Perusing the stories and adverts in the last few issues of On The Spot, you may have been struck by the notable number of startups in the commercial production sector. Topping the list are three new production houses that have emerged over the summer.

In this issue, we cover Apple Box alumni J.J. Lyons, Claire Cashman, Jane Charles-Shaw and Cheryl Munroe, who have taken fate in their hands by launching The Park City Film Company; and Evelyn Arthur, who from the ashes of Bedlam launched new prodco Wire. Another new startup, YYZ, with director Stephen Yeates, also announced its entry earlier in the spring.

Meanwhile, Radke Films has launched a long-form division and virtually every mid-sized producer from coast to coast will, if prodded, declare ambitions in the same vein.

What makes all this activity notable is the fact that Canadian commercial production has been in, for lack of a better word, a recession going on a year.

What gives? Is the summer heat melting the gray matter between the ears of what otherwise appears to be a group of intelligent, strategically minded business people? Who in their right mind goes out alone in the middle of a recession with a new business venture?

The answer appears to be: intelligent, strategically minded business people.

According to PricewaterhouseCooper’s Global Entertainment and Media Outlook: 2002-2006, Canadian ad spending on broadcast and cable networks only grew by 2.4% in 2001. But the report forecasts a steady rise in the rate, going from 4.3% growth this year to 9.6% in 2004 before it levels off.

It appears that maybe they’re not so crazy after all.

‘As long as they’ve got the talent, the access to the initial capital and some kind of competitive value-add proposition, they should be positioned well,’ says Gino Scapillati, Canadian leader of the PwC Entertainment and Media practice.

Another analyst, Bruno Amadi, a partner at KPMG’s entrepreneurial practice, takes the notion even farther.

While his analysis is based on general business realities, his profile of businesses that can do well launching in recessionary times describes commercial producers almost to a tee.

He says that a new company in an industry where relationship building is essential, which also has a higher focus on cost-containment strategies during tight economic times, can do well to launch under such circumstances.

‘If you get an entrepreneur in there who has a low-cost structure, has good contacts, has worked in the industry or is with [a] larger company and just wants to strike out on his or her own, it may be a good opportunity,’ he says.

‘Going into business in tough times can sometimes work out well.’

Indeed, these companies could have a competitive advantage because they are flexible; they are lean; and the principals are experienced and have built careers on their reputations.

That’s probably welcome news for these new prodcos, because standing in the valley, it’s sometimes hard to see the good things over the horizon.