If it is ever made into a animated feature film, it would be billed as a Canadian epic-the amazing true story of how three ambitious young men, born of the freewheeling ’60s counterculture, worked hand-to-mouth out of a cramped Toronto basement, followed their creative bliss, stumbled, survived, and then succeeded beyond their own-or anyone else’s-wildest dreams.

As a prospective film script, the 30-year corporate history of the Nelvana animation studio would read as an over-the-top piece of adventure fiction, a mythic rags-to-riches fairy tale that could have sprung from the fevered imaginations of its own homegrown team of inspired animators. Yet its dynamic lead characters-Michael Hirsh, Patrick Loubert and Clive Smith-and its roller coaster plot-the transformation of a tiny production studio into a thriving, world class, CAN$600-million, vertically-integrated children’s entertainment powerhouse-are as real as the True North itself.

The facts speak for themselves: Today, Nelvana boasts the largest independent classic and contemporary animated character portfolios in the world. Through its global production and distribution business, the 600-employee company has completed over 60 major productions and delivers its programming to over 160 countries worldwide. Owned by Canadian media powerhouse Corus Entertainment, Nelvana’s comprehensive program library contains over 1,650 cumulative half-hour episodes, including such award-winning television and feature film properties as Care Bears, Franklin, Maurice Sendak’s Little Bear, Babar, Rolie Polie Olie and Pippi Longstocking. Its rapidly growing Branded Consumer Products business arm includes lucrative operations in children’s book publishing and merchandise licensing of its high-profile character brands.

In one of the toughest and most complex of all production businesses, Nelvana today dominates the North American airwaves with 23 animated TV series, pumping out an impressive volume of versatile, high-quality daytime and primetime cartoons that leaves its independent competitors in the dust. Year after year, the Canadian company has garnered a raft of industry awards and built a sterling reputation across the entire global animation industry, maintaining a state-of-the-art production facility in Toronto and expanding offices in Los Angeles, London, Paris, Tokyo and an international distribution arm in Shannon, Ireland. Even its fiercest competitors would concede that Nelvana established and maintains the gold standard for international co-productions.

So the obvious question arises: How has Nelvana managed to succeed when so many others have tried and failed? What’s its secret?

Once upon a time

Like many good bedtime stories, this one begins ‘Once upon a time in the 1960s…’ In 1967, Michael Hirsh, who had been making films since high school, fatefully met Patrick Loubert, an 18-year-old general arts student in his first year at York University. Together, they started making films with other students. ‘As a kid, I always wanted to be Superman or Mickey Mouse,’ recalls Hirsh. ‘I found out it was always easier to be Mickey Mouse.’

Unlike Hirsh, Loubert had only recently gravitated to film. ‘I had been hitchhiking in Europe during the previous summer, and I got a ride with an Italian film director visiting locations,’ he remembers. ‘I hadn’t heard of him. When I got home I looked up his films-it was Gillo Pontecorvo, a brilliant political filmmaker who had directed The Battle of Algiers. That was the beginning for me.’

Loubert bought a 16mm Bolex camera and started to play around with it. He was accepted by the London Film School, but decided not to go. Although York did not have a film program, Hirsh and Loubert made several small films as academic essays and projects. Then Hirsh shot a longer-format film with his partner Jack Christie and Tuli Kupferberg, a member of the satirical rock group The Fugs. With the revolutionary 1960s spirit of creative experimentation and freedom of expression reaching its zenith, Hirsh and Loubert, like many of their boomer peers, giddily rode the wave of the zeitgeist.

Loubert quit York in his fourth year, and he and Hirsh went to work for the American film company Cineplast, a producer of commercials using plasticine animation.

When the two left Cineplast, ‘we didn’t have a cent in our pockets,’ recalls Loubert. ‘We didn’t know what a career was. That first bit of misfortune gave us a renewed desire to follow our own path. Michael and I were certain of what we wanted to do and the spirit with which we wanted to do it.’

Even though a film and TV production industry did not really exist in Canada, Hirsh and Loubert decided to start their own company along with friends Jack Christie and Peter Dewdney. In sync with the times, they dubbed it Laff Arts.

‘We threw ourselves into the venture without really knowing where it would take us,’ reflects Loubert. ‘We were full of energy and dreams, but had no idea what we would be facing, nor were we aware of what we could achieve.’

