TECHNOLOGY, TV CARTOON POPULARITY CREATING AN ANIMATION SENSATION.

Byline: Dave McNary Daily News Staff Writer

Bang!! Pow-pow-pow!! Blam!! Crash!! Ka-ta-Boom!!

That's not the sound of the next Batman movie, but rather the coming collision of cartoon characters at the nation's theaters as an unprecedented wave of animated movies washes over the world's multiplexes in the next 15 months.

``I don't think there's ever been a time in movie history when there will be more animated product in theaters,'' said Stewart Halpern, an entertainment analyst with New York-based ING Barings Furman Selz.

More than a dozen animated movies will be released by the end of next year, an animation explosion fueled by studios' desire to cut into the massive profits from Walt Disney Co.'s cornerstone business and by the soaring popularity of TV cartoons.

Friday is zero hour in the challenge to Disney's stranglehold.

DreamWorks SKG, whose animated operations are headed by former Disney movie chief Jeffrey Katzenberg, opens ``Antz'' in 2,400 theaters - seven weeks ahead of Disney's ``A Bug's Life.'' Both are computer-generated comedies targeting the same kind of broad-based appeal last achieved by ``Toy Story,'' which generated a stunning $192 million in domestic grosses three years ago.

That's not all. ``A Bug's Life'' opens opposite Paramount's movie version of its long-running TV series ``Rugrats: The Movie'' on Nov. 20; four weeks later, DreamWorks comes back with its animated Biblical epic ``Prince of Egypt.''

Is there enough room for that much animation? The answer is a tentative yes. Early indications are that all four flicks will succeed.

``The upcoming animated movies all look very exciting and there's no reason they can't all be hits,'' said producer Bill Gerber, former co-head of production at Warner Bros. ``There's definitely a shortage of things that parents can take their kids to.''

Robert Bucksbaum, president of the Reel Source tracking service, believes ``Antz,'' produced by Pacific Data Images, represents a major milestone. ``The technology used in animation has just gone through the roof,'' he said. ``We didn't think another company could top for at least 10 years what Pixar did in `Toy Story.' It's incredibly fascinating because there's something happening at every moment and the characters feel like real characters.''

Bucksbaum forecasts ``Antz'' should gross $75 million, which will make it the top non-Disney animated film ever, replacing ``Beavis and Butt-head.'' He believes ``Rugrats'' is on track for $50 million, while ``A Bug's Life'' and ``Prince of Egypt'' should top $100 million with the former likely to go as high as $125 million.

Should that scenario play out, DreamWorks will become a full-fledged Hollywood player with a serious track record in animation and live action (``Saving Private Ryan''). What's impressive is that the upstart will have achieved what longtime players Warner Bros. and 20th Century Fox could not - becoming a viable challenger to Disney's cornerstone franchise.

``DreamWorks has a real challenge with `Prince of Egypt' to get the message out as the story of the Ten Commandments,'' Bucksbaum said. ``What parent would not want their kid to see a wholesome version of the Bible? It has incredible special effects, so they can bring in the young date crowds but it's tough to present all that in a one-minute trailer.''

If the three 1998 challengers succeed, they will have managed a towering achievement - justifying the hundreds of millions of dollars spent by the rest of Hollywood to steal Disney's thunder. And that will encourage the rivals to do even more.

Next year will be even more intense with a trio of highly recognizable Disney movies - ``Toy Story II,'' ``Tarzan'' and ``Fantasia 2000'' - due out along with Japanese hit ``Princess Mononoke,'' being released by its Miramax arm. They will face at least five high-profile challengers: DreamWorks' 16th century comedy ``El Dorado,'' Paramount's ``Beavis & Butt-head II'' and ``South Park,'' and Warner's sci-fi adventure ``Iron Giant.''

Fox will release ``Planet Ice'' in 2000, while DreamWorks is planning on ``Chicken Run'' and ``Shrek'' for the millennium. The 4-year-old studio, which promised at its founding that animation would be a key contributor to its operations, is working on seven projects.

