Canadian TV is Dying. Does Animation Know it?

Over the last year, Rogers and Shaw, the two largest cable TV suppliers in Canada, have lost a total of 200,000 subscribers.  That has enormous repercussions for TV producers, including animation studios.

YTV is one of the major outlets for Canadian TV animation.  It is part of the basic cable package, which means that everyone who has cable TV in Canada automatically receives YTV.  YTV receives money for each cable TV subscriber, and it has lost the fee from 200,000 people in the last year.  In addition, it earns money from advertising and its ratings must have suffered by some amount, as some of those 200,000 people must have watched YTV.

Teletoon is part of a cable bundle, but surely some of those 200,000 people were paying for Teletoon.  As Teletoon also sells advertising, the smaller audience has cost Teletoon income on two fronts.

The cable companies are rapidly diversifying away from TV.  Rogers and Shaw have partnered in Shomi, a Netflix-like service that makes content available on demand.  Rogers has now partnered with Vice, which will produce content for them.  The money quote that justifies the deal is that there is a “dramatic shift in Canada’s media landscape which sees young people increasingly consuming news and entertainment from their mobile and digital devices.”

Bell Media is creating its own streaming service.

What are the repercussions for Canadian animation?  It means that broadcasters such as YTV, Teletoon, and Family Channel will have less money to spend on new programming.  Either they will buy less or buy the same amount but provide less money for each.  Either way, the TV market for Canadian animation is going to get tougher.  The future is online and the cable companies know it.  The animation studios that grasp this are the ones most likely to survive.

Is Canadian TV Animation Heading for a Cliff?

The TV animation business in Canada is on a roll right now.  There's a lot of work out there, as a glance at the job board at Canadian Animation Resources confirms.  While animation in Canada includes visual effects, features and videogames, TV still makes up the greatest proportion of production in terms of employment and the amount of material produced.

However, there are trends in several areas that make TV animation vulnerable.  The ground is already shifting and there are more shifts to come.

Television in Canada is regulated by the Canadian Radio and Television Commission.  This government body determines which new channels will be allowed to exist, sets quotas for Canadian content and determines how much money from cable fees will be set aside for Canadian production.

The CRTC is aware of the effect that the internet and internet TV providers such as Netflix are having on the market and have been holding hearings to determine how regulations should change.  There are several possibilities being considered.  One is unbundling. 

The CRTC has declared that certain channels such as YTV, a major Canadian animation market, are part of the basic cable package.  In other words, everyone who has cable is forced to pay money towards YTV.  Other channels featuring animation, such as Teletoon and Family Channel, are part of packages.  You cannot buy these channels on their own.  There are customers who don't care at all about animation who are contributing money towards these channels by purchasing the package they're included in.

Should the CRTC unbundle, allowing viewers to purchase only those channels they want, no one can predict how this might effect the demand for animation channels.  The number of cable channels using animation has expanded to include Nickelodeon, Teletoon Retro, Cartoon Network Canada, Disney XD, Disney Junior and Treehouse.  Can the Canadian market support all of these channels in an a la carte world?  Can studios survive if the number of Canadian buyers goes down?

There is an entire generation that has replaced TV with the internet.  The term "cord cutting" is used to describe people who give up cable TV, but there are many young adults who haven't had cable TV since leaving their parents' homes.  Walking in Toronto, I see children in strollers playing with iPads.  In a world of on-demand entertainment, does the concept of a broadcast schedule have a hope of surviving?

The shrinking audience is affecting even mainstream programming.  W5, a 60 Minutes-like news show has just cut production on the number of episodes for the coming season and laid off staff due to shrinking ad revenues. 

Many in Canada subscribe to Netflix instead of cable.  No money spent on Netflix is re-routed towards Canadian production as it is with cable bills.  This means that the Canada Media Fund, which funnels money towards various productions, has less to work with.

Finally, there is the issue of tax credits.  Ontario just had a provincial election, so the government will be stable for the next four years, but it is trying to eliminate a deficit. No poll of the general public has ever put tax credits for media production high on the list of priorities.  As a result, I would not be surprised to see the tax credits frozen at best and I anticipate some amount of claw back.  Certainly, they won't increase, which means that if another jurisdiction surpasses Ontario's tax credits, work will leave Ontario.

