm for a few years, and a lot of what we're going to have to deal with as industry people is find creative ways to stretch the tooling dollars out and continue to get quality products out to you guys without going out of business. Our company's in a unique position because we're trying to do our own stuff at the smallest level possible, but we're also working with Mattel at the largest level possible, and we're going through the same problems on our own small scale the stuff that Mattel's going through on a large scale. So a lot of the same concepts are applying to both and I know working with Randy, they're doing the same thing… you've got to stretch those tools out and get as many figures as you can out of those tools. What we can ask from you guys as fans is bear with us a little bit and realize that nobody's trying to be cheap and pull a fast one on anybody, it's just a matter of trying to find the balance between good product and not selling $50 action figures at 4 inches tall.
JUSTIN: Let's throw it open to Q&A for a little bit.
AUDIENCE QUESTION: Has there been any discussion about moving the factories from China to South America or Mexico, at all?
SCOTT: I've heard people talk about it. The tough thing about that is you're going from someplace that knows how to make the product to someplace that is just learning, so you would see a severe decline in quality until they can get up and running. So it's a little tough to make that decision. Some of these countries that are actually doing production and stuff like that, manufacture, eventually when you get up to speed, basically, but before it's always been Taiwan and China for the most part, so if other countries can get their production quality up to that level, then maybe you'll see some of our companies go to their place for manufacture.
JUSTIN: Sometimes I forget… you look at the way paint has progressed in the past few years, and you hold it in your hand and you forget that someone actually did that. It looks like it can't be reproduced on any sort of natural scale.
SCOTT: It's absolutely amazing, the skill they have, that they can do all that. They're making on the small side, 10,000 of them, as close to the same as possible, and we have to pay a price to distribute it to retail, and you pay fifteen bucks… it's staggering the amount of hands that touch it in the process of the art. It's really art that they have to do to get those eyes and the lips. And that quality that you see is a product of all of the companies, all of the toy companies that you see out there have all been years and years of work that all of these artists have been doing, because they don't just put a thing together and send it over there. They're managing it from point A to point B. The casting isn't good on this, do it again. The paint isn't good on this, do it again. All these great artists working on all these great products, so these manufacturing places overseas, that's their learning permit, that's how they learn to do art. It's years and years that they've had, in China to learn this stuff.
AUDIENCE QUESTION: Do you see that gap between the subculture between higher end sculpture, fine art, and what you do? Do you see collectibles becoming more like art?
CLAY: I kind of come from a fine art background, and I used to do my own bronzing. I think if companies don't understand that—I saw a Hercules today. And he was in a box and he was advancing on the viewer and he was all gritting teeth, and I thought, "Why the hell did they do Hercules so damn ugly and enraged? It's a great character, and it's a noble character, he speaks with this great nobility, and when he and Thor have a misunderstanding, they have it out." And I thought, "You could do this great Hercules sculpture that would be more noble, more beautiful, as a piece of art." And I think that sometimes companies don't understand that statues don't all have to be about the way they're presented to the kids because it's not the kids that are buying the sculptures. It's the adults—most of my clients are 20s, 30s, and 40s. They're not going to show a statue of Wolverine tearing everybody up and going flat out berserk. The most interesting thing about Wolverine to me is when he's speaking, when you find out his background, what his motivations are. So as long as you're talking about the statue business, you're selling to adults. And I think a lot of statue companies don't make that connection and understand their audience enough. I do bronzes of my editions, just because I like to see my artwork in bronze, and I have a couple of buyers, that always will start buying the work in bronze, and I find that my bronze sales are going up. So I'm making more bronze pieces. That's a great thing, finding that those are taking off. And I think it's a couple of reasons: one, the dollar is going on and so we're selling more to overseas buyers, these people in France, Germany, and Japan, and Spain and England that are buying—they're becoming cheaper to them each month. But when we start seeing bronzes going up, this is peoples' fine art. And I think if they approach it with making the statues a little more like fine art, then that gap is going to be bridged more. It is happening, I think it's just tough.
JUSTIN: And Jerrod, you guys started out doing garage art. Do you guys find that you're being recognized more as artists now?
JERROD: Well, I hope. Really, what I would want to say is, when you asked about the toys going more towards fine art, Clay has had maybe more of an effect than anyone on that because of the women he's done. Clay's women have made people think more seriously and made it more fine art and it's getting better and better. And the two Erics with their action figures, they changed the whole course of what action figures look like. It's an honor to be up here with them.
