On Jan. 1, 1995, things were looking good. Money and activity was steadily pouring forth from the public companies; eight new specialty channels were switched on with great hopes; and pipe dreams of reigning victorious in the star wars of satellite delivery danced about in deliverers’ heads. There were problems, but the forecast looked promising.

There was good news in 1995, whether it was the newly arrived $47 million Cable Production Fund dished out to primetime Cancon material, the continued growth of such public companies as Malofilm Communications, Nelvana, Alliance Communications and Cinar Films, the new injection of $17.5 million into the Shaw Children’s Program Initiative, or the promise of a new bank suitor in the form of the Bank of Nova Scotia.

Pivotal technological advances were made in digital production while post-production houses reaped the benefits of a steady trend toward post-heavy projects.

In effects news, the frontier of digital hair, the last hurdle to reproducing convincing copies of the human species, was crossed, and the feat was proudly displayed by Toronto-based Calibre Digital Design in its Finesse tv spots.

The amount of money being spent in the post/special effects area by film and tv producers can be gauged by the investment in tooling up for digital production made by many post/production companies. Vancouver-based Rainmaker Digital Pictures, the parent created in April for Gastown Post, Gastown Labs, Rainmaker Interactive and Rainmaker Imaging (Kodak Cineon owner), demonstrated the growth potential of this sector when it successfully joined the publicly-traded company crowd this year.

Americans have also been scouting for technology acquisitions. Early this year, Calif.-based Silicon Graphics announced a major $500 million stock/swap acquisition of Alias Research and Wavefront Technologies. The mergered 3D software company would be based in Toronto with offices in Vancouver and Santa Barbara.

Another American giant, Microsoft, cut a stock exchange deal with Montreal’s best known 3D company, Softimage, worth an estimated $130 million.

Digital buy/sell fray

Also in the digital buy/sell fray, Discreet Logic purchased The Brughetti Corp. this spring, followed up with a $40 million share offering. After listing on the Nasdaq, they were back to raise more money this fall in the u.s., and virtual set technology was among its recent acquisitions.

Pure digital production (such as Vancouver-based BLT/Alliance’s Transformers Beast Wars) and cgi-intensive hybrids (such as Halifax’s Salter Street Films’ German coproduction The Dark Zone), continue to render up a storm on both the commercial and long-form side of the fence.

There’s a lot of new animated projects starting up here from companies on both the digital side, and the traditional, like Toronto’s Phoenix (which got a new lease on life when purchased by Catalyst this year).

New media, questioned as a viable market by some producers testing the waters, was nonetheless an area of expansion, and provided both a useful marketing tool and some ancillary revenue in the form of a further licensing vehicle.

Astral and Malofilm both upped the ante in new media this year. Astral acquired 35% of Ottawa’s Artech Digital Entertainment at a maximum cost of $3.1 million, while Malo delivered the news it had acquired all shares of Quebec City-based Megatoon Entertainment Group.

And while convergence is still under construction, the internet provided producers and organizations with a fast and inexpensive marketing/interactive communications device; and fan sites provided some stats that helped renew and develop some indigenous series.

Exhibitors, facing a poor year at the box office, nonetheless decided to plow ahead with major plans for building and expansion. The theory is people will come if you spice up the moviegoing experience with other forms of entertainment such as video games, simulator rides and shopping.

Then there was the bad news – unfortunately a long list.

Perhaps most significant this year, labor disputes threatened to bring much of the industry to a standstill, and although the issues were settled without serious injury, the aftershocks were felt in the form of a brief slump in foreign investment and bids from service producers.

Public funding was pared down to a shadow of its former self (with more hacking expected in ’96). Private funds such as the cpf were swamped with applicants, an issue aggravated by the prospect that broadcasters will gain access to production funds.

Intense scrutiny

Telefilm Canada, the National Film Board and the cbc considered some serious reconfigurations as one committee after another scrutinized each institution.

Alternative sources of funding for the cbc sent the Corp into competition with private audio post houses, with more plans for marketing its fancy new Toronto-based facilities to the public.