It was then, through a chance phone conversation, that they encountered Clive Smith, an ebullient English animator, artist and musician endowed with an excellent reputation and abounding creativity. A graduate of London’s Ealing School of Art, where he earned a degree in Design and Kinetic Art, Smith began his career in 1964 with the small West London animation studio Group Two, animating The Beatles and The Lone Ranger series.

In 1967, after working as a freelancer on the Beatles’ animated feature film Yellow Submarine, Smith moved to Canada to work for Al Guest and Vladimir Geotzleman as a senior animator and designer on several short films and commercials. Among his many activities, Smith played in a band called ‘O’ with budding Toronto rock legend Carole Pope, who also painted cels for Al Guest. Today, Guest, the creator of Rocket Robin Hood, is considered one of the founding fathers of Canadian animation.

Staying alive

Early on, Laff Arts, now reduced to a trio with the departure of Christie and Dewdney, made a string of small experimental films, doing whatever kind of work it took to stay alive. The addition of the creatively super-charged Smith infused a new synergy to the fledgling outfit.

‘The beginning was chaotic to perfection,’ recalls Smith. ‘We did everything. It was necessary to draw at night in order to present projects in the day. We depended on our enthusiasm and our energy. There were always two of us to lift the spirits of the other.’

Smith designed Laff Arts’ first business card, which depicted a businessman in a suit. When you opened the card, his pants fell down. ‘Then some ad agency people with whom we were working told us to lose the wacky name Laff Arts,’ recalls Hirsh. ‘Luckily, Toronto has changed since those days.’

In 1970, Hirsh and Loubert purchased the rights to a black and white, World War II-era comics property called The Great Canadian Comic Books that featured such legendary cartoon characters as Johnny Canuck and Nelvana of the Northern Lights, a mythic heroine who lived out a series of adventures in the Canadian arctic. In 1971, they decided to incorporate the company under the name Nelvana.

For the first year, Hirsh lived in a house in downtown Toronto at Adelaide and Brant, Loubert lived on Toronto Island, and Smith at the far end of town. They assembled a makeshift plasticine set-up in Hirsh’s basement apartment, doing small projects for TVOntario and fillers for the CBC. They made a half-hour documentary on the Great Canadian Comic Books, interviewing the artists and pixelating some of their comics. Eventually, they mounted a traveling gallery show based on the comics.

Over the first 18 months, the trio lived off a Chargex credit card Loubert had received in the mail at university. ‘We ran the card up to CAN$7,500 before the bank cut it in half in front of us one day,’ he recalls. ‘We hadn’t even thought of the consequences. I said I never asked for the card in the first place, but that didn’t work. Somehow we managed to persuade the bank to give us a CAN$15,000 credit line-our first-ever financial transaction.’

During the early ’70s, Loubert learned how to write, edit and direct. ‘For the first five years, it was like going to film school,’ he says. They did anything to stay in the business, including writing a cartoon called Super Joe about NFL quarterback Joe Namath for Al Guest Animation, as well as editing and post-directing a documentary on the Toronto Stock Exchange.

Nelvana’s first real studio was located at 525 King Street West, a rented space that formerly belonged to the Toronto synthesizer group Syrinx, led by John Mills-Cockell, for whom Nelvana had produced a benefit film. Without an office or capital, Hirsh, Loubert and Smith worked all day and then held after-hours meetings in the Spadina Hotel bar just around the corner.

‘In the early ’70s, CBC was the only buyer in town, and animation was the only thing it didn’t produce itself,’ says Loubert. ‘So we’d say: ‘Oh yeah, we do animation!’ In fact, Clive was really the only one of us with some animation experience.’

Rena Krawagna, the CBC’s film buyer, took a shine to the young trio. ‘She was instrumental in keeping us afloat, commissioning 10 short fillers at CAN$1,500 each,’ remembers Smith. ‘It took us a while to figure out what a filler was. Filler was non-content-babbling brooks, clouds, flowers-anything designed to fill empty space between shows. It was like an early screensaver.’

With the CBC budget, they took the opportunity to make little projects that Loubert and Hirsh directed and Smith acted in, including a low-budget mixture of animation and live-action shorts for kids called Small Star Cinema. ‘There wasn’t much happening in animation in the days before computers and special effects,’ says Smith. ‘There was a lot of room for creativity and alternative ideas.’

