Disney’s ‘Moana 2’ is a monster hit. But some in the animation industry aren’t happy

As Disney confirmed on Monday, Moana 2 is a huge success. The film’s staggering $389 million holiday-weekend gross marks the highest global opening of any animated film ever.

Considering this sequel followed such animated juggernauts as The Wild Robot, Despicable Me 4, and Inside Out 2 into box office Valhalla this year, members of the animation industry should probably be thrilled right now. Instead, as much as Moana 2’s success underlines the vast public thirst for family-friendly theatrical releases, it also puts a spotlight on one of the critical issues U.S. animators are currently grappling with: outsourcing.

As The Hollywood Reporter noted earlier this year, the top threats to animation’s future are a new problem and a rather old one. First and foremost, the burgeoning field of AI tools, such as OpenAI’s text-to-video model Sora, have incited panic. They can cough up footage in an instant that might take animators hours or even days to create.

A January study surveying 300 entertainment industry leaders estimated that nearly 204,000 positions could be adversely affected by AI over the next three years, including many in animation. But while the Animation Guild recently reached a tentative deal with studios to put some guardrails around AI—two days before the November 27 release of Moana 2—the deal reportedly offers no protections against the other major problem, outsourcing, which has long been chipping away at animators’ job security.

The Animation Guild’s 1979 strike raised awareness around what was then called “runaway production”—the practice of moving work on U.S. projects to countries including South Korea, Japan, and eventually Canada. It had been going on since at least the 1950s, when the creators of Rocky and Bullwinkle got their inking and painting done at a studio in Mexico City, according to Drawing the Line, Tom Sito’s 2006 book on animation unions. Although the 1979 “runaway clause” technically guaranteed local employment before work could be subcontracted out of Los Angeles, where the industry is centered, studios found plenty of loopholes over time.

A lot of TV shows are now animated outside the U.S.—Rick and Morty at Bardel Entertainment in Vancouver, for instance, and Arcane partly at Fortiche Production in France. Foreign animation workers tend to come cheaper due to huge tax incentives and the lower cost of living in other countries. Outsourcing has gradually trickled into practically every major studio, with even the reluctant Dreamworks announcing in October that it would “outsource some of our asset and shot work to partner studios in tax advantaged/lower cost geographies.”

But some animation studios mainly outsource work on TV shows. Feature films instead often have a broader scope, higher budget, and expectations for a certain level of quality, all of which make it easier for U.S. studios to stick with a domestic workforce. One film that was animated in Canada nearly a decade ago, though, revealed the kind of working conditions nonunion animators can face.

Seth Rogen’s 2016 foul-mouthed food-based flick Sausage Party relied on the nonunion Canadian production company Nitrogen Studios for its animation. Those who worked on the box-office hit later complained about unfair conditions. The studio reportedly pressured artists to work extra hours for free, citing a legal loophole for “high technology professionals” that made them ineligible for overtime. Although those workers, after years of litigation, eventually won fair compensation in 2019, the incident drew attention to the pressure animators are put under to deliver a high-quality product on time—especially without union oversight.

In 2020, Disney announced a streaming-TV spinoff for its 2016 hit Moana—and in 2021, it designated this series as the first project for its new Vancouver studio. Unlike its counterpart in Burbank, the Northern studio would not be subject to any Animation Guild regulations. (U.S.-based Disney animators only voted to unionize in November 2023, eight months after the studio initially denied their request to voluntarily recognize the group.)

The Vancouver studio was reportedly conceived as a cost-effective way to “focus on long-form series and special projects for Disney+.” Back in February, however, Disney announced a November release date for Moana 2. CEO Bob Iger was reportedly so impressed with footage from the would-be streaming series, he ordered a pivot to feature film. Disney’s Vancouver outpost would be the lead studio for Moana 2, contradicting previous reports that Burbank would remain “Walt Disney Animation Studios’s exclusive hub for feature film projects.” (Fast Company has reached out to Disney for comment on its plans for future Vancouver projects, and will update the story when the company replies.)

Animated feature films take time to get right. The original Moana, for instance, took five years to develop and produce. The unusual process for its sequel seems evident in its quality. Reviews have been mostly positive, but many echo Boston Globe critic Odie Henderson’s sentiment: “While the animation is often stunning, the overall result is a throwback to those inferior direct-to-video sequels Disney used to churn out for The Lion King and Aladdin.”

Disney’s path to outsourcing a major animated film had animators fuming before its release. “It feels to me like Disney is trying to put out a TV series they turned into a movie, and they’re trying to slap on the Disney animation name and see what they can get away with,” artist Zach Mulligan, who has worked at DreamWorks Animation among other studios, said in an Instagram reel. Now that Moana 2 has smashed box office records, the incentives are obvious for Disney execs to potentially shift even more work to Canada.

Will the company do so with more film projects in the years ahead, rather than just more series for Disney+? For now, animators can only draw their own conclusions.