``We will have one or two per year every year,'' said Jim Tharp, DreamWorks distribution chief. ``We really believe a good story can be told in any medium. We have an aggressive program already and we'll stay the course.''

Why is taking on Disney so important?

Other studios have watched jealously for most of the decade as Burbank-based Walt Disney Co. churned out massive profits from ``Beauty and the Beast,'' ``Aladdin,'' ``The Lion King'' and ``Toy Story.'' Wall Street analysts believe that for every dollar in domestic ticket sales, Disney takes in $3 or $4 in profits due to the enormous markets for stuffed toys and home videos.

That means ``The Lion King'' made Disney about $1 billion in pure profit. Even the relatively modest performances of its past three animated films - ``The Hunchback of Notre Dame,'' ``Hercules'' and ``Mulan'' took in a combined $320 million domestically - probably translate to another $1 billion in profit.

Chairman Michael Eisner put it bluntly last week, saying, `` `The Lion King' created an enormous amount of competition because others wanted a piece of that pie.'' And to give the best possible spin on ``Tarzan,'' he said the optimists in the company believe it has ``Lion King'' potential.

``Disney has raised the bar on expectations because they are so expert in marketing and distribution in reaching audiences other than children,'' notes Paul Dergarabedian, president of industry tracker Exhibitor Relations. ``That's why the other studios are targeting older audiences to make animation a cool thing, although it's a double-edged sword because you can wind up alienating both groups.''

Dergarabedian believes it's highly probable that the proliferation of TV cartoons, brought on by cable TV's ferocious appetite for programming aimed at children, will lead to more and more animated features.

``If kids like something, they never tire of it,'' he said. ``If they like a Disney video or a Barney video, they'll watch it over and over, although it still has to be cool and that's the challenge for the studio to figure out what's in and what's out. Kids are very fickle and they'll dump something they don't like fast, so it's a tough racket knowing how to read kids.''

Warner Bros. knows this. The studio managed a respectable performance in late 1996 from ``Space Jam'' but hopes to take on Disney suffered a major setback earlier this year when ``Quest for Camelot,'' generally viewed as a ``classic'' Disney-style cartoon, bombed. The studio spent $75 million on its first entry in feature animation; domestic grosses hit $22 million.

The consensus was that Warner Bros. had fallen behind the times with the core audience of children under 10 becoming less interested in fairy-tale type stories and more interested in entertainment aimed at teen-agers, such as the smash hit ``Men In Black.''

``Animated films take three years, sometimes longer, to develop and trends change in that time,'' Bucksbaum said. ``You used to have to target children under 7 but now that crowd is staying home watching cartoons. You can't throw a typical cartoon up there any more.''

Despite the potential pitfalls, Halpern believes the economics of animation are compelling.

``Other studios are looking to get in because you don't have to deal with escalating salaries for top-level talent and you don't have to give up points (percentages of revenues) on ancillary streams,'' Halpern said. ``The real factor, though, is the recognition that the family market is relatively under-served and that's what really drives home videos.''

Additionally, Disney has taken its marketing of animation up to still another level by releasing relatively low-cost sequels to hits like ``Aladdin'' and ``The Lion King'' exclusively for the video market, Halpern noted. ``Once you get the property out in theaters, you can you make direct-to-video sequels at a very low risk,'' he added.

Is Hollywood in danger of killing the animated golden goose through making too many films? No one seems to be worried. For example, Halpern believes ``A Bug's Life,'' which portrays ants, grasshoppers and fleas, will do $150 million and not suffer significantly from the presence of ``Antz'' any more than ``Armageddon'' - the year's top grosser at $196 million - was held back by the earlier release of ``Deep Impact.''

Halpern also noted that retailers are optimistic over merchandise related to ``A Bug's Life'' and ``Rugrats.'' ``The fact that retailers are saying they expect sales to be strong is as good a sign of encouragement as you can get,'' he said.

The analyst, who rates Disney and Pixar as buys, contends that Hollywood's seeming boom in animation is simply an adjustment of that genre to the fact that the market for movies continues to expand impressively. U.S. box office grew 7 percent last year and will rise by a projected 12 percent this year.

