Who wants to make an old fashioned musical in style that was said to be out of time three or four decades ago?
There's nothing wrong with the idea: why should everything follow modern styles? This movie, looking something between "Annie" and "American in Paris" could be a homage to classic musicals. And homages are always welcome, especially for old fans.
The trouble is that this one is meant for (very) young kids, whose parents haven't been born when Gene Kelly and Vincent Minelli made their masterpieces. Maybe this could be recommended to grandparents to watch together with their grandchildren, who would probably be the first to give up a watching.
The movie often tries to look more American then average north European movie, and the ambiance is undetermined (although Reykjavik is mentioned a few times). Also most of the character's names are non-Icelandic, so the movie could be happening anywhere - obviously in hope to be accepted worldwide. But the movie therefore loses that spirit so typical for Scandinavian (especially children/family) movies.
The plot is suitable for all ages, maybe too predictable for older. Some scenes however are lovely and the idea of using music to control other people's actions and behaving is just enough surreal for such a film still not letting it become a fairy tale - but sometimes it would be better if omitted. Actors are better then the movie itself, but very uneven. Some are too caricatured and really annoying (mostly stunts, like customers in Atli's shop), the others caricatured adequately what makes them funny (like Cynthia). Both kids are great, not too sweet and irritating, not pathetic, among the best child actors I've ever seen. But I'd really like to see Regina in a movie without singing.
Not a waste of time if you can handle watching a story for kids packed in Minelli-Kelly style musicals.