Friday, October 31, 2014

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.


Anonymous said...

Some studios seem to be diversifying, making deals with Amazon while also working on shows for their the traditional channels. I wonder if Netflix and Amazon will become the major players in the global media economy. That would give them some crazy bargaining power and screw with any attempts at Canadian protectionism.

Janus said...

dude ur such a drama queen

Mark Mayerson said...

Janus, I've lived through several animation industry contractions and been unemployed as a result.

Until now, the internet has only been a theoretical market. It's been a place to show your work, but not a place with an economic model that could sustain a studio.

Now with Netflix, Hulu, CBS. iTunes, Amazon and HBO in the U.S. and Netflix, Rogers and Shaw in Canada all migrating to the internet, the dam has burst. TV as we knew it is disappearing before our eyes.

Who knows how much animation these companies will be interested in or how much they'll be willing to pay?

The internet has disrupted the music, newspaper and publishing industries. It's about to disrupt television and the TV animation industry. In all disruptions, there are winners and losers. The winners are generally the ones who can ride the wave of change.

The animation industry in Canada has always been conservative and under-capitalized. There's been little desire or resources to experiment or to pursue new markets. How many Canadian studios have approached these internet TV companies?

I'm afraid of what's coming. I hope I'm wrong.

Anonymous said...

Guru, Arc, and DHX are forging into the online market. I don't know what Nelvana or Mercury is doing.

Many other studios are cooperating with foreign co-producers, like in the case of ToonBox.

I think as long as the Canadian government keeps up some subsidies, the work will stay in Canada. If they drop the subsidies though there's a good chance it'll all go to India and China, and like a lot of French animators, Canadian animators will have to move there to follow the work (lots of French guys working at Oriental Dreamworks and at Dreamwork's satellite studio in India.)

Anonymous said...

Way back in ONCE UPON A TIME, time - animation was for theatrical release - shorts playing between features. The coming of TV brought a sea change to the theatrical market - people were staying home to watch the box in their living rooms. As a result, many animation units/companies shut down. What's happening today is no different.