‘It’s a competitive business and all the more so because the target is always moving,’ Jean Bureau, executive vp, international distribution at Motion International, observes of the world of international distribution from a Canadian’s perspective. ‘The amount of product being produced in North American is huge and what broadcasters want changes regularly.’

While international distribution is an area Canadian distributors/production companies feel they need to focus on and even expand to make their businesses viable, it is an area marked by steadily growing competition. Sure, there are more and more markets with the increasing number of specialty and cable channels, but licence fees from such operations can be pretty meager. And although the world is turning into the proverbial global village, where once geographically and politically remote locations are now accessible, more and more North American companies are producing a plethora of programming for those markets.

‘There is an overabundance of product in the market right now,’ says Louis Fournier, vp distribution and marketing at Montreal-based Cinar, one of Canada’s biggest exporters of kids tv. ‘Yes, the universe of the buyer is expanding with the creation of cable and satellite services. At the same time this has fragmented the audience, and diminished the licence fees. So it’s a challenge to finance and produce at a quality level that people are expecting.

‘It is also challenging to sell your programs when there is an oversupply,’ says Fournier. ‘Buyers have a lot to choose from, and although a lot of product is not exactly quality, there is still a lot of noise on the line.’

Emphasizing international distribution

Cinar decided two years ago to put an emphasis on international distribution. It established an office in London to serve as Cinar’s European headquarters, from which it makes coproduction presale deals and distribution arrangements. Seven years ago, the company also acquired England’s Filmfair library, which included a stop-motion studio in London.

‘We wanted to be in Europe where production is happening and to establish roots there and be production partners with other entities in Europe,’ says Fournier.

As for acquiring further libraries for distribution, Fournier adds, ‘we are always on the lookout for good libraries to buy but they are hard to come by. They are a rarity, and it has to make financial sense and fit in with what the market has to offer. We are always looking for good preschool properties to develop and produce and looking for those breakout properties that have an edge or quirkiness to them. We are definitely looking at producing more live-action series and generally our top priority is to develop and produce new shows.’

Maximizing rights control

A veteran in the international distribution biz, Alliance Atlantis Television Distribution serves the international marketplace with offices in Los Angeles, several European cities and Sydney, Australia. More than 80% of the company’s licence revenues are generated outside of Canada, with ancillary rights licensed to approximately 400 broadcasters in 200 countries around the world.

‘It’s definitely a busier and noisier market than it used to be,’ confirms Alliance Atlantis Television Distribution president Ted Riley.

‘What has happened is with the proliferation of u.s. [specialty and cable] stations, the amount of domestic programming there has soared – and then all that programming is hitting the international market.’

Part of the Alliance Atlantis strategy is to concentrate on productions wherein the company can maximize the control of international distribution rights, thus increasing profit margins on each production and building an increasingly valuable library.

The company has been able to increase the number of multiyear output deals in Europe and Asia, thereby securing buyers in advance and predictable revenue for production financing. Alliance Atlantis has thus secured output deals with Europe’s Endemol Entertainment, inked a three-year output agreement with Spanish broadcaster Telecinco and signed a deal with Italy’s Eagle Pictures, which has licensed Italian rights to 40 television movies produced by Alliance Atlantis over the next three years.

Another growth strategy is to increase the company’s control of distribution rights to programming it acquires from third parties, particularly on a packaged or prenegotiated basis. In line with that goal, Alliance Atlantis recently reached an agreement to extend to 2003 its rights as exclusive distributor in Canada of the cbs catalogue.

‘It’s always best to control our own rights and to maintain control over as many rights as possible,’ says Riley. ‘Alliance Atlantis is involved in three main areas, movies and miniseries, dramatic series and children’s programming,’ he continues. ‘We are always trying to find the right level of activity in each area and to find the right marketing niches.’

Capitalizing on

existing library

Toronto-based Nelvana has had a strong presence in Europe for the better part of a decade. Along with the requisite sales office in l.a., the coproducers of the breakout hit Bob and Margaret, have offices in London and Ireland, recently adding a new person to the Paris office who is involved in distribution and coproductions.

