Canadian Treats

This article originally appeared in the MIPCOM 2012 issue of World Screen.

 

The writers’ strike that halted production of American comedies and dramas in November 2007 was bad news for Hollywood—the labor action cost the city of Los Angeles an estimated $1.5 billion. But for the producers to the north—in Canada—that work stoppage created opportunities that they are still benefiting from today.

 

With gaps that had to be filled with content, the U.S. broadcast networks started gambling on Canadian dramas as a way to cost-effectively fill some of their prime-time slots. And, since then, they have continued to do so; NBC this summer aired Saving Hope, commissioned by CTV, and ABC is on board for a fourth season of Rookie Blue, which simulcasts on Global.

 

It’s not just Canadian drama that’s been in demand for the last few years; across all genres, the export value of film and television content from Canada reached a seven-year high of C$2.26 billion ($2.3 billion) in 2011, a 20-percent rise on the year-ago period, according to the Canadian Media Production Association (CMPA). This year, Canada has been selected as the country of honor at MIPCOM, with more than 200 companies slated to attend the market.

 

For many veterans of the Canadian media business, their success internationally has much do with incentives and funds that have allowed producers to deliver high-quality content on budgets that would be hard to achieve in other major markets.

 

“We’re a small country and we sit beside the largest entertainment producer in the world,” says Christina Jennings, the chairman and CEO of Shaftesbury. The production financing and tax credits offered through the Canada Media Fund, Jennings notes, “have been invaluable to all of us growing our businesses. I don’t know what our industry would have looked like had they not been there.”

 

Ira Levy, an executive producer and a partner at Breakthrough Entertainment, which was launched almost 30 years ago, offers some historical perspective on how much the Canadian financing system has benefited the industry. “In 1994, when the tax credit really came into what its contemporary self is, the amount of Canadian content production was somewhere in the neighborhood of C$600 million ($614 million). Now it’s in excess of C$2 billion ($2.05 billion). One of the primary reasons is the ability of Canadian producers to access tax credits. It’s allowed us to have a very effective tool in the international market to be able to attract co-productions. The tax credits have been the lifeblood of the industry. They are very bankable in the international market.”

 

“They give us the ability to produce programming of a high caliber and at a rate that we can afford,” notes Joy Rosen, a co-president and co-founder at Portfolio Entertainment. “We feel so fortunate to have a government that supports us that way and sees a value in this industry. It keeps a lot of people at work and helps Canadian companies on the world stage. It’s absolutely critical to our success.”

 

Andrea Gorfolova, the president of Tricon Films & Television, notes that incentives have been key to expanding all of the company’s operations, but none more so than its scripted-drama business, which includes the long-running hit Sanctuary.

 

“The way we built Sanctuary was through a presale to five countries. That’s the only way I’d like to be looking at any [drama] we’re going to be building. International buyers that are going to spend money on scripted programming need to have some volume to put the advertising dollars behind. You need to have some guarantee of multiple seasons. Having more partners to start with gives you that option. Even if you lose one you’re not losing three quarters of your budget.”

 

Indeed, Canadian producers have become particularly adept at multicountry co-productions. Entertainment One (eOne) has developed an expertise in putting together scripted drama projects for the U.S. and Canada, often with a big pay-TV brand in the mix, too. Rookie Blue on ABC, Haven on Syfy and The Firm and Saving Hope on NBC “are all patchwork quilts,” says Peter Emerson, the president of Entertainment One Television International, describing how those shows were financed. “We’re following more of an independent-feature model than a traditional TV-financing model. It’s brought the U.S. agencies and the highest level of talent to our doorstep. We’re giving back more creative control and more [money] back to our creative partners.”

 

Muse Entertainment has been steadily expanding its presence in the U.S. Its The Kennedys delivered record numbers for ReelzChannel, which is now on board for Muse’s latest period drama, Bomb Girls. Also on the slate at Muse is the eight-part King Tut.

 

Sullivan Entertainment has also built a strong scripted business in working with American partners, particularly on period dramas like the Anne of Green Gables franchise. “Most of our library has been produced with U.S. partners,” says Kevin Sullivan, the company’s CEO. “We’re extremely well placed to develop English-language drama that has wide international appeal and can still attract big stars. That creates a very fertile broadcast market for presales. If you can leverage that you can generally become, as we have, producers of high-quality entertainment.”

 

Cineflix Media, which has become a significant provider of factual shows to U.S. cable networks like Investigation Discovery, takes the Canadian tax credits and invests them back in the production before going to get a U.S. broadcast partner, according to Simon Lloyd, the CEO of Cineflix Productions. “If you can deliver a quality idea, top-end people, and you can also say, We’ll invest up to 25, 30 percent [of the budget], that is a fantastic package for an American broadcaster….Tax credits have given the Canadian production community a fantastic opportunity to go and compete with the best producers in the world.”

 

Having a leg up when doing business on the international market is particularly useful now as Canadian producers face a challenging landscape at home. Many express some concern about what effects the media consolidation over the last year will have on the production-and-distribution sector.

