BC Business
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Vancouver’s ?animation sector is fighting for the one thing that will end its dependence on ?foreign masters: ?a hit all its own?. Aaron White’s guinea pigs somehow manage to be superbly ugly and adorable all at once. Drawn with only a dozen lines or so, they’re little more than oblong fur lumps with ghastly big eyes and spindly limbs. And to say these would-be cartoon heroes almost look like they’ve been hand-crayoned by a preschooler is not a criticism; in fact, that’s what makes them perfect.?
Aaron White’s guinea pigs somehow manage to be superbly ugly and adorable all at once. Drawn with only a dozen lines or so, they’re little more than oblong fur lumps with ghastly big eyes and spindly limbs. And to say these would-be cartoon heroes almost look like they’ve been hand-crayoned by a preschooler is not a criticism; in fact, that’s what makes them perfect.
As White explains it, the pint-sized heroes of Rosenpigs – his concept for an absurdist cartoon series currently in development at Vancouver animation studio Bardel Entertainment Inc. – are sent back and forth through time, creating havoc along the way.
“Every week they can go back and cause historical calamities, or prevent them, or just kind of cause a ruckus with the space-time continuum,” says the 27-year-old, who, like his creations, embodies a contrast between childishness and maturity, sporting both a neat beard and cartoon characters on his T-shirt as he chats about his project at a hip café on Vancouver’s Commercial Drive.
The subject matter might seem silly, but from a business standpoint a project like this is terribly serious. The Vancouver animation industry has long been dependent on work flowing northward from Hollywood to stay alive. But the sector has fostered several mature studios over the years, employing hundreds of skilled animators, and many feel that it’s now time to start loosening that chain and begin creating content good enough to compete on the world stage. And who knows? Maybe White’s Sphinx-defacing, Hindenburg-crashing rodents will play a part in that awakening.
White is an alumnus of the prestigious animation program at Sheridan College in Oakville, Ontario. After graduating in 2005, he spent five years working as both an animator and compositor for Bardel and another local outfit, Studio B Productions Inc., pitching the Rosenpigs concept – a TV series based on his final project at Sheridan – at each studio. In October 2007, Bardel optioned White’s idea, paying him for the right to develop the project – and, if it attracts enough interest, eventually produce and market it. (White won’t disclose how much he was paid, saying the recognition and experience is worth more to him than the fee.) Currently, an in-house team of Bardel writers and artists is writing scripts, designing a look, making plans for online content and so on. If the studio can bring in a diverse group of distributors, broadcasters and government sponsors to support the project (players such as Canadian cartoon broadcasters YTV or Teletoon and development funds such as Telefilm Canada’s Canada Media Fund), a Rosenpigs TV series will be born, satisfying the yearnings of nine-year-olds everywhere for funny-looking animals, minimalist art and theoretical physics.
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The 2008-09 recession aside, Vancouver’s animation industry has grown steadily since the first major studios took hold in the ’80s. Hard numbers describing revenues and jobs created aren’t available because B.C. Film, the organization that tracks such things, doesn’t separate stats for animation from those of the greater film and TV industry. However, the sector’s success can be seen in the local upstarts that have made good in the last decade, including Atomic Cartoons Inc. (founded in 1999 and boasting two completed TV series and another half dozen in development) and Nerd Corps Entertainment Inc. (founded in 2002 and now producing four TV series). And this past spring, two big U.S. studios, Pixar Animation Studios and Sony Pictures Imageworks Inc., opened satellite offices in downtown Vancouver, which combined are expected to introduce more than 100 new jobs to the city.
This growth is no doubt a testament to the skill of Vancouver’s animators, talent either developed in local schools or attracted to the city by Vancouver’s reputation as a mecca for the creative class. But the industry’s success is also based on something far less glamorous than brilliant artists – namely, massive government subsidy in the form of provincial tax credits worth roughly 50 per cent of a production’s labour costs.
