Canada is a top originator of English-language scripted and factual content. Ever savvier of the international market, the country’s producers and distributors are more aggressively seeking out US partnerships as a springboard to the rest of the world, reports Mark Dillon.
One reason Canadian producers need a global outlook is a challenging broadcast landscape at home. Public broadcaster CBC is scaling back commissions following a 10% budget cut, while its privately-owned counterparts are consolidating at an unprecedented rate. Telecommunications companies are trying to swallow broadcasters, leaving just a few English-language giants standing. Bell is now operating leading network CTV as well as dozens of specialty channels, and will appeal the decision to block its acquisition of specialty rival Astral Media. Shaw owns the conventional and specialty properties originated by Canwest, while Rogers purchased the conventional City channels formerly owned by Chum. Another specialty player, Corus, is majority owned by the Shaw family. Fewer competitors mean fewer places for producers to pitch and threatens to drive down license fees.
“There’s only a certain amount of shelf space in Canada, because with consolidation there’s a tendency for those vertically integrated companies to acquire, pre-order or licence less original programming for each of their distinctive channels, and for more programming that tends to go across a number of the different channels they own,” notes Ira Levy, partner at Toronto’s Breakthrough Entertainment. His veteran company, which, according to industry publication Playback, recorded C$30 million in production last year.
“There’s a really strong appetite for Canadian drama, comedy, kids shows, lifestyle shows and some bigger documentary series in the international market – especially in the US, and in Europe and emerging markets such as India, Brazil and China. Yet there might not be a home for some of those programmes in Canada,” he adds.
The 2010-11 fiscal year – the most recent for which figures are available from the Canadian Media Production Association – saw an all-time high C$5.49 billion of TV and film production in Canada, C$2.39 billion of which was indigenous independent production.
“There’s only a certain amount of shelf space in Canada, because with consolidation there’s a tendency for those vertically integrated companies to acquire, pre-order or licence less original programming for each of their distinctive channels, and for more programming that tends to go across a number of the different channels they own” Ira Levy, partner at Toronto’s Breakthrough Entertainment
The Canadian Radio-television and Telecommunications Commission – the country’s broadcast regulator – recognises the disadvantages of consolidation and demands compensation for indie producers in the form of benefits packages—money that must be spent on Canadian TV programmes in addition to what is required of broadcasters in their terms of licence. Rogers is in the midst of a seven-year C$31 million additional spend on indie programmes, while Shaw is spending an extra C$79.1 million. Bell will spend an extra C$98 million as a result of its takeover of CTVglobemedia and is proposing C$96 million more for its pending Astral purchase. That totals an additional C$304 million in Canadian shows to be unleashed on the global market.
But benefits packages will run out, and then what? Given that content is being consumed increasingly via new outlets such as Hulu, Xbox TV and Netflix, Levy isn’t overly worried. “Conventional television also has an expiry date,” he says. “Those benefits packages provide a good chance to make a mark in terms of the wealth of talent and amount of great production Canadians can do, so that five years from now, when there are other platforms that are more mature in the international market, we can play in that area as well.”
“I set up distribution at Tricon because nobody else here was interested in distributing lifestyle properties. We had properties we could finance out of Canada that were sitting on the shelf. Everybody was saying reality shows were just a phase. But now it’s a significant business and there’s more demand for it internationally” Andrea Gorfolova, president, Tricon Films and Television.
The effect on viewers, especially young ones who are migrating online, where nobody has quite figured out a viable revenue model, is already having a palpable effect. One shop that knows this well is Epitome Pictures (C$35 million in production in 2011), producers of the venerable Degrassi series and new drama The L.A. Complex. “Not only do we have to reach them online, but the broadcast profit margins are being squeezed because the online revenue per thousand is not the same as it is for the broadcast revenue,” says Epitome president Stephen Stohn. “That means we need to be producing our product with even higher quality, so it’s more engaging, but with lower costs—and that’s where Canada has an incredible advantage.”