And there was also the risk of physical violence. In one episode, ‘Mr. Pencil Draws the Line,’ Smith dressed up in a giant red pencil costume and ran around the city, ending up talking and playing with kids at Toronto’s Sick Children’s Hospital. At one point, as he was gamboling across City Hall in his outlandish outfit, a thuggish philistine seemingly threatened by Smith’s non-conformity began to scream at him and chase him down Queen Street-such were the professional perils facing the early pioneers of Canadian animation.

Christmas Two Step

Then Nelvana decided to get more serious, making a half-hour Christmas special for CBC called Christmas Two Step, a mix of live action and animation. It served them well because it pulled a few animators into the studio.

The first animator Nelvana hired was Woody Yokum, then a recent graduate of Sheridan College. ‘Today Sheridan is a world class institution, but in those days, it was brand new, like us,’ says Smith. ‘We offered one of the few opportunities for Sheridan animation students to work in Canada, which helped us grow.’

Slowly, Nelvana built itself a reputation in the budding industry. After toiling for six long years in the wilderness, its first big breakthrough came in the form of a fully animated half-hour TV special, Cosmic Christmas (1977), a story of a winsome boy named Peter who shows a trio of aliens the meaning of the Bethlehem star.

‘People warned us not to risk it,’ recounts Smith. ‘But what else were we going to do? We weren’t pressured emotionally to worry about success or failure in those days. We just did what we loved doing.’ The Cosmic Christmas project built the studio up from about 15 to 60 people, precipitating a move into the vast Toronto lakefront Terminal Warehouse (now Queen’s Quay) that pungently reeked of paint, cheese and fish from the incoming truck shipments.

Rather than bringing in talent from abroad, Nelvana lured Frank Nissen from Cinera to do layout and design for Cosmic Christmas. Dave Thrasher, Robin Budd, Charlie Bonifacio, Vivien Ludlow, Bill Speers, Wendy Perdue and Ken Stephenson formed a tight-knit animation crew.

Unlike the output of the large U.S. studios-Disney, Filmation, Ruby-Spears and Warner Bros.-Nelvana’s early TV specials sported an unconventional, non-uniform look. During the ’70s, Nelvana unabashedly served up raw talent and rejected the assembly line look of the larger outfits. The palpable sense of community among the Canadian animators made its way into their creations.

Breakthrough to the U.S.

Their skill did not go unnoticed. During production of The Devil and Daniel Mouse (1978), mega-producer George Lucas, impressed with Cosmic Christmas, contracted Nelvana to animate a 10-minute segment in his Star Wars Thanksgiving Holiday Special (1979) for CBS, a project designed to keep the popular Star Wars characters in the public eye.

The late 1970s was the era of the Canadian tax shelter, and Hirsh, developing into a deft strategic thinker, sought international presales to sweeten his investment packages, as licensing fees from the national CBC and Radio Canada networks were just not enough to survive on. For an upstart television company, cutting deals in 1976 meant calling up a friend who had a friend who knew a guy who rode the Long Island train with an executive at Viacom. It was a tenuous connection, but it got Hirsh through the door.

Jamie Kellner, the executive who rode the Long Island train, was in charge of first run syndication at Viacom. Attracted by the original story and novel use of music, he bought Cosmic Christmas on the spot and sold it to 185 stations in the U.S. Today, Kellner is Chairman and CEO of Turner Broadcasting Systems.

When the special pulled in 15 million viewers, Viacom lobbied Nelvana to turn Cosmic Christmas into a series. The offer precipitated the first disagreement between the partners. Hirsh pushed to do the series, but Loubert and Smith opted to build their catalog with high-quality specials. ‘We lost an opportunity to establish ourselves as creators of properties, rather than great adapters,’ says Hirsh today.

While Hirsh worked on fresh business angles, Loubert became the story and ideas man, and Smith concentrated his creative gifts on directing. The Devil and Daniel Mouse, the story of a mouse’s determined struggle to break a devil’s pact, proved a strong sequel to Cosmic Christmas. Nelvana then produced a roster of top-notch sequels-Rome-0 and Julie-8 (1979), Intergalactic Thanksgiving (1979), Easter Fever (1980), Take Me Up to the Ball Game (1980) and Herself the Elf (1982).

While the company continued to develop its one-offs, Hirsh kept in touch with George Lucas and cogitated about a feature film, Drats, conceived as the next generation of The Devil and Daniel Mouse.