While content quotas, bundling and tax credits have their place, especially for new enterprises, they turn into an addiction.  Ultimately, animation has to please the public if it is to survive.  Instead, too many studios have focused on satisfying regulations that generate money rather than on creating viable entertainment.  I fear that they have built their enterprises on a foundation of sand.  I have seen contractions in the Canadian animation industry in the past and they're not pretty.  I hope that studios are preparing for changes that may destroy their current business model.

To learn more about this, read Michael Geist and listen to this Canadaland podcast.

Book Review: Genius Animated: The Cartoon Art of Alex Toth

This is the third volume by Dean Mullaney and Bruce Canwell chronicalling the life and career of Alex Toth.  Toth spent the bulk of his career illustrating comic books but spent a significant portion of his life designing animation for TV.

The earlier two volumes focused on Toth's work in comics and included a fair amount of biographical material from Toth's co-workers and family.  This volume is entirely about his work in animation, though the text is sparse and frankly not very valuable.  The interviewees, including Mike Kazaleh and Robert Alvarez, never worked with Toth.  The bulk of the book are designs, model sheets and presentation art that Toth created for TV cartoons.

Toth was a master of composition and design.  His cropping is unusual and he constantly tried to strip down his drawings to their essentials.  His use of blacks, patterns and textures went far beyond what most other artists in comics or animation concerned themselves with.  His influences included Noel Sickles, Milt Caniff, and Jesse Marsh.

 His initial foray into animation was Space Angel, and in many ways it sums up the issues surrounding Toth's animation design.  Toth's drawings for the show are excellent, but the drawings don't move.  The lip synch was done by photographic real mouths and superimposing them on the drawings.  While the graphics are very sophisticated, the motion is primitive. 

 
While Toth simplified his work for later animated shows he designed for Hanna Barbera, there was always a considerable gap between the quality of the designs and the style of motion.  Joe Barbera used Toth's work in his sales pitches to networks, but it was all smoke and mirrors and everyone agreed to ignore the truth.  The artists at Hanna-Barbera couldn't draw as well as Toth and there was never a hope that there would be a consistency between the style of drawing and the style of motion.  The network executives knew that the shows would never look as good as Toth's presentation art, but the limited profits for Saturday morning cartoons were not enough to cause them to bother about it.

While Toth groused about the quality of the comic book scripts he was given, they were far better than the animation that resulted from his work.  People forget how truly terrible TV animation was in the 1960s and '70s.  Toth designed the first TV version of Marvel's Fantastic Four.  Take a look at how poor the show's opening credits are.

There are people who are nostalgic for shows Toth designed like Space Ghost or The Herculoids. Toth may have improved the quality of the designs, but the shows never rose to the level of his work.

There are a lot of great drawings in this book.  All three volumes are valuable for showing Toth's evolution as an artist and demonstrating what's possible in visual storytelling.  The third volume leaves an important question unanswered, though.  Are Toth's drawings, as good as they are, appropriate designs for animation at all?  Given the realities of the marketplace, are the designs functional? Perhaps Bruce Timm and company came closest to answering the question, but even their shows feel compromised in terms of motion to me.

Many have commented that Toth is an artist without a monument.  He has no work universally acknowledged as great or remembered by the audience.  That's the tragedy of his career, but it doesn't negate the quality of his drawings or design.  Every Toth drawing is an education, and that alone makes this book, and the preceding volumes, worth having.

Sick Little Monkeys

The story of the making of Ren and Stimpy is one of an irresistible force meeting an immovable object.  The irresistible force was John Kricfalusi, a veteran animation artist who was disgusted with the quality of TV animation.  He was determined to push the art and humour closer to the Warner Bros. cartoons he admired, though with a decidedly personal twist.  The immovable object was the TV industry, specifically cable channel Nickelodeon.  Like all channels, it was dedicated to budget restraint, regular air dates, and bland content that wouldn't provoke attacks.  From the start, this relationship was a disaster in the making.  The surprise, though, is that it produced a hit show.

Thad Komorowski's book, Sick Little Monkeys: The Unauthorized Ren and Stimpy Story, exhaustively examines the behind-the-scenes goings on.  He starts with John K's career in Saturday morning cartoon factories and details his relationship with Ralph Bakshi.  Together they made The New Adventures of Mighty Mouse, a sort of precursor to Ren and Stimpy.  Even before Ren and Stimpy, Kricfalusi was butting heads with broadcasters, as his experience on the short-lived Beany and Cecil revival shows.