The floodgates opened in 2008 when Canadian crime drama Flashpoint, produced by Avamar Entertainment and Pink Sky Entertainment, was bought for primetime by US network CBS. That was followed by pick-ups for eOne’s police drama Rookie Blue and supernatural medical drama Saving Hope by ABC and NBC, respectively. Degrassi, meanwhile, airs on US cable net TeenNick while The L.A. Complex was picked up by CW. Having a US broadcaster brings a crucial seal of approval. Degrassi at its peak has aired in 151 territories, thanks in part to a wide-ranging deal with MTV International, and distributor Echo Bridge is looking for a similar deal for The L.A. Complex.
“Canadian dramas are being licensed into the US to broadcasters eager for series that don’t have as expensive licence fees as the American and British shows,” Stohn says. Degrassi has cut back on production costs by adopting a telenovela format, whereby 40 episodes are shot per season, amortising costs. Epitome has its own studio, which also saves on location shooting, and the show is recorded on two RED cameras, capturing close-ups and wide shots simultaneously, thereby slicing shooting time in half.
Montreal’s Muse Entertainment, which boosted its profile with miniseries The Kennedys, is constantly looking to strengthen ties with US broadcasters, doing so out of its Los Angeles office. “Not everything we do is for an American audience, but we always are looking to see how a project can be sold in the US,” says Michael Prupas, president of Muse, which did C$58 million in indie production last year. He sees Canada as favorably positioned. “Many shows on cable are being shot in Canada and we’ve been successful in negotiating deals whereby we can help bring European funding to some of these projects. That old philosophy of Canada as a bridge between the US and Europe is becoming more of a reality.”
Muse has a partnership with France’s TF1 on oddball action series Bullet in the Face, which it produces with Just for Laughs Television for IFC in the US and Super Channel in Canada. Prupas sees France as ripe for various kinds of collaborations. “It remains a very open territory for coproductions and they are willing to do them in English,” he says. “Bizarrely, the British remain a bigger challenge. We have done quite a few coproductions with Britain, and usually they want British actors, writers and directors involved. It’s a challenge to get them off that.” At MIPCOM, Muse focused on selling its World War II-era drama Bomb Girls, which has already made inroads in several major European markets.
Toronto-based producer and distributor Shaftesbury understands the importance of US and international deals. The company recently shopped one-off documentary Why Men Cheat, directed by Marc de Guerre, to MTV-owned US cable network Logo. “We’re delighted to have Logo on board as our US broadcast partner,” says Shane Kinnear, senior VP sales and marketing, Shafestbury.
The company also continues to sell medical drama The Listener after CTV picked up the show for a fourth season. The series, which previously aired on US network NBC, has been shopped to broadcasters including Sweden’s Kanal 9, New Zealand’s Prime and Netherlands’ Net 5 as well as a raft of Fox International Channels.
“You end up developing shows where you start to rely significantly on more than just the Canadian market. It’s a strategy we employ, but it comes with risk. It’s hard enough to predict the outcome of development, and then once it goes on the air, the ratings for the network. Then you add two or three networks in the mix and all are putting up significant money to help a show get financed, and it’s nail-biting time” John Morayniss, CEO, Entertainment One Television
Before looking at international sales, satisfying commissioning broadcasters is paramount, says John Morayniss, CEO of Entertainment One Television, the big kid on the Canadian block (C$194 million in production in 2011), which also has offices in the US and UK, where eOne is traded on the London Stock Exchange. “Internationally we’re drawn toward development and properties we feel can resonate on a global basis, but these shows start with being sold somewhere,” he says. “With Canada specifically we have to ask, ‘is this something we think will work in the Canadian marketplace?’” Entertainment One’s Rookie Blue has done that, regularly drawing more than 1.5 million Canadian viewers on Shaw’s Global TV network, and it has gone on to sell into 219 territories.
Morayniss says it is important to pre-sell dramas such as Rookie Blue and Saving Hope to the US since these series are conceived with big budgets. “You end up developing shows where you start to rely significantly on more than just the Canadian market,” he says. “It’s a strategy we employ, but it comes with risk. It’s hard enough to predict the outcome of development, and then once it goes on the air, the ratings for the network. Then you add two or three networks in the mix and all are putting up significant money to help a show get financed, and it’s nail-biting time.”
