Canada is a world leader in the production of animated entertainment. Here, several of Canada’s leading animation companies discuss how the business is changing, who’s buying properties and how they’re being sold, merchandising as a catalyst for content, and the animation styles currently in demand.

The capital of the animation nation is Ottawa and, true to form, several successful animation companies have grown up in the valley over the last decade. One of those companies is Diane Craig’s Dynomight Cartoons.

Dynomight started with two people seven years ago. Now, with 150 employees, a raging service business and a burgeoning original content creation factory, the company prides itself on a script-to-post, in-house flow-through that even includes music and audio production.

Craig works to enable her artists’ creativity. In fact, Graham Falk, an animator for the company, was actually the creator of Dynomight’s most recent long-form animation property, The Untalkative Bunny. Bunny will take the form of 55 five-minutes that will be delivered as 13 half-hours in Canada. Broadcast partners have yet to be announced.

Craig is happy her company remains small. For her, there are many advantages to having a small shop – and good things about being large. From Dynomight’s perspective, the middle ground is something to avoid.

‘In some ways, it’s really nice when you’re a really small shop. Because you can turn down stuff, your overhead is really low, you can pick and choose, and you can compete really well, because your mark-up is not that high. The minute you bump up and you need a facility – then immediately your overhead starts to escalate,’ Craig says. ‘So then, all of a sudden, you have to take jobs at a certain rate in order to cover that, so everything changes. [At that point], if you’re not big enough, then you’re falling somewhere in-between those things.’

Toy story

Like all producers of animation, Dynomight must keep an eye on merchandising, an ever-growing revenue stream in the business. For Craig, the show should always precede the toy.

‘Traditionally,’ she says, ‘you run something, get a following for it and then you produce the toy. You have a great series, you wait a few months and make sure that it’s out there. You try and get the best network for it and then you run your major toy licences behind it.’

With her focus on the content, Craig has some tips on the hot and cold styles in animation these days: ‘Space stuff is out – absolutely gone from the agenda right now. It’s mostly not so in-your-face irreverent. It’s clever and funny and almost a ’50s revival style. Anime is starting to make itself known to mainstream animation, as well.’

Dynomight does service work for Nelvana and is currently in production on the fifth season of Franklin the Turtle. However, it is in its original properties that the company’s greatest challenges lie. Curiously, selling to the Canadian specialty networks is one of its biggest roadblocks.

Says Craig: ‘I don’t know what it is. I always sell Canada last. I sell Europe first, then the United States and then Canada.’

For Dynomight, it isn’t just the confidence foreign sales can instill in the Canadian networks. ‘That’s part of it,’ says Craig. ‘And partly, you hope that the presales from Europe can fund your project. And the rest is just coming up with gap financing. Then, you’re not subject, for example, to the fact that they have other criteria, for example, if you’re dealing with a company like Teletoon. Their first obligation is going to be to Nelvana and Cinar and then they’re going to be obligated to what they have put development money into. Then it’s very hard. Then you’re looking at, how does [our] programming complement those programs.

‘Quite frankly, I don’t like development money because then you have some partner telling you how to design everything. I would just rather risk it,’ Craig insists.

Over at Toronto’s Cuppa Coffee Animation, the team has taken the slow turn from commercial to long-form production. Adam Shaheen, president of Cuppa Coffee, explains the transformation his company has undergone.

‘I think we started in ’92/93. We were doing a lot of broadcast design, and, from there, we moved into bits of commercials and then [full] commercials. That all tended to be Canada-based in the first couple of years. Then we moved into more of a u.s. market. We were splitting our time between u.s. and Canadian commercials, and then, I have no real reason to explain why, the Canadian market just fell away. I was probably putting 80% of my efforts into Canada and getting back 5% of the jobs. Essentially, 80% or 90% of the work was u.s. And then, about three years ago, I was getting a little bit frustrated with the level of creativity that was being offered to us.

‘I’d always really wanted to do kids short- and long-form and get out of commercials a little bit because there was the desire to tell a story,’ Shaheen continues. ‘Particularly, I worked on such organic hands-on types of art and design, it struck me, and this was a gut reaction, that this [mixed-media style] would be something that kids would really relate to.’

When Cuppa finally began getting long-form gigs (south of the border) it was a bit of a shock to the system that had been in place. ‘All of a sudden we were doing 26 half-hours. It was a little bit more rock and roll – we had a definite finishing date. We weren’t spending eight, 10, 12 weeks analyzing 30 seconds,’ Shaheen recalls.

‘Surprisingly, I find long-form far more doable. You’d think when you have 12 weeks to do 30 seconds, you would have all the time in the world. But there are so many people, so many approvals and so many this and so many that – you always end up shooting to the last second.’

With the company’s new direction comes the temptation to grow. With 130 employees, Cuppa is close in size to Dynomight. Shaheen is proud that his company is still very personal with what he describes as a ‘family’ atmosphere.

Does he expect the company to expand?

‘Why would you get bigger? The one thing I really don’t like about this business is that anybody you talk to, seemingly, [thinks] it’s [all] about dollars and cents. And that’s not how I started. I think the reasons to grow are questionable,’ he says.

