Canada’s digital media industry is proving ripe for entrepreneurs with global ambitions – and the world is starting to take notice. Playback sought out four digital media companies making an impact in emerging sectors with an eye to global markets. Are these companies onto something you’re not?

From L to R: DotstudioPRO co-founders Phoenix Gonzalez, Joe Pascual and Selena Paskalidis. Photo credit: Sandra McCurdy Photography.

dotstudioPRO digitally powers indie distribution
While digital has opened up a range of new possibilities for indie producers, many struggle to navigate the new DIY distribution options and monetize content online. Vancouver- and Burbank, CA-based dotstudioPRO, however, has created a platform that allows creators to launch content across a number of digital distribution outlets – from microsites to OTT apps – while providing tools to monetize that content and monitor audience engagement.

For example, creators can use dotstudioPRO’s global platform to launch a paywalled microsite, and add advertising to videos. The platform also provides creators with an embed code to incorporate paywalled videos into a Facebook fan page, allowing audiences to purchase and view a video without leaving the social network. The dotstudioPro dashboard allows creators to easily set price points across the digital outlets the platform powers and monitor audience engagement across the various verticals.

DotstudioPRO can also be deployed at different levels of scale. Hip hop lifestyle brand For Us By Us (FUBU) has inked a deal to use the dotStudioPro technology to launch its ad-based OTT service, FuBuTV, on Roku, Android and Apple TV. In 2015, Toronto-based IndieCan Entertainment set up a deal with dotStudioPro to launch a series of digital screenings that aim to recreate the in-cinema experience by selling tickets and digitally screen films on a dotStudioPro-powered microsite. DotstudioPRO, in turn, makes its money based on a 70/30 ad revenue split with creators using the free version of the platform (with 70% going to the creator), as well as a 50-cent-per-transaction fee for VOD content. Revenue is also generated by charging a license fee for a platform aggerator version of the dotStudioPro software.

While the company can cater to clients large and small, the tech was developed with mid-sized producers in mind, says Joe Pascual, co-founder and CEO of dotstudioPRO. About 15 years ago, indie producers that couldn’t get U.S. distribution would turn to foreign DVD sales, a market which since has been replaced by online distribution. The goal is to give traditional producers access to that world and provide valuable metrics.

“If producers who own the content…are able to handle the distribution pipeline globally, then it’s a big driving force of that middle-tier content, which at the end of the day is the bulk of the industry. And if that content isn’t doing well, then none of us are doing well,” Pascual, told Playback.

Clarification: This story has been updated to reflect dotstudioPRO is the brand name associated with the company. The name of its legal entity is Dotstudioz.

Jeremy Friedberg speaks at a 2012 TEDxYouth@Toronto event. Photo credit: Hendrick Lau

Spongelab Interactive soaks up STEM learning
When Spongelab Interactive co-founder and president Jeremy Friedberg started teaching when he finished his PhD in molecular genetics and biotechnology, he loved every minute of it – but thought he was a terrible teacher.

“I needed better tools to communicate stuff that is often extremely dry and difficult to understand,” explains Friedberg. He began considering how digital games could be used to teach science, technology, engineering and math [STEM]-focused lessons to senior-level students.
In 2007, Friedberg found business partners in Reg Bronskill and Andrea Bielecki of InViVo Communications, who were looking to do similar work in the healthcare field. Toronto-based Spongelab Interactive was born and nine years later, Spongelab.com, one of the company’s flagship products, a free online hub with a paid, premium option of more than 200 STEM-focused 2D and 3D educational games at Spongelab.com, has just under one million registered users accessing the site.

What makes Spongelab.com especially useful to the education sector is the Stitch platform, an encrypted management system Spongelab also licenses to third parties (the licensing of Stitch is the basis of Spongelab Interactive’s business model). The platform can track how a student is interacting with all content across the site – from quiz performance to how a student approaches playing a game — to give educators a better understanding of a student’s learning style.

“For us, it’s not about points and badges. It is a deep understanding of the psychology of the people and the communities we are developing for, and what drives and motivates them,” Friedberg said.

The growth of Spongelab.com comes as school boards, governments and think tanks increasingly focus on the STEM education sector. A 2015 Council of Canadian Academies report called for increasing the quality and level of STEM skills taught across all levels of school to prepare students for an uncertain employment marketplace. And in 2013, Sesame Workshop launched a STEM-focused digital portal in response to President Obama’s Educate to Innovate initiative.