Lifestyle and factual is less risky, and an explosion of specialty channels has fueled strong demand for Canadian product. In a dozen years, Tricon Films & Television has grown considerably on that appetite. “I set up distribution at Tricon because nobody else here was interested in distributing lifestyle properties. We had properties we could finance out of Canada that were sitting on the shelf. Everybody was saying reality shows were just a phase. But now it’s a significant business and there’s more demand for it internationally,” says company president Andrea Gorfolova.
“Broadcasters have realised nonfiction programming can bring immense rewards and there’s a lot more competition for ideas. They are treating producers with more respect than ever before” Simon Lloyd, CEO, Cineflix Media
She is bullish on a resurgence in unscripted genres including dating and design—shows that, she says, could get off the ground with only a Canadian broadcaster on board. But the situation is different for what she calls “smart history shows.” “I don’t think shows that are going to have a requirement of C$100,000 per episode for a half-hour can be sustained out of Canada anymore,” she says. “I’m grateful for the system here—not only for the tax credits, but also because you’re able to retain your rights as a producer and go out into the international marketplace to raise financing.”
Tricon has opened a Los Angeles office as it produces programming in the US and seeks out international partners to close financing gaps. It spent more than C$13 million on non-scripted production last year, and among the shows it brought to MIPCOM were investigative crime series I Didn’t Do It, Restaurant Takeover, which combines the food and makeover genres; the reality series Love Trap, and docu-soap Ex-Wives of Rock.
Having a diversified slate helps safeguard your firm from the global market’s unpredictability. Portfolio Entertainment—whose $10 million in 2011 production includes animated UK copro The Cat in the Hat Knows a Lot About That! – is making the leap into factual production with Top Bitch, a series about people with excessive relationships with their dogs. “For more than 20 years, we’ve distributed factual programming and developed strong relationships with buyers throughout the world,” says president Lisa Olfman. “Recently we’ve been fielding requests from international broadcasters for programming that was not in our catalogue. So our entry into this genre was a natural progression as we were becoming more aware of the market needs.”
She points to pros and cons of jumping into a new genre. “On one hand you could say we should continue to excel in the kids area and make sure everybody knows that’s the most important thing to us. But from a financial point of view you could say we should diversify in case broadcasters are taking a break from renewing children’s programming. We’re doing a bit of both in looking at our expansion,” she says.
Nobody in Canada is expanding in the non-scripted area as quickly as Cineflix Media, which reported $101 million in production last year, the lion’s share of it non-scripted. CEO Simon Lloyd says the company – which has offices in Toronto, London, New York, Los Angeles and Montreal – will produce or green-light 400 hours this year, and as of August was in production on 26 series. About 43% of Cineflix’s licence fees come from the US, 40% from Canada and 17% from the UK. The company’s rise is proof positive that it’s a good time to be producing for specialties.
“In the US, shows such as Pawn Stars, [Cineflix’s] American Pickers, Swamp People and Storage Wars have raised the bar,” Lloyd says. “It would have been inconceivable five years ago to think that week in, week out, nonfiction cable shows would get four, five or six million viewers. Broadcasters have realised nonfiction programming can bring immense rewards and there’s a lot more competition for ideas. They are treating producers with more respect than ever before.”
Cineflix’s growth can be largely attributed to its openness to various financing models. “Some shows are co-financed, some are copros and some we make in Canada and roll out to the US. It’s a mix,” says Lloyd. Cineflix’s bigger-is-better philosophy is backed by Hollywood’s Participant Media, which earlier this year made an equity investment in the company. Cineflix has confidently entered the scripted arena with Copper, a period drama series for BBC America created by US playwright Tom Fontana and Oscar-nominee Will Rokos and executive-produced by Barry Levinson. Lloyd sees it as the natural extension of Cineflix’s nonfiction model, which he describes as “getting the best talent available, whether they be British, American or Canadian.”