For those not familiar with the history of Ren and Stimpy, it was one of Nickelodon's first three original animated series and the one that attracted the most attention.  There was no question that John K's sensibility was a success with audiences.  However, right from the start, the show developed schedule problems due to a mismatch between what the artists wanted to make and what Nickelodeon was willing to air. John K. was another factor delaying production, as he wasn't willing to approve things until they met his standard.  When the delays continued during the second season, Nickelodeon fired John K. and his studio.  Nickelodon created its own in-house studio to continue production and Ren and Stimpy lasted for another three seasons without John K.

While that might have been the end of the story, John K. was reunited with his characters when another cable channel, Spike TV, revived the series for an adult audience.  Unfortunately, Kricfalusi's insistence on meeting his vision at any cost doomed the revival.  While the order was for just six episodes, only two made their air dates and the last delivered a year late.  Spike lost interest in the show and didn't bother to play three of the episodes.

John K. is a controversial figure who divides artists and fans into those who support him and those who think that he is responsible for his own misfortunes.  Komorowski walks the middle ground, showing that all parties made mistakes and refused to consider the others' point of view, but he does not excuse Kricfalusi's behavior.  Komorowski talked to many artists who worked on the show and quotes many Nickelodeon executives on the problems they faced getting episodes on air.  While I don't doubt that people involved in the production could quibble with Komorowski's version of specific events, it strikes me that the book is even-handed in apportioning credit and blame.

Fans of the show will enjoy comparing their opinion of each episode to the author's and learning of material that was cut and censored.

If you are not a fan of the show, this book is still worth reading for the light it sheds on the workings of the TV animation business.  There is always tension between artists and business people over resources and content.  People working in TV animation and those with ambitions to create shows need to understand the pressures and the pitfalls that shape the business.   Sick Little Monkeys: The Unauthorized Ren and Stimpy Story is a cautionary tale about walking the fine line between artistic ambition and the reality of the marketplace.

DHX Buys Cookie Jar

Update: Canadian Animation Resources has links to stories with more information.

This may only be of interest to those working in the Canadian animated TV field, but DHX has bought Cookie Jar.  While consolidation makes it easier for the two studios to compete internationally, it also makes it harder for independent producers to get their work on Canadian TV.

Michael Hirsh, CEO of Cookie Jar, was one of the founders of Nelvana.  Cookie Jar rose out of the ashes of Cinar, a Montreal company that was plagued by scandals over fraud with regard to government tax credits and suffered from the untimely death of co-owner Micheline Charest.  Hirsh reorganized Cinar into Cookie Jar and bought DIC in 2008.  There was speculation from the beginning that he intended to take the company public.  While that hasn't happened, there's still a large payday for Cookie Jar's owners.

DHX is the result of the 2006 merger of Decode and the Halifax Film Company.  The merged entity later went on to purchase Vancouver's Studio B in 2007.

Whether this means that Michael Hirsh is retiring or will take a position with DHX is unknown at this time.

The Continuing Evolution of TV Economics

348,000 people in the U.S. cancelled their cable in three months time.  Why?  This article suggests that the use of OTT (which stands for over-the-top) boxes, used to access Netflix and Hulu, are responsible for the drop.

To date, the majority of what's available on Netflix and Hulu is pre-existing material.  In other words, the production of this content was paid for under the existing TV model, where broadcasters pay a license fee and producers sell to multiple markets in order to finance their shows.

But if the number of cable subscribers continues to drop, subscription fees and advertising revenues will also drop, making it even more difficult to finance original programming.

TV's evolution from a business standpoint has been very interesting.  Initially, when there were limited choices over the air, every program got a substantial audience.  A show didn't have to be the best, it only had to be the best in it's time slot, and the competition was less than half a dozen shows.  Everything had a sizable audience, which meant that everything was able to attract solid advertising revenue.

Then came cable and the 500 channel universe.  With more choice, viewership for individual shows fell.  That meant less advertising revenue and budgets were reduced as a result.  That's where reality programming came from, whether it was Survivor or the Home and Garden channel.  Cheap programming became the standard instead of the exception.