Producers, particularly those in the kids’ entertainment space, can learn from Spongelab Interactive’s data-driven strategy to create digital extensions that both entertain and engage users and meet the educational targets of parents and educators.

Using tech and innovation to build business has been Yellow Bear Studios’ mandate since day one, says founder Ryan Lussing, pictured

Yellow Bear is bullish on tech
Toronto’s Yellow Bear Studios, founded in 2012, is still a relative cub in the interactive media space. Don’t be fooled into thinking its adorable yellow mascot is indicative of its youth, though: what it may lack in years, it makes up for in innovation, quick thinking and a rapidly growing partner base.

Led by founder Ryan Lussing, Yellow Bear has quickly evolved from a company that focused on building websites and digital media for Canadian clients to one that is focused on building, owning and monetizing its own IP in the global marketplace. That extends to both creative IP and patented technology. They’ve caught the attention of Interactive Ontario executive director Christa Dickenson and are growing revenue at a rate of 30% year-over-year. In addition, the company has grown from three to eight in-house employees since it launched.

In fact, Yellow Bear is in such a growth spurt right now that Lussing is projecting a 60% boost in revenue for 2016.

What is the common theme in this trajectory? A focus on technology and innovation.

“Technology is the major disruptor, and we use technology as our backbone for business,” Lussing tells Playback.

The company’s current projects include a hands-free gaming system (for which Lussing owns the patent) in partnership with Shaftesbury’s digital arm Smokebomb and an interactive web series called Riding Hood with Toronto’s Insight Productions. At this stage, the hands-free device has a number of potential uses beyond just being a gaming system, says Lussing, including becoming a smart home tool. The company is looking overseas too, with a near-finalized coproduction agreement with a Belgian creator to make a retro-inspired sci-fi series for broadcast, digital and mobile, as well as a transmedia project in development with Cartoon Network Europe, with Shaftesbury handling TV distribution.

In short, business is good for these tech bears.

Dickenson says she is particularly impressed with Yellow Bear’s dexterity in navigating the Canadian funding system and by its push into the interactive toy sector with the hands-free gaming system, an area Lussing identifies as a target for revenue growth in the coming year.
Though pushing tech boundaries is the name of the game, the overall strategy is simpler, says Lussing: to marry interactive with story. “Interactive has to be included from the very beginning [of a project] – it’s the ingredients in the overall recipe, not a separate dish.”

Félix Lajeunesse (right) and Paul Raphaël (left) have put Canada on the map with groundbreaking VR work. Photo credit: George Fok

A 360-degree vision: Felix & Paul Studios
As brands, filmmakers and companies jockey for pole position in the new virtual-reality sector, Canadian directors Félix Lajeunesse and Paul Raphaël say they feel like they’ve been doing VR for the past decade.

They just didn’t have the headsets until 2013.

Having honed their craft in immersive, cinematic storytelling since the Oughts, the duo launched Montreal-based Felix & Paul Studios in 2013 to coincide with the arrival of mass-scale VR technology. In the barely two years since, the company has grown from three members to 30, rubbing virtual (and actual) shoulders with some of the best-known names and faces on the planet in the process.

The big time came knocking in mid-2015, when the studio landed a multi-year content deal with Facebook-owned Oculus Rift, planting them firmly on the VR map. The company’s projects include Striving For Greatness (an immersive experience following LeBron James during NBA pre-season) and Inside Impact: East Africa (which documents a Bill Clinton-led initiative in East Africa), as well as a VR experience for Jurassic World. The second and third installments of VR series Nomads were launched at Sundance 2016.

From the VR camera systems to the post-production platform software, Felix & Paul creates all its own tech and has no desire to recreate what’s already been done. “We’re in a mode of exploration and discovery, more than a mode of consolidating ideas and concepts to find a formula that can be applied to everything,” Lajeunesse tells Playback.

Refining technological processes is a critical part of the studio’s work right now – and with impressive results. A post-production window 12 months ago yielded five completed shots. Today it yields 30.

Lajeunesse predicts the hyper-evolution of VR will continue for the next two to three years. The daily challenge, he says, is anticipating those evolutions. “We want to expand the language and the borders of the VR art form. There’s a rapid transformation in the perception of where we feel the limitations are.”

By Julianna Cummins and Jordan Pinto