The tremendous $227 million cut to the cbc, in tandem with the threat of tvontario privatization has producers, particularly those in Ontario already affected by the ofdc budget freeze, nervously looking elsewhere. Faced with sizable union hurdles, Radio-Quebec announced a radical reorientation program this summer, saying it would lay off 40% of its staff and reassign 90% of all direct programming to the private sector and change its name to Tele-Quebec.

Staff trimmed

Telefilm faced a minor and gradual decrease in staff as insiders feared the threat of more cuts, and the nfb (although bolstered by an Oscar win) continued to trim with early retirement packages.

The good news is the three national organizations – all headless at the beginning of the year – were crowned. Former cftpa president Sandra Macdonald became nfb film commissioner, Telefilm head is Francois Macerola, and the cbc named Perrin Beatty as its new president.

Also squeezing the industry is the prospect of Turner Broadcasting and Polygram opening branch plants here. The two companies – independent of one another – applied to Investment Canada in the spring, sliding in under the welcoming existing policies currently under review.

Meanwhile, the competitive drive for Canadian-owned dth services lost precious time to regulatory concerns as the Americans continued to fortify their dth assets.

Regulatory puzzles created by the much-hyped information highway were also scrutinized by crtc officials and anxious industry leaders without much resolved at the end of the day.

And violence on tv was one of the many issues that kept organizations busy writing position papers and filing interventions with the crtc over the likes of the relative merits of the v-chip versus the potential dangers of classification systems.

Early on in the year, the new tax credit system was established and, although a welcome change that producers have been lobbying for for years, the new system was declared non-bankable, a blow, especially to small and medium-sized production companies. Due to the lateness in finalizing the legislation, the promised dual track period did not materialize in 1995, so ensuring that there will be a transition period is another focus of producers’ lobbying efforts.

Bones of contention in the arena of exhibition and distribution territorial control got meaty at the Montreal World Film Festival when Alliance ceo Robert Lantos and Motion Picture Association of America president Jack Valenti tossed back and forth the issue of Yankee control of our screens, both big and small.

The Canadian Association of Film Distributors and Exporters made some noise about the continuing government policy problem that sees Canada sold as an extension of the u.s. territory, but there was an almost inaudible response from Ottawa.

Straddling the fence of good and bad news is the impressive list of broadcast buyouts which has forever altered the television landscape for better or for worse.

Rogers’ purchase of Maclean Hunter was finalized, CFCF Inc. bought Videotron’s TeleMetropole, creating the number one private broadcaster in Quebec, and CanWest Global chair Izzy Asper made a daring $636 million bid for WIC Western International Communications in an attempt to realize his dream of building a national network.

In his first venture into educational broadcasting, Citytv head Moses Znaimer made a successful bid of $1 and became the proud owner of the bedraggled ACCESS Network. CUC Broadcasting was inhaled by Shaw Communications, and word that Baton plans to tackle ctv would certainly fit the mold for 1995.

bbs hit the ground running in April after Ivan Fecan joined Doug Bassett at the CTV Network’s largest affiliate, with sales guru Peter Robertson coming on as president of Baton Broadcast Sales.

The new management team slashed staff, reduced overhead, and geared up production for the first time in more than a decade.

CFCN buyout

Pending crtc approval, Baton will purchase CFCN Calgary giving it a 14.3% interest in CTV. Its voting-trust agreement with fellow ctv shareholder Electrohome gives Baton three votes on the seven-member board and has tongues wagging that control of the network is imminent.

On the international scene, all Canadian bids – including those made by Asper, Znaimer and Lantos – for u.k. channel itv were shut out.

With wic in play, and in the wake of the loss of its bid for the fifth British television network, CanWest is putting renewed emphasis back on home turf. Its 50% interest in Chile’s La Red Television Network, purchased in June 1994, is reportedly up for sale with speculation that the market conditions and language barriers have been difficult to navigate.

The flip side is CanWest’s 57.5% interest in Network Ten, Australia, an investment contributing $53.8 million to the bottom line for the year ending August 31, 1995. Asper is predicting higher numbers for fiscal 1996.