With its pool of local talent, Ivan Reitman’s Heavy Metal (1981) had enhanced the profile of Canadian animation and raised expectations at home. After its string of strong half-hour TV specials and stint of service work for Lucas, Nelvana’s three principals threw themselves into Drats (later renamed Rock & Rule) with a consuming passion.

Rock & Rule

Originally conceived as a musical Pied Piper story aimed at a younger audience, the film was restructured and repositioned as a darker rock musical designed to also attract the target audience of Heavy Metal. Not only did Nelvana want to cater to kids, the traditional consumers of animation, but also hard-core teen and adult rock music fans.

The film’s characters live in a post-nuclear city inhabited with ‘drats’-humanoid rodents who have survived a holocaust. In this futuristic world, Mok is a musical superstar who wants to resurrect a demon that will give him all-consuming powers. The promise of a feature film project was an adrenaline rush for local talent and a lure for artists who had left to work abroad. The film brought together the greatest collection of Canadian animators to work in a single studio since Al Guest produced Rocket Robin Hood.

Nelvana’s instinct for signing hot musical acts was inspired, but the eight-year-old company still lacked the indisputable clout it enjoys today. Early in development, they had hoped to sign the young Bruce Springsteen as one of the character’s alter egos, but instead settled on the top rock group Cheap Trick. After brush-offs from Mick Jagger and David Bowie, they finally landed lggy Pop, Lou Reed, Deborah Harry and Earth, Wind and Fire. Visually, all the characters take a back seat to the elaborate special effects created by Keith Ingham and Nelvana’s capable camera operators Lenora Hume (later VP of Walt Disney International Animation) and Dennis Brown.

With a big pot of money to play with, Smith, the director, embellished every scene with shadows and highlights. In the days before computer animation, colors were modified by running two camera passes across scenes while experimenting with black window mattes and varying exposures. The crew created additional effects using pinpoint mattes, filters and a unique combination of slitscan and streak photography to elevate two-dimensional artwork to three-dimensional space. One of Smith’s greatest strengths-his ability to marry soundtracks and visuals-comes through strongly in the film, which today remains a cult classic.

Smith hoped to finish the project in one year, but it took over three. In the end, Rock & Rule (released as Ring of Power) catered to everyone and no one. MGM/United Artists opened the film in Boston for a one-week trial run. ‘It was guaranteed to fail commercially because there was no advertising budget to support it,’ laments Hirsh. ‘They buried it in their vaults after the unspectacular response.’ Rock & Rule was never released theatrically anywhere else. The CAN$8.4-million price tag-CAN$3 million over budget-brought Nelvana to the brink of bankruptcy.

While the commercial-not artistic-failure of Rock & Rule did not crush the company, it did dramatically rechart its production course. In the middle of Rock & Rule, Nelvana had moved out of the Terminal Warehouse over to 259 Lakeshore Avenue East. Rather than close its doors, Hirsh went to the marketplace and cut the deal he thought Nelvana should have made years ago: He took on TV series work. After years of carving out a niche in original animation programming, Nelvana accepted sub-contract and service production work to pay off its debt to the industry.

‘In a matter of six months, we brought in what amounted to 100 hours of television,’ says Hirsh. It included 65 half-hours of the TV series Inspector Gadget, a computer show and the CITY-TV fitness series 20 Minute Workout.

The goal now was cash flow. That’s when Nelvana became one of the first companies to use cartoons to sell toys by producing several episodes of Strawberry Shortcake for American Greetings Corporation and Kenner Parker Toys. Based on the Strawberry Shortcake deal, the company was contracted to do some Care Bears shows and the first of two Care Bear movies.

Care Bears: Boffo box office

The soft-and-cuddly Care Bears won countless adoring fans under the age of eight. Care Bears: The Movie earned CAN$25 million at the North American box office in 1985, making it the biggest-grossing non-Disney feature film ever released up to that time. The blockbuster also proved that movies could drive a lucrative merchandising business.

The success of Care Bears: The Movie led to a spate of films for young kids-another theatrical The Care Bears Adventure in Wonderland (1987) and Babar: The Movie (1989), Nelvana’s first international co-production. Then, unable to repeat the box office tally of the first Care Bears movie, Nelvana settled on steady series work. In 1988, Nelvana also started up an animated commercial production facility, Bear Spots, which operated for about five years.