And most of those tax savings are enjoyed by foreign companies, explains Neal Clarance, who leads Ernst & Young LLP’s national media and entertainment practice from the firm’s Vancouver office. The vast majority of the animation work that takes place in B.C. is not, as is the case with Rosenpigs, the product of B.C. brains; rather, it’s outsourced service work from the big American firms, which own the intellectual property to the titles. This outsourcing, dubbed “shoot and ship” in industry lingo, is great for building Vancouver companies and creating jobs, Clarance says. But, he adds, “at the end of the day, the guys who own all the rights are the guys who are going to earn all the money.” Which means that government support for foreign-based contract work is essentially a taxpayer-funded subsidy for Disney, Nickelodeon and other leading U.S. cartoon mongers.
For that wealth to reside here, Vancouver-based companies need to own content as well. When Delna Bhesania formed Bardel with partner Barry Ward in 1988, animation was not so much an industry in Vancouver as a collection of ambitious hopefuls, with a few tiny studios and a single famous company called International Rocketship, founded by Marv Newland (who gave the world the 1969 cult classic Bambi Meets Godzilla). Bardel began producing its own proprietary titles 10 years ago and today boasts such successful shows as Viva Piñata (airing in Canada on YTV and in the U.S. on Fox Kids) and Edgar & Ellen (airing on YTV and in the U.S. on Nickelodeon). Rosenpigs is currently one of about a dozen ideas in the development stage at the studio.
“If you don’t have any proprietary projects, you’re just building a service-work business that can be vulnerable to the Canadian dollar and who has better tax credits,” explains Bhesania from Bardel’s downtown office, which employs about 125 people, a number that balloons to more than 300 at busy times. Service projects only generate revenue from a single source: a fee from the company commissioning the work. Owning the rights to a popular title, on the other hand, can open up whole new streams of long-lasting revenues, such as royalty payments from the sales of any toys, T-shirts, trading cards, video games or other paraphernalia related to the title.
So far no Vancouver studios are earning significant royalty money from their properties. But that’s what everyone’s aiming for. That’s what makes White’s time-travelling guinea pigs, and the other zany projects being dreamt up by talented local animators, a potentially transformative force for the sector. The odds of success are slim, however; there’s no formula for making a hit. Still, the leaders of Vancouver’s animation sector point out that it has happened before, creating the Disneys and Pixars of the world, and they’re confident it can happen again. All they need is the right talent, enough money and time.
In-house concepts from Studio B that have all made it to the screen.
What About Mimi
Kid vs Kat
D’Myna Leagues
Yvon of the Yukon
The quest for a homegrown hit has become official corporate strategy at one of Vancouver’s marquee animation studios: Rainmaker Entertainment Inc. The company, which employs between 200 and 300 people at a time depending on how many projects it’s working on, mostly on six- to 12-month contracts, is located in a spacious penthouse office along Vancouver’s roaring Broadway corridor. By the look of the place, with its conference room looking out over mountain vistas and its mini movie theatre, one can make some decent money from foreign contract work. But apparently it’s not enough.
In May Rainmaker announced a new strategy that hinges on creating its own in-house content by introducing the company’s first-ever slate of proprietary projects, including Ogo, a feature film based on the Lake Okanagan’s mythical creature, Ogopogo; Country Bunny and the Little Gold Shoes, a series of holiday specials; and Ting and Juma, a feature film based around an alien and a caveman who were designed in-house and have already starred in a few Rainmaker shorts. Up until now, the company has been entirely dependent on service work for other studios, including animated sequences for video games, such as the Splinter Cell series; direct-to-video, including a series of Barbie videos for toy maker Mattel Inc.; and feature film work, such as the upcoming Escape From Planet Earth, which it is producing for the Weinstein Co. But CEO Warren Franklin recognized that, as a business strategy, going from contract to contract doesn’t provide much long-term security.
Franklin, who lists executive positions at Lucasfilm Ltd. and Colossal Pictures on his resumé, joined Rainmaker in 2005, which was then a post-production company for film and TV, and led its shift into animation. Rainmaker acquired Vancouver-based Mainframe a year later, absorbing the considerable talent responsible for the world’s first 3D animated TV series, ReBoot.
