Videoage International October 2017

44 October 2017 V I D E O A G E C anadian production companies have emerged in the last few decades as leaders within the international animation sector. Threeof Canada’s animationproduction studios were asked by VideoAge to give their input on the main strengths of the country’s animation sector. Executives from Wow! Unlimited Media, 9 Story Media Group, and Nelvana Studios discussed the unique aspects, challenges, and trends facing the Canadian animation industry. For Michael Hefferon — president of Vancouver-based Rainmaker/Mainframe Studios and executive vice president of Wow! Unlimited Media — the reasons for Canada’s global position in animation include its status as “one of theworldwide leaders in producing and distributing animation around the globe. The production quality, the size of the Canadian animation industry, plus our technical innovation and ability to co-finance, makes Canada a strong partner.” Vince Commisso , president and CEO of Toronto-based 9 Story Media Group, added: “There is tremendous creative talent within Canada, across writers, designers, storyboard artists, animators and directors. There are several outstanding animation schools within the country that have been graduating world-class talent. “As a country, we don’t tout the strength of our creative talent enough. There are many Canadian production companies doing great work right now in the kids’ space,” he said. “We are all storytellers at heart and our main goal is to bring these stories to a wide audience,” said Athena Georgaklis , head of Development at Toronto-based Nelvana Studios. Georgaklis emphasized that both global reach and the compatibility of co-production partners are vital: “financing capability and broadcaster support are essential as well, but the best partnerships would have the show’s best interest in mind. Partners with global distribution, such as Disney, Nickelodeon, Cartoon Network, and Netflix can be an important component to the overall success, especially for productions that will have associated merchandise.” Wow!’s Hefferon noted the importance of international law to the growth of animation in Canada: “If the plan is to maximize the subsidy opportunities in Canada, then the co-production partner must be from a treaty country. Those countries that also have good subsidy programs, or support from broadcasters in their home country, are also key factors.” Canadian animation studios tend also to be in agreementonthebenefitsof thecountry’sproximity to the United States. “Overall, it’s an advantage,” commented Georgaklis. “Our proximity to the massive U.S. market gives us an opening to potential broadcast and studio partners, as well as talent in front of, and behind, the cameras.” “Plus, British Columbia’s proximity to Los Angeles, for example (Vancouver/L.A. sharing the same time zone, being only a three-hour flight away), makes studios like Rainmaker/ Mainframe strong partners for U.S. productions,” Hefferon said. Commisso added, “Working with U.S. broadcasters and digital partners opens our eyes to what content is exportable, which further helps our international distribution endeavor.” He continued: “Not only has Canadian animation benefited from a relationship with its U.S. counterpart, the country’s studios have excelled because of generous government subsidies and media funds.” Hefferon gave an overview of the types of subsidies Canadian animation companies receive. “There are various subsidies/incentives for productions in Canada,” he explained. “It also depends on whether or not the production is a Canadian content production, which includes co- productions with companies from countries who have an official television and/or feature film treaty with Canada.” “ACanadian content production receives higher tax credits both on the federal and provincial level,” Hefferon pointed out. “In addition, there are various media funds, including the Canadian Media Fund and the Shaw Rocket Fund.” Georgaklis concurred and added: “Telefilm Canada is an integral supporter of Canadian content and administers a number of funds like the Canada Media Fund. Shaw Rocket Fund is a huge supporter of kids’ content and has helped finance a number of global hits.” Regarding tax breaks, Hefferon said, “The federal content tax credit is 25 percent while the production services tax credit is 16 percent. Provincial tax credits vary from province to province, as do the rules to qualify. Rainmaker/ Mainframe Studios is based in British Columbia, which has one of the higher tax credit rates in Canada — 35 percent Canadian content and 28 percent production services, along with the DAVE [Digital Animation Visual Effects] tax credit at 16 percent. All of the tax credits for BC are calculated on BC Labor.” Hefferondetailedtheprocesspotential foreignco- producers might undertake to work with Canadian studios: “As mentioned [before], to take advantage of the Canadian content tax credits, the foreign co- producermust be froma country that has an official production treaty with Canada. Treaties vary from country to country. The production services tax credits can be accessed by any foreign producer regardless of whether or not their country has an official treaty with Canada.” To take advantage of tax credits, Hefferon stressedthat,“It’simportanttoworkwithpotential Canadian partners as early on as possible in order to develop programs and a production split that will maximize the Canadian incentives program, including qualifying content of enhanced licensing fees fromCanadian broadcasters — this also contributes to production financing.” As the co-production benefits depend on which countries have Canadian production treaties, different business models apply. “The models adapt to the territory according to license fees, industry support, and tax credits,” explained Georgaklis. On using different business models for different territories, Commisso said: “We used to rely on two or three business models when the majority of our shows were greenlit out of Canada. “But, as we become more global, with studios Canadian Animat ion Telefilm, Tax Credits, Treaties, Talent: The Four “Ts” of Canada’s Triumphs “Kids today are no longer sitting back and passively viewing content. They are actively involved on mobile devices and form a stronger connection to content they become vested in.” Vince Commisso of 9 Story Media Group (Continued on Page 46)