‘Care Bears proved to be an economic savior,’ says Smith. ‘Our animators were loyal and understood why we were doing what we were doing and stuck it out with us. We started to learn to how to write stories for a TV series, which was a major learning curve.’

On Care Bears, Nelvana spent one-fifth of the budget and one-fifth of the production time it had devoted to Rock & Rule-and took the audience by storm. ‘That success sparked a deeper understanding of mass marketing and cross-over promotion to support the property,’ adds Smith.

In 1989, Nelvana moved into a former World War II munitions factory at 32 Atlantic Avenue, which today houses its integrated development, production, distribution and merchandise licensing operations. With its exploding volume of production, the company has recently consolidated its facilities under one roof at a nearby renovated warehouse at 42 Pardee Avenue.

TV work transforms Nelvana

Television work transformed the studio. In 1985, when he commissioned Nelvana to produce Droids and Ewoks, two Saturday morning cartoons for ABC-TV, George Lucas opened the doors for the relatively unknown, but up-and-coming star in kids animation, to the American marketplace. Nelvana became the first Canadian studio to break into the boardrooms of the major U.S. television networks and into the living rooms of American viewers. But even for a firm with a solid reputation, breaking in-and staying in-the gigantic U.S. market proved a tough challenge.

‘At that time, the networks weren’t focused on kids programming like they are today,’ says Hirsh. ‘They were interested in reliable performers more than new and innovative content. George Lucas’s influential position in Hollywood proved to be an important entrée into the networks. Very few Canadian entertainment companies have been able to carve out a competitive niche in the U.S. TV market, but we were careful to set ourselves apart and build our reputation as a supplier of consistently high-quality programming and as a leader in state-of-the-art animation production technology.’

Although the ABC shows didn’t perform particularly well, the network liked Nelvana’s production style and bought the Care Bears series. Once Nelvana wedged its foot in the network door, it sold more product. ABC purchased Little Rosie (1990), and Fox hired the flourishing studio to produce Eek! The Cat (1992) and commissioned Jim Henson’s Dog City (1992-94).

In 1991, Steven Spielberg’s Amblin Entertainment hired Nelvana to make the series An American Tail and Family Dog for CBS. The network, in turn, bought Nelvana’s independently developed Cadillacs and Dinosaurs (1993-94). With follow-up series such as Jim Lee’s Wild C.A.T.S. Covert Action Teams (1993-94) and Ace Ventura, Nelvana also became a regular supplier to CBS.

European expansion

In order to keep the infrastructure afloat, Hirsh prepared the company for the next logical step in its growth. In the late ’80s, Nelvana branched out from service production work for the American networks and waded further into Europe to forge strategic co-production partnerships after successfully co-producing the Babar series with France’s Canal+ in 1987.

‘Picking up the rights to Babar, the 1931 French book classic, was a critical moment for us,’ says Hirsh. ‘It set us on a new path, bringing well-known, best-selling classic children’s books to life.’ With the establishment of an international distribution operation, Nelvana could start building a valuable program library as an asset base.

Raising its profile in Europe, Nelvana partnered with Canal+ in creating a new production studio in France. Le Studio Ellipse was operational by March 1990, and Nelvana continued to option classic international kids properties like Rupert, The Adventures of Tintin and Maurice Sendak’s Little Bear.

Meanwhile, in its first season, Beetlejuice (1988-91), a property originated by hot American film director Tim Burton, won a Daytime Emmy Award and was picked up for syndication. The kinetic approach of series director Robin Budd was so innovative that his episode ‘Pest of The West’ was accepted into official competition at the Ottawa International Animation Festival in 1990.

As the 1990s unfolded, Nelvana emerged as a dominant player in children’s animation and the newest competition in prime-time cartoons. Bob and Margaret, an animated sitcom based on a British married couple who elevate the mundane to sublime comedy, was spun out of a 1995 Oscar-winning short Bob’s Birthday. The success of Bob and Margaret, Nelvana’s first prime time series, had a galvanizing effect on the studio, fuelling the company’s expansion into the highly visible prime-time market.

In the mid ’90s, Clive Smith directed the feature film version of the Swedish classic Pippi Longstocking, collaborating closely with German and Swedish co-producers as well as the book’s 92-year-old author, Astrid Lindgren.