``Up until now, the number of animated films has stayed pretty much the same with a market share that's quite small,'' Halpern said. ``There's plenty of room for more.''

`TOONS COMING SOON

``Prince of Egypt''

``Prince of Egypt'' has been a pet project of DreamWorks SKG co-founder Jeffrey Katzenberg, who sought out religious leaders for advice on the script. It follows the life of Moses from birth through childhood in the Egyptian royal family and the journey of the Israelites to the promised land. Following the Dec. 18 domestic release, ``Prince of Egypt'' will be released within days to more than three dozen foreign territories to take advantage of the holiday season. Early buzz has been strong although the project - the first produced by DreamWorks animation facility in Glendale - has been dogged somewhat by doubters wondering just who the target audience is.

``South Park''

``South Park'' was green-lighted by Paramount in the wake of the astounding popularity of the Comedy Central cable show, which grew out of a five-minute video featuring a kung-fu battle between Santa and Jesus and produced originally as a gag Christmas card by a Fox executive. Replete with the grossest and most off-the-wall humor on TV, ``South Park'' is a major question mark as a movie, particularly since creators Trey Parker and Matt Stone bombed big time in ``BASEketball,'' their big-screen debut. On the other hand, the studio can take heart from knowing that audiences can't get enough of another gross-out comedy, ``There's Something About Mary.''

``A Bug's Life''

``A Bug's Life'' may silence critics who claim that all Disney animated movies look and sound alike. Made as a co-production with Steven Jobs' Pixar Animation, the entire film is computer-generated and revolves around a young ant named Filk who uses a flea circus to save his colony from a gang of grasshoppers. The buzz has been red hot for this project, since it is Pixar's first film since its stunning success with ``Toy Story'' in late 1995. Disney agreed last year to become a 5 percent owner of Pixar and split production costs, grosses and ancillary revenues on Pixar projects. The price tag is estimated at $60 million to $70 million.

``Rugrats: The Movie''

``Rugrats: The Movie'' is Nickelodeon Movies' first animated feature with many of the voice talents from the long-running cable TV show, including E.G. Daily, Christine Cavanaugh, Kathy Soucie and Tara Charendoff. Music includes songs by the B-52s, Jakob Dylan, Iggy Pop, Lou Rawls and Patti Smith. The story focuses on the birth of Tommy Pickles' brother, Dil. Paramount drew surprisingly strong grosses ($63 million) from another cable-to-big-screen property, ``Beavis and Butt-head,'' in late 1996. ``Rugrats'' cost a mere $25 million and has an extensive licensee program, led by Mattel.

- Dave McNary

THE FACTS

Studios are scrambling to cash in on what some believe will be a new golden age of Hollywood animation.

MOVIE STUDIO RELEASE DATE

``Antz'' DreamWorks SKG Oct. 2

``A Bug's Life'' Disney Nov. 20

``Rugrats'' Paramount Nov. 20

``Prince of Egypt'' DreamWorks SKG Dec. 18

``The King and I'' Warner Bros. March 19

``Princess Mononoke'' Miramax 1999 second quarter

``Tarzan'' Disney June 1999

``El Dorado'' DreamWorks Nov. 5, 1999

``Iron Giant'' Warner Bros. November, 1999

``Beavis and

Butthead II'' Paramount 1999

``South Park'' Paramount 1999

``Toy Story II'' Disney holiday 1999

``Fantasia 2000'' Disney Dec. 31, 1999

``Chicken Run'' DreamWorks 2000

``Shrek'' DreamWorks 2000

``Planet Ice'' 20th Century Fox 2000

CAPTION(S):

7 Photos, 2 Boxes

PHOTO (1--3--Color) Characters from DreamWorks SKG's ``Antz'' include General Mandible, above, Princess Bala, right, and Z, below.

(4--Color) no caption (Scene from ``Prince of Egypt'')

(5--Color) no caption (Scene from ``South Park'')

(6--Color) no caption (Scene from ``A Bug's Life'')

(7--Color) no caption (Scene from ``Rugrats: The Movie'')

BOX: (1) `TOONS COMING SOON (see text)

(2) THE FACTS (see text)