Generally confident

In the early days of the new year, the production community was generally confident. No wonder, since the two previous years amassed record-breaking numbers. Conservative projections said 1995 would top these figures pretty much across the board.

The referendum might have interfered with production levels in Quebec, but in hindsight, with eight series, eight features and at least two mows shooting at the time of the Oct. 30 Yes/No vote, political duress seems to have had little, if any, influence.

Societe generales des enterprises culturelles (sodec) came into being March 31 taking over the operations of Sogic and Institut quebecois du cinema. As production heated up over the summer, sodec president Pierre Lampron said the government tax credit program would inject over $50 million in production in ’95/96, up from $38 million last year.

A strategically timed threat by actra to strike in early autumn threatened to dint Quebec production activity, and Ontario was included in the mix. It was a double whammy for Ontario, which was still reeling from a sudden and unexpected government freeze of the ofdc and ofip.

Nonetheless, production numbers for the year (not finalized at press time) showed comparable figures to 1994 in both Quebec and Ontario.

b.c. continued to thrive with service production but also suffered some damage because of continued labor problems, this time with American producers showing their disdain in declining offers for location shooting.

On a happier note, while the established production communities braved some setbacks, new territories were burgeoning, especially in the Prairies, which became the location for two new series – Jake and the Kid and My Life as A Dog – as well as a number of mows and a few features including The Dog Who Wouldn’t Be.

Nova Scotia continued location and infrastructure efforts, with increased indigenous production and a new studio complex – Electropolis, being built and run by Salter Street Films, Citadel Communications and Cochran Entertainment.

In other production news, some public companies proved their durability, such as Alliance, which managed to launch into season two of Due South despite cbs’ cancellation of the series. Others were labeled with overblown projections, such as Atlantis, which had to let about 25 staff go in order to keep its head above water, and Paragon Entertainment, which trimmed back its l.a. operations and moved ceo Jon Slan back to the Toronto home base.

Increasing investment

There was no calamity, however, and the production business overall proved solid enough to continue to attract an increasing number of foreign investors. In the spring, Cinar Films announced it had completed its initial u.s. share offering garnering net proceeds of $18.3 million, and former Telefilm operative Sam Wendel was named to head up Cinar’s new l.a. office.

Ad revenues were steady for regular broadcasters, but the new specialties suffered after a negative-option campaign, led by Rogers, incurred the wrath of consumers. Complaints from the production community about the licence fee levels paid by the specialties have been continuously grumbled but nothing has come of it.

The specialties have had a rough time pulling in respectable audience numbers, although the Women’s Television Network – the only new channel on basic cable – has managed (relative to projections) to thrive.

CRTC criticized

The crtc has been roundly criticized for licensing a collection of niche-market channels whose audiences are categorically obscure. The next round of hearings has been delayed; word is the market is not ready for a new set of specialties. In the meantime, the issue of payment to the specialties from the cablecos is currently being resolved.

In other delivery news, dth competitors Ted Boyle of ExpressVu and Joel Bell of Power DirecTv disputed the inherent rights Power DirecTv (with its u.s. parent) should have to a Canadian licence. It didn’t help Boyle’s cause when the federal government sanctioned open competition, a move that interfered with the crtc’s arm’s-length relationship with government in a most irregular manner. The fact that the prime minister’s son-in-law had a hand in Power DirecTv stirred the pot, but didn’t amount to a proper withdrawal on behalf of the feds.

The most surprising development in dth was the announcement of HomeStar, a dbs system backed by Shaw and fellow cablers Videotron, Cogeco, CF Cable, Fundy Cable, Moffat and u.s. satellite company Primestar. In the end, the crtc was left with four applicants for a dth licence in Canada. Hearings start in early ’96.

The fact that it was by no means a disastrous year was perhaps most apparent in the popular use of the term ‘maturation.’ It was the buzzword, as broadcasters, producers, post people, cablers and government officials referred to this significant time in the development of Canada’s film and tv business.