Despite box office hits, demand for animated films has stalled out

Consumer demand for animated content has remained stagnant over the past two years, despite the onslaught of animated box office hits, according to data pulled for Axios by Parrot Analytics.

The big picture: "Animation, especially adult animation, is a category that was mostly overlooked as 'peak TV' output increased, so one could argue it is underexploited today," says Matthew Ball, the former head of strategy for Amazon Studios.

• "Regardless, it tends to be much cheaper than premium live content, and it's certainly more insulated from cost escalation versus such content."

Between the lines: Michael Dempsey, a venture capitalist at Compound, says that a few macro trends could increase the demand for animated content.

1. "The digitization of animation and the scalability of it thanks to new technology is bringing the creative barrier to entry down, allowing more studios to create better animation. You can already start to see a higher volume of animated content being pitched."
2. "Also, consumer understanding of animation is increasing. You're starting to see willingness from adults to see animation as a genre for adults, like drama-based animated series."

What's next: In an essay in animation, Dempsey argues that we're going to begin seeing technologies used in other industries, like face-tracking and machine learning, be used to create hyper-realistic and compelling animation.

Go deeper: Disney remains box office champion of animated films with Frozen 2