Landmark deal with CBS

By the fall of 1998, Nelvana now ruled the Saturday morning airwaves on CBS. In an unprecedented landmark deal negotiated by Toper Taylor, a former William Morris agent who had been appointed president of Nelvana’s U.S. operations and the company’s fourth principal partner, the studio announced it would produce six half-hour animated series for the network. Called CBS Kidshow, it was the first children’s morning program block ever delivered by one production company for a U.S. broadcaster.

‘It was perfect timing,’ recalls Taylor. ‘We were now in a position to effectively manage a large volume of production and to guarantee high-quality product, making us competitive with the major studios.’

This triumph was followed in 2000 by a trailblazing multiyear deal with PBS. Nelvana now produces PBS Kids Bookworm Bunch, the first Saturday morning program block ever commissioned by an educationally-minded public network. The six-series deal firmly established Nelvana as the world’s leading independent producer of educational children’s programming.

Taylor was also instrumental in building a stable of creative talent that includes the crème de la crème of children’s literature. Nelvana’s list of contracted authors and illustrators reads like a Who’s Who of the kids book business, including such luminaries as Maurice Sendak, William Joyce, Rosemary Wells, Laurent De Brunhoff, Brian Jacques, James Marshall, Paulette Bourgeois, Brenda Clark, Andrea Beck, Mickey and Betty Paraskevas, Mercer Mayer and many more. Today, Nelvana is considered the leading buyer and adaptor of kids books in the world. But it wasn’t easy-many authors initially had no desire to see their works translated into animated TV series and films for fear of artistic compromise.

In a story that typifies Nelvana’s tactful, collaborative approach, Taylor tracked down a reluctant William Joyce at his home in Louisiana in 1997. He called him a block from his house and they met for a drink in a neighborhood bar before visiting Joyce’s home. Taylor saw a stack of drawings and offered to animate a sample. When Joyce saw the animation a few weeks later, he was won over on the spot. Rolie Polie Olie, now in its fourth season, went on to become a Daytime Emmy Award winner, the top-rated pre-school series on the Disney Channel, and the catalyst for Nelvana’s acquisition and integration of Windlight Studios, a state-of-the-art 3-D facility.

‘Because of our versatility and the intentional absence of an identifiable in-house animation design and style, each book-based property is faithful to the original published illustrations and graphic elements,’ says Taylor. ‘Our respect for the integrity and vision of an author and illustrator is what sets us apart from the pack and gets quality shows on the air. Our development-to-production ratio is one of the highest in the business.’

Returning to its roots

At the dawn of a new millennium, Nelvana was approaching a crossroads. The company had solidified its role as a steady network supplier, but it had taken 15 years for Nelvana to return to its roots-supporting original ideas.

The corporate agenda of Hirsh, Loubert and Smith had come full circle, dramatically bouncing back from the brink of bankruptcy in the early ’80s.

When the company went public in 1994, it was boosted by an infusion of capital, and by 1997, Nelvana was doing 100% proprietary work, growing and diversifying its production slate to astonishing new levels. Its acquisition in 1998 of Canada’s largest children’s book publisher, Kids Can Press, and in 2000 of California-based Klutz brought depth to Nelvana’s portfolio of book-based character brands and propelled the company’s merchandising and licensing activities with a diverse array of branded consumer products. In 2000-2001, Nelvana launched 23 animated TV series on U.S. networks and specialty services, more than any other supplier, including Disney, Warner Bros., Viacom and Fox.

Among the 23 series now airing, Nelvana is enjoying the highest number of hit shows in its history. Franklin, Maurice Sendak’s Little Bear and Maggie and the Ferocious Beast continue to top the charts on Nick Jr., while Cardcaptors, one of the two anime series acquired from Japan’s Kodansha, ranks among the top performers on Kids’ WB! And John Callahan’s Pelswick, the first animated series to feature a kid in a wheelchair as its star, is a critical and ratings success on CBC and Nickelodeon.

‘We do not believe in the globalization of cultures, but rather in their reciprocal enrichment,’ notes Loubert. ‘Clive, Michael and myself look for properties that deserve to pass from a life ‘in print’ to an audiovisual life form. We are inspired by all cultures and respect their unique characteristics.’

Today, Nelvana’s founders maintain the passionate spirit of their early careers, but on a much larger scale. Some say that Hirsh, Loubert, Smith and Taylor, are all visionaries, each contributing his own special skill. Hirsh cuts the deals with Taylor while Loubert rules the production operation and Smith holds the reins of visual development.

