The case of Phil Vischer and Big Idea Entertainment, the company that created the VeggieTales video series, illustrates many of the problems faced by successful small businesses as they attempt to grow into larger firms. VeggieTales, a computer-animated series for children, was the most successful direct-to-video series in history yet, due to a series of misfortunes and miscalculations, Big Idea Entertainment went bankrupt and was ultimately purchased by another firm. This case details the firm’s early success and the difficulties the company encountered in its attempt to compete in an industry dominated by media giants like Disney and Dreamworks.
In December of 2003 Phil Vischer was saying goodbye to a dream. Big Idea Productions, the company he had started, was bankrupt now. Only 45 of the company’s 210 employees still worked there and, in a few days, they would be packing up their offices as well. The company had seemed like a family at one time. Big Idea’s facility, located in the Yorktown Center mall in the Chicago suburb of Lombard, had once crackled with creative energy. Veggie Tales, a computer-generated animation series designed to teach Christian values to children, had been the company’s mainstay. They had sold 7 million videos in 1999, bringing in $40 million in revenue. Vischer had hoped the company would keep growing until it rivaled the Walt Disney Company as a leader in family entertainment. Those hopes were dying a painful death now. Ironically Vischer’s sadness was giving way to acceptance, even relief, as he reflected on the past decade and on his company’s uncertain future. (Smietana, 2004b, May)
Founding of the Company
Big Idea Productions had started in 1993 in a spare bedroom. A couple in a Bible study group Phil Vischer attended had lent him $60,000 to make the movie he had been dreaming about. (Smietana, 2004b, May) Vischer and his former college roommate Mike Nawrocki developed a universe of talking vegetable characters like Larry the Cucumber and spent several months bringing them to life on the computer. The two of them had written and performed puppet shows as college students so scripting and creating the voices for animated characters was a natural step.
The choice to use vegetables as characters was practical as well as creative. Vegetables do not have arms, legs, or clothing that had to be modeled and animated. Vischer had considered making his starring character a talking candy bar, but his wife warned him that mothers might not respond well to a product that might be accused of making children love candy even more than they already do. Vegetables, on the other hand, were safe. (Luscombe, 2002) Big Idea’s first movie, “Where is God When I’m S-Scared?” was unsuccessful until Word Entertainment agreed to distribute it to Christian bookstores. Bookstore employees, many of them college students, appreciated the video’s quirky, intelligent humor and played it over and over on bookstore monitors. (Gilbreath, 2002) The company sold 50,000 videos in 1994. Over the next decade, Big Idea sold more than 25 million Veggie Tales videos. Sales finally peaked at 7 million videos in 1999. Though the company had started out selling its videos exclusively through Christian bookstores, they had entered the mass market by forming a distribution agreement with Lyrick Studios of Dallas in 1998. Veggie Tales videos began to appear on the shelves of Wal-Mart and Target stores. Lyrick Studios was the company that produced the Barney and Friends series for children. Vischer had a great deal of respect for Dick Leach, the company’s founder. One provision of the distribution agreement with Lyric was that Big Idea could renegotiate the deal if Lyrick ever changed ownership. They no longer wanted to work with the company if a media giant like Disney were to purchase it. (Vischer, 2006) A legal draft of...