BRANDON: And also, I would say that Norman Rockwell was doing magazine covers. Frank Frazetta was doing book covers. That wasn't looked on as great art. Is Frank Frazetta a fine artist? Hell, yes he is. That's the martial art of his time. Mozart was doing pop music at that time. So my point is, does fine art Artist X, he might have a piece at ten peoples' houses. Four Horsemen, Clay Moore, have pieces at thousands and thousands of peoples' houses. I just don't think there are that many painters out there who are better painters than Alex Ross. They may be doing abstract stuff, they may be really good. But I just don't think there's big of a gap. I think you're seeing fine art in pop culture right now. With the sculptures, the paintings, the culture—a lot of it's fine art.
CLAY: That's why there are so many collectors, this is your fine art. That's what you hang in your house and you put on the shelves. Like with that Hercules, I don't know who manufactured it, I really don't.
JERROD: That was mine. [Laughs]
CLAY: I guarantee it wasn't. [Laughs] But the statue companies need to know that this is their fine art, this is what they want to show their friends and have them say "I can't believe I got this statue" because it was planned with a real aesthetic in mind.
JUSTIN: Robert, you do high-end collectible dolls as well. Do you approach it from thinking about it as art when you start trying to figure out the look of it and what design you're going to do?
ROBERT: I've always looked on what I do as my art. I don't care who defines it as junk or whatever, I don't care, because it is my art, that's how I express myself. I've always hated those kind of labels. The most beautiful thing I've ever made, something that pleases me during the process, if I can do that, then I'm happy. And then if it sells I'm happy. I did want to say one thing, going back to… I'm kind of in both areas, toy thing and doll thing, and I think I'm very upbeat about it, and we as a company are very upbeat about it because we see a lot of crossover. We see doll people going here [to comic conventions], and some of our collectors are here, I see some of the toy people coming to our doll thing, I see people that weren't buying whatever that are now buying, I see people focusing their collections. I think it's a very healthy and exciting time to be in this business. And the other thing that I've seen, talking about the Orient, is that there are incredible artists over there, that we take in… that I take for granted. And the trends, we don't know what kind of art goes into it, those guys are starting to do their own models and it is amazing, it's absolutely amazing. And I think it's going to make us all better. We're going to be competing not only with ourselves and with other companies but also with the people who used to make our product. I'm excited about that. | |  AUDIENCE QUESTION: Direct to consumer purchases, not having to go to the local comic book shop. How has that affected your relationship with the consumer?
DAMIEN: We just started the beginning of this year, and hopefully it'll turn out great for everyone.
JUSTIN: What led to your decision to start doing it?
DAMIEN: Just to branch out more and get it to more people and the fans were requesting it so much.
JUSTIN: Scott, you guys have been selling exclusively direct to consumer for a while now?
SCOTT: Yes, we do exclusive so the first 100 pieces of any run will have like one extra piece you can only get through our website. It's a good benefit because the customers can buy directly from us, so if there's a reason for them to want to return it, some kind of problem we can take care of it directly with them, so that's a little bit easier on the customer. The main reason we do this is that years ago we did much more local sales and then countries all over the world, so we went through hard times and it's really difficult to get yourself set up so you can actually distribute to other countries, and it takes a while.