The recent recession showed just how unstable contract work can be. In 2008 the company brought in $28 million in revenue, says Franklin; last year, revenues dropped to about $15 million. But tough years aside, the market for animation is blowing up, he says: new digital distribution options and electronic products such as websites and video games are opening up a ton of marketing opportunities outside the traditional venue of broadcast TV. And for Rainmaker to take full advantage of those opportunities, it needs to own some rights. “The value of a really great story and really good characters we create can be exploited across all these different types of media,” Franklin says. “You can build a very successful company off of a couple of really strong properties.”
Leading the push to create those properties is Rainmaker’s president and executive producer, Catherine Winder. She grew up in Canada but got her start in animation working for a company in Japan that was bought by Walt Disney Co., kicking off a career that took her through top-name companies such as Lucasfilm, Fox Feature Animation and HBO Inc. Winder is on the lookout for the killer scripts, characters and artistic looks that go into creating winning stories – ideas the company will either buy from others or develop in-house in collaboration with contract writers and artists.
This side of the business, the art, is the company’s biggest challenge. Without success here, no business plan in the world will succeed. And none of it is easy. “It takes a long time to gestate, develop and find the character, find their arc, put the structure of a story together and find a look that works with it,” says Winder. “All those things can’t be rushed . . . and not everyone can do it.”
For companies such as Rainmaker that have yet to score a major money-making property of their own, talent is their only significant asset, which makes finding and keeping the best brains critical to the business. Competition for those top minds is fierce, and Winder acknowledges that Rainmaker has lost its fair share to other studios, both foreign and domestic. But by expanding its own creative efforts, Rainmaker will likely be able to attract more of that choice talent, Winder says. Aside from straight money, animators are attracted to companies that are producing their own titles because they offer a chance for artists to play a bigger role in the creative process.
The arrival of Pixar and Sony in Vancouver is a mixed blessing, says Winder. A lot of great talent will undoubtedly flock to the big names, hurting smaller companies such as Rainmaker. But their arrival also cements Vancouver’s reputation as an animation hub, which will help attract more creative types to the region, benefiting the entire sector. It could also lead to a more permanent base of talent. Most animation workers are hired on a per-project contract basis (much like the rest of the film and TV industry), and the more work that’s available, the more likely good animators will be able to set down roots.
At first glance, it would seem strange that there should be a skills shortage in Vancouver at all, considering the number of B.C. schools churning out animators every year (Capilano University, Vancouver Film School and the Centre for Digital Media, to name the key ones). But Ernst & Young’s Clarance says he’s heard of companies that bring in 20 to 40 employees every year from outside Canada for lack of local talent. That’s because a swarm of fresh grads isn’t what a company such as Rainmaker needs, explains Winder. “Not everybody’s good,” she says bluntly. “There’s a lot of junior talent, but it’s that higher-level specialty talent that everybody wants.”
However, there’s also a strong case to be made that the studios themselves are partly to blame for the shortage of experienced talent. “It’s cause and effect,” says Rosenpigs creator Aaron White. “If you have a skills shortage, look at the lifestyle of the people in your industry.” A culture of long hours and tight deadlines prevails in the local sector, he says, and it’s damaging: “It’s not sustainable. What you wind up with is an industry with very few experienced older people to teach the younger people, because they burn out.”
The tough conditions are compounded by uncertainty, he adds. An animator finishing up one contract often doesn’t know when the next one is coming. It makes it difficult to, say, put down money on a mortgage and start a family, things experienced animators in their 30s are likely to be interested in. “It’s incredibly hard to stay put when you can’t get steady, full-time work,” White says. “The most talented peers I have, they’ve moved out of animation.”
Neal Clarance agrees this is a concern in the industry, saying many companies are working to distinguish themselves as great places to work. “There definitely is that perception out there that a couple of the bigger outfits in town are hard on their people,” he says.