‘Over the years, Michael, Clive and I were able to carve out a place where we could stand alone and develop our own individual strengths, and still get along with each other,’ muses Loubert. ‘That’s probably why we’re still here after 30 years. If you’re all doing the same thing all the time, you’re not going to last very long. It’s like being in a band-everyone can’t play the same instruments.’

Merchandising boom

In 1996, Nelvana hired Sid Kaufman as the company’s executive VP of worldwide licensing and merchandising. An industry veteran, Kaufman had scored a major hit with the licensing and merchandising of Steven Spielberg’s Jurassic Park film, among others.

‘One of Nelvana’s great strengths is its rich slate of intellectual properties and its ability to get shows-and keep shows-on the air,’ says Kaufman. ‘This staying power helps drive the merchandising of Nelvana’s character brands.’ With over 45% growth each year over the past two years, sales of the company’s licensed product accounted for roughly 6% of total revenues in 2000.

In 2000, Nelvana attracted major licensees on the strength of the company’s key animated properties Cardcaptors, Babar, Maggie and the Ferocious Beast, Maurice Sendak’s Little Bear and Franklin. This included a multimillion-dollar U.S. marketing and merchandising partnership with Sears, the second largest retail chain in North America, to promote Franklin merchandise-toys, books, apparel and accessories-through its 850 U.S. stores. Over 30 million Franklin books have been sold worldwide in the last decade. As it forges ahead, Nelvana’s aggressive production slate will lead to even stronger licensing opportunities.

Going international

In 1987, the same year it opened its Paris production studio, Nelvana became joint rights holders of the classic Babar brand with The Clifford Ross Company. Today, Nelvana is credited with writing the book on the development of international co-productions. New international sales offices soon followed-London, Paris and Tokyo maintain full service offices to cover key territories directly.

Paris-based Emma Petry, executive VP of Nelvana International, first met Michael Hirsh at the Cannes Film Festival in 1987 when she was a young freelancer. ‘Eventually he offered me a job and I became involved in the co-production of Babar, one of the first international co-productions of a TV series,’ she recalls. ‘Little did I know how important the company would become in the European market.’

With Neil Court, Petry helped build a teeming worldwide distribution operation. She has since overseen co-productions of Tintin and Rupert and in 1999, France’s Teletoon licensed 200 half hours of Nelvana programming a year. Most recently, the major French network France 3 agreed to buy six new TV series and one co-production per year.

‘American programming dominates the world so it’s a challenge to launch European co-productions that successfully sell globally,’ says Petry. ‘The fact that the French do not perceive Canadians as brash makes international co-production relationships much easier to foster.’

Indeed, Canada’s long-standing international reputation as peacekeepers and diplomats is especially true of the animation industry. Canada’s traditional middleman position between Europe and the U.S. predisposes Nelvana to be sensitive to cultural differences and to broker deals that respect the fundamental integrity of any given indigenous property and, at the same time, successfully translate it to a worldwide audience.

Pat Burns first joined Nelvana in 1979 in the animation-checking department. Following a five-year stint at Hannah-Barbera and DIC Entertainment working in Taiwan and Korea, she returned to Nelvana in 1987 and was soon appointed VP of international production.

‘In the early days of international co-production, we had the luxury of time to develop and build solid, well-prepared pre-production and production methods,’ she reflects. ‘Following the success of Babar, we were able to pass on our expertise to each new international partner to our mutual benefit. Today, we have honed our negotiation and production skills to such a point that we can confidently meet the many different needs of our Asian and European partners without compromising the quality of our properties.’

‘We always strive to be true to the creative heart of any property,’ adds Cathy Laughton, managing director of Nelvana Enterprises in London. ‘Our tradition of quality comes out of our selection of diverse and unique properties and our awareness of the latest trends. Looking at our work, you wouldn’t think it all came from one studio.’

Laughton cites the continuity and synergy of Nelvana’s management as another major strength. ‘Collectively, there are a huge number of people they know throughout the industry. When I think I’ve made a new contact, I quickly find out that Michael, Patrick or Clive has known them for years.’

And as mothers of small children, both Laughton and Petry appreciate the executives’ flexible, enlightened attitude about balancing work and raising families. ‘Michael Hirsh, who is now a grandfather, told me that having babies is a wonderful thing-after all, we’re creating our own future focus groups,’ says Laughton.