RANDY: I think it's great. I don't own the company [NECA], unfortunately, I wish I did. We spend so much time and effort on everything, and I want as many people as can be exposed to it to have the opportunity to buy it. I'd sell it everywhere, I'd sell it on our website, I'd sell it at Toys R' Us, I'd have it at KB, I'd have it everywhere. Because of certain terms that retailers have about marketing and returns, the owner of the company won't sell to some of these accounts, and also doesn't want to get involved in direct to consumer, just speaking for our product lines because everything is entirely injection-molded, it's all ABS and PBC plastic, which involves steel tooling—it's very expensive and I think the way things are going, with the rise in labor costs and tooling costs, it's hard for us to try to cut out the middle guy because no matter what, there's just not enough of them. There's not enough people out there you're going to find who are going to buy off the Internet, and that's the problem. For us, there's some things that we don't make any money on, or we break even on, and every once in a while we'll have something that sort of transcends, like we do a video game license and it just goes beyond the core collector and it's just this kid who plays this game all the time, sees this toy at F.Y.E. or Hot Topic or whatever, they'll buy it and they may have never bought any of our toys before and they may never again, but those are sales that we get. Last year, 300 became this humongous blockbuster. We had a shortage of King Leonidas, no one could care about Queen Gorgo, or the hunchback, or the Immortal—everyone wanted Leonidas. And it wasn't you guys—we love you guys, we know you're the reason we have jobs. But I'm saying the guy who goes out and watches Sunday football would go out and buy Leonidas because here's this cool heroic guy who's totally ripped and kicked everyone's ass. He wanted that toy. Those are the things that you can't get by doing just direct to consumer, they're not going to find you, so that's the challenge for us. We're going to be doing some stuff that's a little more specialized up here, like smaller runs. Certain of the stuff that Sideshow does, certain of the stuff that Robert does that's a little bit more a few hundred pieces, few thousand pieces—our runs have to be well over 10,000. We're getting to the point now if we can't sell 20,000 of a figure we can't even justify doing it anymore. And it's sad, because there are figures that we made two or three years ago that today, I never would be able to make. Like Dawn of the Dead, just some cool old stuff, but now it's not economically possible.
AUDIENCE QUESTION: I just want to know what you guys think of what's going on in the industry as far as digital sculpting.
CLAY: I like being able to push the material around and work with my hands. I can't say I'm not going to do it, dabble in it, but I can say that at this point, I don't see it. Maybe I'll be that 80 year-old guy who they say, "Yeah, he still sculpts with his hands!" That may well be what ends up happening. But I see these things with cast systems and I can't escape from the feeling that they're cheating. And they sort of look antiseptic, there's something dead about them.
JUSTIN: Chuck, you guys use both, right? Digital and sculpting?
CHUCK: [Sarcastically] Yeah, thanks. [Laughs] If you're talking like ZBrush or something—yeah, they love that. There's a studio in California that loves that, and it's the next thing. I'm a little… I'm not a sculptor, so I don't have that same feeling of pushing stuff around and getting my hands dirty, but as far as ZBrush I have not seen, and if they're in here, I haven't seen it anywhere near the level it has to be to be usable. As far as armature and all the basic anatomy and all that stuff, I see the benefit. What we do is we use a lot of the digital technology, like scanning. We are very, very, very dependent on scanning at this point. And okay, guys—it's not going away, it's not a fad. We have a major licenser that mandates we use scanners at this point. And we've got scans of a certain actor that's 40 years later, and we've got guys who use a scan from 2 months ago. So there's so much manipulation that had to go into it anyway, and it feels like you could have done it from scratch faster, and just like you guys use your old dentist tools and you modify them for sculpting, a scan and a visual printout—it's not done. It's not a piece, it's not push a button, resize, go, here's a toy. It's not like that at all. If I give you a hammer and say go build a house, you're just going to hurt your hand a lot and not have a house. That's what a scan is and that's what that stuff is. There are certain guys who I work with that handle that very well, that can add expressions and realism to it. The stuff comes out really yakked. There's no hair, the hand doesn't look right. I know Randy uses it. [Randy shakes his head] You don't have any scanning at all?
RANDY: No way. [Laughs] There's none. I think some of the guys who do use it, they turn out some decent product. I'm not going to be a hypocrite, there's some Gentle Giant stuff that I have purchased myself that I like the look of. Usually it's the stuff that's more armored characters, like Star Wars and stuff or it's not a facial likeness. You're probably the biggest pusher for that bit of work of the technology.
SOMEONE FROM THE CROWD: JAKKS uses them for their wrestlers.
RANDY: Yeah and those wrestlers are ugly, they look like garbage…it's true. They're bad, they've been bad for years.
CHUCK: I think the new stuff is bad, but I thought the old stuff was really bad, and now with the scanner I think it looks better. The new stuff's kind of bad, but they made wrestlers who look like wrestlers, and before they didn't—they were just guys. But they used crappy talent, and it's all about the talent.