‘There are more companies jumping into the fray,’ says Nelvana’s director of distribution James Dye. ‘These companies are capable of capitalizing on the opportunities that come from the added number of channels. In animation, this is largely because the technology allows a one-person operation to essentially come up with a fairly decent product.

‘The production quality is reasonable and someone can sell it to a smaller specialty broadcaster for a reasonable price. A small broadcaster cannot necessarily afford to get into the South Parks or the Bob and Margarets, at least not in initial runs. So they will go over to some other production house that’s smaller with conservative goals.’

Dye says Nelvana competes in that environment by, among other things, capitalizing on its existing library content, which includes well over 1,000 half-hours. In this marketplace, he says, Nelvana is not just penning contracts with broadcasters like Teletoon and Treehouse for new shows at premium fees and top terms, but an awful lot of the library, with some programming from the early 1980s, is being reintroduced and enjoying an extended life on cable.

In terms of its success with Bob and Margaret, says Dye, ‘it has opened a lot of doors for us. It gave us the ability to exploit the primetime market, which we couldn’t do in the past. Now, we always have primetime in our sites.’

‘Quality counts’

Motion International, meantime, sees its distribution arm as a growth sector, with its foreign and domestic distribution sales expected to be approximately $43 million for the current fiscal year. The Montreal-based company provides product internationally from its library of properties acquired from Astral, its own productions and its third-party acquisitions.

‘We believe that a lot of our growth should come through coproduction properties, which will give us both Canadian content and European content,’ says Stephen Greenberg, Motion’s president, distribution. ‘The worldwide competition is always a concern for us and the marketplace is particularly competitive today,’ he continues.

‘Quality counts. The type of programming, the choice of production is very important – the international market will not take just any programming today. Not only is too much being produced from North America to be sold in international markets; as well, the international markets are producing a lot of local content programming. So it is a twofold issue.’

Trend spotting

Besides being deal-makers extraordinaire, Canadian distributors in the international market need to have a keen eye for the vagaries of changing tastes. The key to making it in the distrib biz, says Greenberg, is to first examine the market carefully and understand what the trends are – and then try to respond with the right acquisitions and/or productions.

Shifts in trends, says Motion’s Bureau, can usually be seen at the markets twice a year.

‘It could mean that we will produce more thrillers with American stars and very specific types of movies that can only be done in North America,’ Bureau says. ‘When you look at the series that are being produced by the studios and put out internationally – it’s is huge. If we want to be in the series business, then we want to decide specifically what kind of series, because we don’t want to find from our customers that they already had to buy three such series from Columbia TriStar and they didn’t even want one of them. More than ever, international markets are looking for very specific genres.’

Alliance Atlantis’ Riley agrees. ‘It’s more important for all our shows to be an identifiable genre,’ he says, ‘whether it be a cop show or a medical show, rather than something that is a less identifiable hybrid.’

International buyers, Riley says, are also looking for product geared to that important 18-to-34-year-old demographic. ‘The world is made up of Fox networks and Canadian producers need to embrace that.’

As far as specific trends, Bureau says, ‘At the last screenings, we saw a real need for natural catastrophe movies, series, mows or documentaries. This is a new thing, but [European countries] were ready to prebuy this genre – which of course is also very expensive to do.’

Kids swings to live action

In kids television, the latest demand is for live-action because, says Fournier, there has been a shortage of late. ‘Live action is difficult to finance and it doesn’t travel well,’ he says. ‘While the preschool market is becoming more restrictive, a lot of broadcasters are looking for eight-to-12-year-old programming. In animation, people are always looking for breakout properties, not just in terms of the properties, but in terms of the genre. Form is also being pushed – they want not just traditional animation, but a mixture of 3D animation, cgi and other techniques, so they look different. New channels want signature programming.’

Markets that distributors say are opening up include South America and Asia and particularly China.

Despite all the fanfare over the ever-expanding global television landscape, Bureau says, ‘There has been a proliferation of services around the world, but the fact is, the new services are paying only a fraction of the dollars of the major networks. On the second life, the second cycle of programming, there are new opportunities. Still, a distributor needs to make that sale to the major broadcasters in each territory. If you cannot get these customers, you will not be able to recoup your investments.’