July 02, 2002 www.c21media.net
IN PRAISE OF COLLABORATION

There is no shortage of new animation techniques or unique and innovative projects in the animation business. However, industry is caught in the dichotomy between the vertical integration of the broadcast outlets on the one hand - witness: the Disney acquisition of Fox Family Channel - which leads to a focus on in-house productions and, on the other hand, the expansion of digital platforms with smaller footprint outlets with limited financial resources.

A discussion we have almost every day is whether the increase in the outlets globally is good for the animation industry. The answer is the archetypal 'good news/bad news' situation. The good news is that the increase in channels globally means there are much greater chances for our programmes to be broadcast. The bad news is that these channels cannot pay sufficient licence fees to support the production of those programmes.

This has forced virtually every producer to attempt to re-invent their financial models. The word 'coproduction' has almost become a mantra in the corporate boardrooms simply because no one company alone can face the difficult task of financing the production of these programmes as they had in the past.

Consequently, we have all had to find like-minded (or positioned) producers in other countries to share the risks and the rewards of these productions. It was not too many years ago that producers jealously guarded their distribution rights to productions and their broadcast relationships that had been built up over the years in other countries. These days we all gladly give up significant aspects of either in order to obtain production financing.

A good example of this collaborative approach is our involvement on Pirate School with BRB International in Spain and Red Sky Entertainment in the US. While Foothill would ordinarily want to retain a significant portion of the distribution rights, we had no problem in sharing those rights with BRB in return for their coproduction position.

Similarly, BRB is a company with a 30-year production history with a strong desire to retain a significant animation production presence on a show such as Pirate School.

However, for the sake of joining forces with others, coproducers are willing to share significant portions of the production in order to spread the risk. These are simply good business decisions made in the face of a changing financial climate.

It will be a number of years before this period of economic upheaval settles down. We are already seeing evidence of the rationalisation of these trends: several highly touted digital platforms and media companies have folded with the result that both investors and broadcasters are now seemingly more cautious about launching such ventures.

The broadcast-outlet acquisition mania that seemed to fuel the entertainment economy a few years ago has definitely run its course. Companies worldwide are re-focusing to concentrate on their core business. Add to this shift, the significant corrections that have occurred in the German and US stock markets, and one is left with an economic picture in the animation industry that is at best described as uncertain.

But one thing we can count on is the ingenuity of people pushing this business forward despite these difficult economic times. The overseas studios are now significant and meaningful partners in productions; more and more cross-border strategic alliances are being forged; country specific subsidy programs are being accessed more and more. Because there will always be kids, there will always be kids programmes. We all just have to keep getting smarter about how we get them produced.


Contact:
Jo KavanaghPayne
Gregory B Payne
805 965 4488

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