RANDY: I don't know, when I look at what's out there digitally, there's nothing that I've ever seen that compares to what guys like Eric do, or what Kyle and Jason do in the back. It's also a mental thing that a computer's never going to be able to do, where these guys know what they need to dial in on, maybe push it a little further, maybe bring it back—a scan is only going to give you what's there and the art that comes out is not distorted, and not tweaked but just what's there. There's things you have to accentuate and things you have to be a little more subtle with, and when you see it, it clicks. That's what makes a likeness pop. And in a way it's like doing a caricature but knowing how to manipulate it so that when someone sees it they make the connection like, "Hey, that's the guy." A computer's never going to do that for you. And we're all for using technology when it's there. I don't think it's there. We may try it with some weapons here and there, it's something that we're considering now, especially with the video game stuff we're doing, get the digital data because that's how they're going into the computer anyway to animate it, but if we're doing faces and people and having something that looks dramatic with a sense of movement and all that, the computer just strips that away, and to me it's completely useless.
JUSTIN: I'd be really interested to see… You look at where computer animation was 20 years ago, but if you look the stuff that Pixar does, there's no way that you can argue that it's not art, because they pack in as much character and subtlety as hand-drawn animation, arguably. I'm wondering if there's someone now coming up who will be able to take this digital animation and apply a real artistry to it the point where you can get to that next level and it's not just a scan whatever… where you can actually take it and go somewhere with it in the artistic realm.
ERIC: Actually, you brought up Pixar—as a sculptor, I really don't want to have any part of it. But there's something to be said for, if you're going to be doing a Buzz Lightyear figure and it's already digitally created in a Pixar computer, there's something to be said for doing the output of that and using it. And as a sculptor it's not something I'd want to sculpt anyway. It's probably going to get to the point where…I don't know if they're going to take over the hand sculpting, but I think there's going to be a place in time where it'll become invaluable. And the hand-sculpting guys…I don't think that's going away. I hope.
SCOTT: Another thing is that having a business and making that decision is a huge investment. It may pay for itself as a tool, whether or not it's an effective tool is questionable, but to take that leap and say, "This is the direction I'm going," we're talking about thousands of dollars because it's not just the machine, you have to get the software, you have to have the engineers who are going to work on it, and the printer, as well as sculptors to clean up what's finished. So it's not just bang, boom, done. It's not a fax machine. It's extremely high dollar amount that you're going to have to invest in something.
AUDIENCE QUESTION: With the high price of oil for plastics, has there been a push to find other materials to make the toys out of?
SCOTT: There's actually… right now in China they're trying to find a way to recycle materials and use those for bottles but it hasn't been proven yet. I've heard a couple of factories say, "We're trying to stick with recycling plastics" or whatever, but unfortunately the quality won't be there, so I haven't seen anything brand new.
RANDY: There definitely isn't anything brand new. Speaking about the recycling, we've had a couple of I guess less ethical factories use and recycle and regrind stuff without telling us, and we get the samples and they're all tweaked and they're soft and faceless, like crap where before it was beautiful and sharp and now it goes to the toy and it's gone. That's another thing—someone asked me before about moving outside of China. It's hard enough in China. You think there are tons of factories that are doing the stuff, but you can count probably on one hand the amount of factories that are out there that can do it to the level that we need it to be at, that you expect it to be at. And all of those guys, for them it's a business. They're not collectors, they don't care what they're making they have molding machines and if someone came in there and had an order for a dog dish or some Tupperware, that was like a million pieces, we'd be out the door because it's a hell of a lot easier, they don't have some Americans screaming at them about quality control and deco. It's really really tough. It's amazing we're able to make as many figures as we do now. All of us collectively every year… I think it's come to the point now where it's like survival of the fittest. There's companies like Palisades who are awesome, great product, all the people who work there were great, and just pieces fell apart unfortunately with retail, with their own IP at the wrong time, so unfortunately they're not around. There's a few others that I can see and I don't know if those guys are long for this world, just because of how tough it's been, how much we've all had to tighten our belts collectively to still do what we're doing.
CLAY: I never really considered making the statues out of other materials because the amount of petroleum products that we're using in this industry is miniscule compared to consumer goods and all of the plastics that are made, so… We would probably be subject to the changing industrialization and less use of petroleum products as we run out of petroleum products. I think there are a lot of composites that are coming around, we're starting to look into natural materials again, maybe a use of sawdust. They're starting to use, for example, I think it's Sweden, they use basically organic goods and just sweepings of leaves and sawdust and people bring it and they use it to fuel their city. I can see that happening as these composites are being developed and you can mix them with sawdust—that's a possibility. I wouldn't be at all surprised because petroleum's a finite resource.
JUSTIN: That's all we have time for. I'd like to thank everyone on the stage. | | 
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