 

“Consolidation creates challenges and opportunities,” says Shaftesbury’s Jennings. She notes that consolidation has created “benefits packages—money that the broadcasters have to give back to the industry. That creates, for a period, sizable sums of money that go straight to production. More shows are greenlit. But ultimately, you can’t deny there are fewer buyers.”

 

“It is a smaller pool,” agrees Portfolio’s Rosen. “That’s always challenging. There’s a concentration of decision-makers. That can also work as a plus, because if you have a good relationship with a network, you can often move within their family.”

 

Meanwhile, kids’ broadcasters in particular are feeling the pinch from a slowdown in ad spend. Against that backdrop, even Canada’s financing system isn’t too much help. “The issue is you need to get shows greenlit to avail yourselves” of the available financing, says Vince Commisso, the president and CEO of leading animation outfit 9 Story Entertainment. “Everyone likes to get on the broadcasters when they don’t spend, but they don’t have the money, either. The ad market is tough in kids’ right now. A lot of the ads are driven by toy companies and they’ve all had their own challenges recently and are looking at their spend in the advertising space…. The amount of shows being produced is really dictated by the dollars available.”

 

There is, though, an upside to broadcasters being pickier about what they commission: “Everyone be­comes extra mindful as to the quality of shows,” Commisso says. “That ups our game. We’ve never produced at a higher quality level. We work the shows until we can’t work them anymore. We rewrite, we reedit, we rerecord—there’s never a point in a production where we don’t stop and hit rewind to make the show better.”

 

The company is also trying its hand at prime-time entertainment with its new adult-skewing comedy Fugget About It for TELETOON.

 

At Cineflix, much of the focus over the last few years has been expanding the reach of its production business; today, it’s producing shows in Canada, the U.S. and the U.K. “We are a Canadian company but we have offices in London, New York and Los Angeles,” says Lloyd. “It’s easier to maintain a [large] slate when you’re not just focused on one market. Canada is our home market, as is the U.S. and the U.K. We’ve got 28 series in production at the moment, seven are out of the U.K., ten are out of the U.S. and 11 out of Canada. That means we’re more diversified.”

 

At eOne, with its Los Angeles base now well established, the company is turning its attention to the U.K. Emerson recently relocated from the Toronto office to drive eOne’s co-production initiatives in Europe. A particular emphasis will be on enhancing the company’s slate of U.K-originated factual content. “We’ll be hiring a senior acquisitions person in the U.K. Being a publicly traded company and having the financial resources that we have, we’re also looking at expanding through acquisition. We have a number of targets now, U.K.-based companies that we’d like to be in business with and potentially take positions in those companies.”

 

Canadian and British drama co-productions are also a focus for eOne, with the first being Rogue, which has been picked up by DIRECTV in the U.S. as its first original series.

 

Sullivan Entertainment, with its extensive studio facility outside of Toronto, is keen to start expanding its period drama again, beginning with the series Polo, which is currently in development. “For producing very rich-looking period series, we have all the technology as well as the financing leverage,” says Sullivan, who adds that the company is also eager to make its library of period drama available online.

 

The company is also looking to expand its client base to factual broadcasters with Out of the Shadows. First produced as a feature-length special about a Dutch art historian who has found hidden works of art in a host of masterpieces around the world, Out of the Shadows is now being developed as a full series.

 

For Tricon, major growth opportunities include stepping up its drama and kids’ output, as well as expanding its distribution catalogue. To that end, it has sealed a deal with the U.S. cable network IFC to represent its original comedies on the global market.

 

Levy at Breakthrough says that factual and kids’ remain two of the company’s major business areas, but an emphasis is also being placed on ramping up the drama and comedy series businesses, as well as its slate of TV movies and feature films.

 

At Portfolio, the major expansion this year was the company’s move to begin producing its own factual content. The first project is Top Bitch, about “obsessive relationships” between pet owners and their dogs, Rosen says. “Portfolio goes where we see opportunities, but we never stray from what our core values are—high production values, positive uplift. We’re transferring our philosophy and expertise into new genres.”

 

Shaftesbury recently set up a base in Los Angeles to work across all of the company’s key genres—comedy, drama, factual and kids. Jennings says that building the company’s American business is a major priority for the next 12 months, as is continuing to expand its digital business. Since acquiring Smokebomb Entertainment, Shaftesbury has been aggressively developing concepts that can work on digital platforms as well as on linear TV. It is bringing to MIPCOM two such efforts: Unlikely Heroes and Backpackers.

 

Harnessing the potential of digital platforms is going to be crucial for producers, says 9 Story’s Commisso. “It’s going to become essential for us to look at new models and new paradigms. Our trend has been, make this great show, produce it for our domestic broadcaster and sell it all around the world. Now let’s make another great show to replace that one. The first one sits on a shelf in your library and no one is doing anything about trying to extract [more] value from it. In [a series of] 52 episodes we have over 2 million frames that we can repurpose. In the era of emerging platforms, that doesn’t threaten your TV business and your first run, and it gives you an opportunity to help other businesses that are emerging, as well as your own by monetizing the content.”