Merchandising in mind

Shaheen also has strong feelings on merchandise as a catalyst for content. ‘It’s all about character and all about story. And if we have some fun with merchandising on the back-end then that’s just gravy. But,’ he admits, ‘I think that’s the pc version. Everybody has got it at the back of their mind. And I’ve got nothing against it, other than it becomes a bit of a vicious circle – changing things about the character that make it more stampable-outable in a plastics company in Japan. We would always seek to be approvers of anything that was merchandisable,’ says Shaheen.

Cuppa has also experienced an example where the animation-merchandising situation was reversed. ‘We did this show for cbs last year called Snowden’s Christmas. It was also part-funded by Target stores. Now, Snowden toys are a toy line created by Target stores in the u.s. Interestingly, when those characters were first designed, they were designed by some graphic artist who had no sensibility about animation. And surprisingly enough, cbs and Target were very good. They allowed us to redesign the characters – mainly from an animation standpoint.’

With Cuppa selling most of its animation in the u.s., Shaheen considers the company a bit spoiled, having ridden a wave of full financing from u.s. broadcasters. ‘Now,’ Shaheen says, ‘that’s starting to dissipate. I wonder if in five years time that will be completely out of the question.’ Cuppa fears that so many ‘partners and conversations’ will make for a more ‘watered down’ product.

Why then, does such an established Canadian talent have to sell to the u.s. when the Canadian specialty networks are designed to support Canadian artists like those at Cuppa?

‘Well, if you sat in on the meeting I just had with a Canadian specialty network – you’d be rather depressed. I’ve thought about it and thought about it and thought about it. The first [Canadian] long-form deal in our history is developing this show Henry’s World with Alliance Atlantis Kids.’ (AAC is the first Canadian company to show any interest in Cuppa’s long-form work, already popular in the States.)

‘I’m not sure why, because we have a reasonably impressive pedigree. It’s a shame because it seems to be typical, you’re often appreciated away from home, as opposed to at home. It’s a bit of a mystery as to why that happens. I mean, I hope it’s starting to change with this relationship with Alliance. The u.s. and u.k. come to me and say ‘What new, great ideas have you got?’ Here, it has to fit into their neat little model of having this sorted out and that sorted out,’ Shaheen says.

Nelvana growing smart

Headquartered in Toronto, Nelvana is a public corporation that has little difficulty selling its animation to the Canadian specialty networks. Patrick Loubert, co-ceo of the animation giant, has about 16 productions being coproduced with partners in Europe, Australia and China.

‘Almost 100% of our shows are coproductions,’ Loubert explains.

As a large public company, Nelvana has particular challenges of which it must be constantly aware. ‘Obviously,’ Loubert begins, ‘as any public company, you have to grow. The challenge is to grow smart.’

Nelvana has been facilitating this growth with savvy acquisitions, like its recent purchase of Klutz Press. Not only a content base for new shows and merchandise, Klutz also helps diversify the company’s revenue stream.

‘[This way] not everything comes out of production,’ Loubert points out.

A public company’s shareholder demands can also play havoc with the creative side of the business. Loubert works very hard to counter this issue. ‘Our job is to make sure that the people who are doing work on shows are not affected by the public company aspect. It would be crazy of me to say that it doesn’t sometimes affect budgets and schedules. But budgets and schedules are affected by every part of the business.’

Curiously, Nelvana has an outlook similar to the smaller companies on merchandising. Loubert maintains the company would not look at a toy first and that the true drivers of its content are the ‘different markets and segments of the population.’

Despite this, Loubert does not discount the importance of merchandising to a successful production. The key for him, however, is that the show be a success first.

‘You can’t just make a show successful, [and] it’s very hard to merchandise a property that’s not successful. If we knew what was going to be successful, then this business would be very easy.’

TV as wallpaper

In terms of the animation style in demand at Nelvana, Loubert has some strong opinions. From the early days of animation, he explains, ‘The idea was to show people something that they had never seen before. I think that television is sort of a wallpaper medium and you’ve got to find projects that will stand out. You have to find new ways to tell – maybe – old stories. In the next couple of years, we’re going to be seeing things [where it is] very difficult to tell whether [they are] live action or animation.’

Cinar, in Montreal, represents the other Canadian public animation behemoth with an easy inroad to the Canadian specialty networks. Despite its obvious size, Cassandra Schafhausen, Cinar’s executive vp, creative affairs, insists the company’s not so big, after all.

‘I would say that we’re not a huge corporation when it comes to the animation production component,’ she says. ‘We’re still quite circumspect about what we produce. [This is] because our mandate for family entertainment and non-violent, classic properties is not something you proliferate indiscriminately.’

For Cinar, sales to the Canadian broadcasters are a virtual requirement.

‘I think the implications of people partnering in Canada usually include whatever funding can be derived from Canadian sources to contribute to the financing of the show,’ Schafhausen says. ‘Unless somebody comes fully financed or significantly financed with no requirement for the Canadian sale going in – you need your Canadian sale.’

Schafhausen also has some strong opinions on the current hot animation style. For her, it shouldn’t be such a big issue. ‘Everybody’s exploring styles,’ she says, ‘But I think style will pull your audience in once – it won’t necessarily pull them in twice.’