While the attempt by competing u.s. majors to loosen Disney’s stranglehold on the animated feature market is still a work in progress, Canadian animation companies are suddenly much less enthusiastic about the opportunities for independent animated Canadian features.

Less than two years ago a bevy of Canadian animation companies were claiming to have at least one animated feature in development, but only Toronto’s Nelvana has gone ahead with its feature plans to date, while Vancouver’s Mainframe waits for the backing of a u.s. studio before greenlighting any of its roughly four features currently in development.

Canada’s other toon powerhouse, Cinar of Montreal, appears to have put its feature plans on the back burner, at least for the time being.

‘Without the Disney label plastered all over your posters, it’s a very, very tough market to break into,’ says Nelvana cofounder and senior executive vp Clive Smith, who says Nelvana is aiming to produce one or two features a year under its new feature division. ‘We’re not in a position to put $50 million to $60 million into production and then match the same amount for advertising,’ he adds.

Smith says Nelvana’s approach to the toon feature market is to make films as coproductions with established characters at a modest budget of us$5 million to us$15 million.

‘We can see a return without a huge amount of promotion going into that,’ points out Smith, who directed Nelvana’s reentry into the market with last year’s Pippi Longstocking. ‘Obviously part of the strategy is that the video market is going to pick up the slack after a modest theatrical release.’

Currently in production on its second Babar feature, Smith says Nelvana has scaled back on its development of a feature version of Brit character Rupert, but has ramped up development on projects such as Little Bear and Franklin, both of which are Nelvana series characters.

New in development but looking likely to be produced is an Anne of Green Gables animated feature, based on a musical from Don Harron and Norm Campbell. Nelvana is aggressively seeking a Japanese coproduction partner on the Anne project.

Analyst Roger Dent of Toronto’s Yorkton Securities sees the opportunities for animated features as limited, but agrees with Smith’s strategy.

‘It’s important to have these products presold and to have good distribution on the video side. What Nelvana has done is work on films with proven titles,’ says Dent, who believes that indie toon features simply don’t have the distribution marketing budget to create hits around non-established characters and titles that some u.s. majors are producing.

‘The name recognition that you would want to drive video sales – because that’s the critical thing – may not be there, so looking at established titles is pretty important,’ offers Dent, who favors presales to finance productions. ‘It’s critical to be able to make good presales. Nelvana has been able to do that, and I think Mainframe, in order to go ahead, will want that in place.’

Indeed, Mainframe’s director of communications Mairi Welman confirms that the search for a solid distribution deal with a u.s. major has partly delayed the cgi company from making the jump to features.

Negotiating a deal with a U.S. major will no doubt be made easier now that Mainframe is repped by Hollywood power agency William Morris. The agreement was revealed at Playback press time and will see William Morris VPs Paul Bricault and Steve Weiss as well as agent Billy Goldberg exclusively represent Mainframe in feature films and television.

‘The essential part of the deal is having a u.s. studio involved,’ says Welman. ‘You want to have a big distributor behind your film. You’d want to have a merchandising program and a direct-to-video link to it. You wouldn’t just throw it out in the theaters and expect it to make the money there.’

Welman also says that a significant shift in financing philosophy would be needed to produce a project longer than a tv half-hour.

‘It’s a different ball game,’ says Welman. ‘In tv you’re paid upon delivery; in feature film you probably would want to be paid on milestones because the project is so much longer and you have to pay for so much of it as you go.’

With roughly four projects in development, including a coproduction with Microsoft cofounder Paul Allen’s California-based Storyopolis on Sign of the Seahorse, based on the best-selling Australian children’s book, Welman says any one of the projects could begin rendering first depending on which scores a u.s. presale.

‘Trying to get a distributor is the issue, that’s why we haven’t made one yet,’ says Welman. ‘We need a distributor who can do the p&a. We’re not going to self-finance and just do a movie and hope for the best. It’s really important that you have all your pieces in place before you go into production.’

Mainframe’s position as an independent cgi studio of significant size has allowed it to entertain production offers and wait for the right one before beginning its first foray into features, which would require a 50% staff increase of approximately 100 bodies and a proportionate number of workstations.

The venture would also require technical leaps, which were partly worked out when Mainframe produced an Imax Ridefilm based on its tv series ReBoot.

Welman says Mainframe will be closely monitoring the box-office performance of two upcoming studio cgi features, A Bug’s Life (Pixar/Disney), slated for a November release, and Antz (DreamWorks), skedded to hit theaters in spring ’99.