White himself has jumped ship, forsaking animation’s contractor lifestyle to take on a full-time gig as a concept artist with Acronym Games Inc., a startup video game company. (White remains committed to the Rosenpigs project and occasionally advises Bardel, but he is not part of the team developing the title.) He agrees that a hit homemade cartoon would be a sign of maturity for Vancouver’s industry, but healthier working conditions would certainly be another.
Next to talent, the other big obstacle to producing great animation is money. At Studio B’s sprawling, three-floor Downtown Eastside office, Blair Peters has a big grin on his face as he recounts how he and his team financed their first proprietary titles. Studio B ranks alongside Bardel as one of Vancouver’s oldest existing studios; the two are also among the foremost creators of proprietary content.
Peters founded Studio B in 1988 as a two-person operation based out of a 600-square-foot office at Bute and Pender, padding out the revenues from scant freelance animation contracts by doing storyboarding and other illustration work for advertisers. They travelled to L.A. early on to introduce themselves to the big U.S. studios and slowly managed to grow the company on a steady diet of American contract work. But animators are constantly brewing ideas for their own projects, and eventually Peters and his team decided to make one happen. Actually, three.
Yvon of the Yukon, D’Myna Leagues and What About Mimi are all animated TV series started around 1996. Studio B teamed up with a variety of outside artists and writers to flesh out the concepts for the shows, and then Peters and his partners began discussing them with broadcasters at industry functions. Ultimately, the three shows were picked up by three Canadian broadcasters: YTV, CTV and Teletoon, respectively. “We thought we’d hit a home run,” Peters says. Then he learned that a development deal from a broadcaster was just a small amount of advance money to help develop the show’s scripts and artistic style; they’d need much more to actually begin production.
And so the partners set off on a learn-as-you-go financing adventure, attending more conferences to meet more people with money. They eventually found the up-front cash they needed to produce all three titles through more-or-less complicated deals selling the rights to the shows to media distributors, such as Alliance, who would then resell the show to international broadcasters. Since then those shows have brought much success. “We still generate revenue from Mimi,” Peters says, adding that the show has so far brought in more than $3 million in TV sales. “In terms of international revenues, it’s probably one of our most successful shows.”
But money has become harder to access since those early successes, he says, and Studio B has begun partnering with other production companies. 2003’s Yakkity Yak, for example, was produced jointly with an Australian studio, Kapow Pictures, cutting the risks by splitting the work, costs and the distribution rights.
But there’s one funding source everyone in the business is looking for that has yet to enter the Vancouver market: private investment. According to Neal Clarance, there’s no significant private money being invested in B.C.’s film and TV industry, unlike Hollywood, where the industry has historically enjoyed the support of private investors, hedge funds and private equity.
That’s not to say Vancouver will never get there, of course. “We don’t have the history and the success and the return on investment to demonstrate to investors that this is a safe place to put your money,” Clarance says. “But you’re starting to see companies that are well established here that are starting to get that interest. So it’s not happening overnight, and it might still take a few more years.”
The staff at Studio B, which these days number between 150 and 200, are proud of the titles they’ve created themselves, Peters says, and they make as many as they can. Currently, the studio has just one proprietary title in production, Kid vs Kat, in addition to a contract project for Hasbro Inc. based on its My Little Pony franchise. At the studio’s height in 2006-07, before the recession hit and advertisers cut spending and broadcasters stopped ordering new shows, Studio B had six titles in the works, all at one time and all of them homemade. “It was the craziest time for us,” Peters says. “They were all funded in different ways, but we had a piece of every show.”
Regardless of the ups and downs in the funding market, the creators at Studio B are always looking for the next idea to develop themselves, Peters says. He gestures to the view beyond his office window, taking in the other brick office buildings surrounding his. The animation business is not that different from the small mining companies that litter these blocks off Gastown, he says. They’re all looking for that treasure that will make everyone rich and all the hard work worthwhile. Animation studios just have their eyes on a different kind of gold mine.
“We’re all in it for a hit,” Peters says. “We all think that there’s a hit out there, and we think there’s a hit in here somewhere, and that’s what keeps you going.”