Now, with OTT, the ground has shifted again.  In a 500 channel universe, competition was still somewhat limited.  A show was still competing against everything on in the same time slot, there were just a lot more shows.  OTT is built on the idea of on-demand programming, which means that a show is now competing against everything on at the moment and everything in the libraries of OTT service.  And if people continue to dump cable, then newer shows are cut off from that revenue stream.

The trend has been towards a continuing fragmenting of the audience into smaller and smaller chunks for each show.  We could theoretically reach a point where a show is competing against every show ever made as well as every movie ever made.

As the audience for each show gets smaller, how do you finance a show?  Lower budgets are not the answer if you're competing against past product made with good budgets.  This is especially true for  animation, as older shows date less badly than live action and children are less sensitive to when a show was made anyway.

I'm very glad that I'm not depending on the TV market for my livelihood anymore, and I wonder how aggressive TV animation studios are at finding new revenue streams.  Budgets have been shrinking for years and will continue to shrink.  Even The Simpsons is being done for less money (since 1991, viewership is down by 66%).  At what point does the creation of animated TV become unsustainable?  And what replaces it?

Fred Moore, Where Are You?

Let's see.  There's seven of these little guys.  Could it be?  Why yes!  It's the seven dwarfs.  Well, they're public domain, so anybody can use them, right?  What's that?  This is a Disney project?  DISNEY?

Welcome to 7D, a new TV series for Disney Jr.   Quick!  Which one is Doc and which one is Happy?

The Genius That Was Pocoyo

If you've ever worked on a TV series, you know the limitations. The budgets are tight and the schedules are short. There is always the danger of attempting something too ambitious for TV or letting the limitations restrict everyone's creativity. Either way, the end result is mediocrity.

Usually, the first casualty of TV schedules and budgets is the animation itself. Whether it is subcontracted to a low wage studio or not, it still takes a lot of time to get done. Shows often throw the animation overboard, relying instead on the scripts, the audio tracks and the designs to keep the audience entertained.

Occasionally, though, somebody decides otherwise. Pocoyo is a pre-school cgi show made in Spain. The creators, Guillermo García Carsí, Luis Gallego and David Cantolla, made conscious design choices that free them up to move the characters. What are they?

• No backgrounds
• Little to no dialogue
• A limited number of characters

Most TV series will have the characters go into new environments at least occasionally. That requires design and in cgi also requires modelling, texturing and lighting. By eliminating backgrounds all together, there's a significant time and money saving.

Many pre-school shows just use a narrator. It makes it easier to create versions of the show in different languages in that there is only a narration track to replace and it can be done with only one performer, not a cast. The lack of dialogue also forces the animators to communicate visually.

By limiting the number of characters, once the design, modeling and rigging of the characters is done, that's it for the series. No new neighbors, visitors, villains, etc.

As the design, modeling, rigging and texturing jobs are limited in scope, the money normally spent on them can be put into performance. The Pocoyo characters move in distinct ways. Their rigging is excellent, resulting in playful shape changes and funny movements.

In addition to these creative choices, the show has something that's hard to write into a budget or schedule: charm. It's just fun to watch. There are pre-school shows I find deathly boring or puerile. Pocoyo is a show that doesn't need apologies. It works for pre-schoolers, for their parents and certainly for animators.

Two other things are worth mentioning. Where many North American shows now default to 11 minute episodes, Pocoyo is roughly 7 minutes per episode. That gives the show a snappy pace where other shows feel padded to fill their running times. The other thing is that for years, the conventional wisdom was that holds don't work in cgi. Pocoyo proves they do. It's not the cgi that makes holds feel dead, it's the designs and style of movement. Pocoyo's designs are cartoony enough and the movement stylized enough that holds work. That's another money-saver, too.

The first season is the best. Unfortunately, when it came time to do another season, somebody decided to "improve" the series. While Pocoyo is a perfect example of "less is more," somebody decided that less wasn't enough. Characters were added and so were environments. Instead of Pocoyo and friends living in limbo, they now visited cliché environments like the sea bottom and outer space, making it just another pre-school show.

While the original vision lasted, however, Pocoyo showed that there are artistic choices that can overcome TV's budgets and schedules. As TV budgets continue to shrink, animation doesn't have to be sacrificed unless the producers want it to be.