With a suddenly crowded feature toon market offering little chance of being noticed beside studio offerings, some small Canadian producers are opting for the direct-to-video route with feature-length projects.

Ottawa’s Amberwood Productions along with Toronto’s The Film Works are developing the feature-length, direct-to-video project The Wild Swans, based on the Hans Christian Andersen story.

‘In order to break the stranglehold of Disney, you have to have rather large budgets to achieve a lavish look on the screen,’ says Amberwood principal Sheldon Wiseman. ‘The trick is to see if you can do a theatrical-looking property that plays well on the tv screen, done at a fraction of the cost for what you would need for theatrical.’

Wiseman believes theatrical features are something smaller companies should avoid.

‘You can partner with somebody and do service work on features, but for a smaller company to attempt to produce an animated theatrical for release in theaters just doesn’t make sense,’ says Wiseman, who pegs The Wild Swans’ budget at around $4 million and hopes to begin production this fall or spring ’99.

And if the domestic box-office performance of Nelvana’s Pippi is any indication of how tough things are for Canada’s animated features, then it’s no wonder so many tooncos have suddenly shied away from the theatrical market.

While Canadian distributor Behaviour was able to secure a nifty wide release for Pippi – some 30 screens – from Cineplex Odeon during winter school break in French Canada, where the film took in $400,000, Behaviour’s English Canada release was essentially non-existent, getting a ‘cursory’ release.

‘In Behaviour’s judgment, Pippi did not merit a theatrical release in English-speaking Canada,’ says Andy Myers, senior vp and managing director of Behaviour’s Toronto office. ‘The inherent cost in releasing this kind of film properly is significant.’

Myers says Behaviour sees very few animated properties and is not actively seeking animated features. The distrib exec sees the elements needed for a successful animated feature as similar to those for a live-action movie.

‘The animation has to be state of the art, the script has to be great, and the characters well drawn – both literally and figuratively. The moviegoing public will accept nothing less.’

Myers is excited, however, about the feature-length version of Nelvana’s cgi series Donkey Kong Country, which Behaviour will be releasing on video this fall. Myers will be working with Donkey Kong’s video game distributor Nintendo as well as other promotional tie-ins for the launch.

Pippi took in about us$700,000 in the States, and Smith admits Nelvana doesn’t generally expect more than 20% of a film’s revenues to come from theatrical box office, but remains confident that hits are possible.

‘It can happen, look at Care Bears ($50 million gross), but you’ve got to have some kind of promotion behind it.’

Pippi also sold nearly a million tickets in Germany where the character is better known, but unfortunately for the Canadian producer, the German rights to Pippi were held by copro partner Trickompany.

Trickompany has recently enjoyed strong domestic success with adult-aimed animated features such as The Little Asshole and the popular Werner features. Werner is a domestic hit franchise in Germany.

But while Nelvana continues to develop its more adult-aimed version of Barbarella, analyst Dent sees animated features aimed at an older audience as an even riskier venture.

‘You’ve got a challenge in developing a market,’ says Dent. ‘In children’s animation, if you’re doing a movie based on Babar, you’ve got a built-in audience. For adults, if you’re basing the movie on The Simpsons, South Park or Dr. Katz, that’s fine, but anything else and you’re developing a character from scratch.

‘It’s no different than doing a live-action movie from scratch, although you have the added complication that you don’t have an established record of adults going to animated movies.’

Upcoming animated feature films sampler

– Prince of Egypt, DreamWorks skg Nov ’98

– Rugrats The Movie, Nickelodeon/Paramount – November ’98

– A Bug’s Life, Pixar/Disney Nov ’98

– Beavis and Butt-head Sequel, MTV/Paramount Dec ’98

– Rudolph Reindeer Movie, Goodtimes Entertainment Holiday ’98

– Rocky and Bullwinkle, Universal ’98

– Babar, Nelvana/Ellipse/tmo first quarter ’99

– Antz, DreamWorks Spring ’99

– The King and I, Warner Bros. Spring ’99

– Road To Eldorado, DreamWorks Holiday ’99

– Toy Story 2, Disney Holiday ’99

– Alvin and The Chipmunks, Universal ’99

– Elmo In Grouchland, Sony/ctw June ’99

– Anne Frank’s Diary Of A Young Girl, Global Toon Network/apmi (searching for Canadian copro partner) in development