The big story in the commercial production industry in 2001 was ‘diversification.’ It is a word that by now should be as familiar to our readers as the varnish on the bar at their favorite pub.

The current generation of production companies found themselves in a strange new position in 2001. With the economy grinding to a halt and clients spending decidedly less on their advertising, production volumes fell by an estimated 35%, according to one industry insider.

But the economy was just one factor that sent producers looking for new sources of revenue. Technological advancements such as the personal video recorder became a more imminent threat, as did the launch of digital channels, which are expected to further fragment TV audiences.

Commercial producers seemed to unanimously decide it was time to try something new or make some moves within the parameters of their existing business. The first one to spark the trend in 2001 – which should come as no surprise to anyone – was Don McLean.

McLean, the head of The Partners’ Film Company in Toronto, established a new satellite in Bedlam Films with Jennie Montford and Evelyn Arthur. According to Montford, the idea came from McLean who wanted to set up a boutique shop with a small roster of Partners’ more junior directors.

‘[McLean] felt that with the trend toward longer and longer rosters, there were certainly Canadian directors getting lost on the shelves,’ Montford told OTS in February.

Cinelande took a different approach to generating more business beyond its Montreal location. In April, around the time of the shop’s 15th anniversary, Cinelande opened its Toronto-based, ‘alternative media’ company, 401. The new shop is headed by former Voodoo executive producer Stephanie Lord.

‘[At 401] it’s not just commercials,’ said Cinelande executive producer Alex Sliman. ‘It could be anything….We’re challenging the frontiers as much as we can.’

In the late spring, a new shop opened up in Toronto under the banner of frozen man. What was special about frozen man was that it was a satellite of New York-based commercial heavy-hitter hungry man. Its purpose was to represent its own directors in Canada under the new company name, to essentially cut out the middleman Canadian production houses. The company went from servicing hungry man shoots in Toronto to becoming a fully operational competitor in the market.

All this happened before commercial producers were ready to admit there was a serious and scary slowdown happening in the Canadian and international advertising marketplace.

But by the summer, all bets were off.

‘People are starting to make noise about long-form and independent movie projects,’ one producer told OTS in early July. ‘Every production company has scripts they are looking at. Pretty much every company in [Toronto] that does commercials has been actively reminding their U.S. affiliates about how great our dollar is.’

William Cranor, former longtime Spy Films executive producer and cofounder of adbeast, echoed these sentiments. ‘If you’re going to rely on the commercial business, you’re living in a fool’s paradise,’ he said. ‘Your portfolio needs to be diverse. You need to do other things.’

By August, diversification was the catchall phrase of the season.

In particular, virtually every Canadian commercial producer was dropping hints about working on long-form projects. At the head of the pack was Toronto’s Generator Films, a satellite of Avion Films.

Generator made no secret of its longer-format initiatives. In August, Generator merged with Sarah Ker-Hornell’s Angel Films, giving the company’s cofounder and executive producer Michael Cooper a chance to pursue these long-form projects with a little more vigor while leaving the spot production largely in the proven and capable hands of Ker-Hornell.

‘Our business is always changing and [the merger] just allows both of us to focus on one area,’ Cooper said.

The Generator/Angel merger shared September’s headlines with The Players Film Company, which also announced its first serious foray into long form. Players founder Philip Mellows teamed with film producers Steve Hoban and Noah Segal to create The 49th Parallel, a company that would focus its attentions completely on long-form projects.

‘A lot of commercial production companies have put out the shingle and said, ‘Now we’re a film company,’ ‘ Mellows said. ‘I don’t want to be perceived as a guy just raising the profile of his commercial company.’

The new initiative proved very real as 49th Parallel announced its first feature film is called Nothing and will be directed by Vincenzo Natali (Cube).

Then, of course, came Sept. 11.

Days after the tragic attacks on the U.S., the sluggish economy seemed to instantly turn into a full-blown recession. Commercials stopped airing for the few days following the event, building a commercial backlog.

Longer-term fallout included creative teams having to adhere to a new set of sensitivities when drawing up boards. The general consensus was that commercial production had all but stopped, but many producers wrote the doom and gloom off as media hype.

Avion Films head Michael Schwartz, who is also exploring long form through his shop, said although business has been slower since the summer, the market, as a whole, is far from desperate.

‘Things have been pretty tight for a while, but I really don’t see a scale-back,’ he said. ‘I don’t even think board flow has been that much different than it was before the attack. In the last four or five months it’s been okay, but not brilliant. A lot of clients are postponing or canceling things, and there have been some really tight budgets. There is also a lot more competition than there was five years ago.’

With businesses splitting like amoeba, expect that competition to intensify even more as we roll into 2002.