Loyalty and longevity

When Steve Hodgins, senior VP of production, arrived at Nelvana’s Toronto studio as a producer in 1987, the company was gradually moving out of service work and into international co-productions.

‘Every year we wondered if we were going to get pick-ups from the networks,’ he remembers. Hodgins’s first big show was Beetlejuice, and he knew Nelvana was a good place to work: ‘We won a Daytime Emmy and I thought, ‘Well, this is easy!’

Beetlejuice proved to be lucrative, but Nelvana didn’t own it. ‘That’s when we actively began developing co-production relationships, like Babar, ahead of many of our competitors,’ says Hodgins. ‘When I first arrived, I was producing most of the shows and I was fixing the leaks in the roof too. It was like a tight little family working together towards a common goal. Suddenly, the family grew, and 20 producers moved in.’

Like many of his peers, Hodgins attributes a major part of Nelvana’s ongoing success to the well-honed skills, loyalty and longevity of its people, and the depth and variety of its programming.

‘Although I’ve had many opportunities to ply my craft in L.A., I’ve always wanted to stay and work here,’ he says. ‘Michael, Patrick and Clive are always approachable and informal. Their stake in the company is the biggest, yet they make you feel like your contribution is as important as theirs. Even though we don’t always agree, it truly is like a close family.’

Hodgins says Nelvana has also profited from a strong, long-standing senior core of creative producers, building a stable environment in an unstable industry. The company has developed its own separate and unique character, created as an extension of the personalities of the three founding partners.

‘Nelvana has so much depth and talent that you are always intellectually and professionally challenged,’ he observes. ‘We make programming that crosses all genres and styles-preschool TV series, prime-time shows, feature films, Internet programming, you name it. When I hire producers, there’s a small turnover. Who’s got more variety or challenge than us?’

‘If you take a property to a bigger company, they’ll give you the money, but they’ll also take the show away from you,’ he adds. ‘We want the rights holders to be creatively involved. If they are smart enough to create the property in the first place, we believe they should be part of it. We make them an integral part of the creative process, and that’s easier to do in a smaller company. It’s part of our personality. Our respect for the collaborative process is a real asset.’

Jocelyn Hamilton, VP of production, joined Nelvana in 1990 to work on The Adventures of Tintin and Beetlejuice. She has been responsible for overseeing the production of such hit series as Cardcaptors for Kids’ WB! and the brand-new epic serial Redwall. Hamilton is currently managing production of the successful PBS Kids Bookworm Bunch, Rescue Heroes and the new Japanese techno sensation Medabot.

Despite the constant turnover endemic to the global animation industry, Hamilton agrees that Nelvana has built a unique corporate culture that engenders a strong sense of loyalty and commitment among its employees.

Family feeling

‘No one says it’s treason if people leave to work for Disney,’ she says. ‘A lot of people come back. There’s a vibe about Nelvana that makes you stay-the people, the camaraderie, the feeling that you want to do well for the people here. It’s really about your own satisfaction in knowing you produce quality programming. We have grown significantly, but that family mentality has never disappeared.’

Hamilton says Nelvana can ride out the buffeting waves of change because of the enduring stability of the company and its management team. ‘When I first arrived here in 1990, I heard a story that some of our people voluntarily went without salary during much of the production of Rock & Rule because they cared so much-and they’re still here. I thought ‘Wow! That’s loyalty!’ Those mythic Nelvana stories rub off on new employees. The original core and spirit is still here-it’s just getting bigger.’

‘When we co-produce, it’s not about shoving our vision down someone’s throat,’ she adds. ‘We have a view, but we’re mindful that a big part of our growth is due to our phenomenal global reach. Our shows sell everywhere.’

‘It’s a work of passion at Nelvana,’ echoes Marianne Culbert, VP of production, who joined the company in 1993. ‘I’ve worked for broadcasters and production companies, and I’ve never seen a corporate culture like this one. When you walk into the building, you immediately feel a particular kind of tangible energy. Yes, there’s pressure, but the attitude is that you treat people well.’

Culbert notes that the high energy, imagination and playfulness inherent in Nelvana’s main audience-kids-is reflected in its day-to-day corporate culture and, ultimately, its programming.

‘People get so many opportunities to grow here-it’s like the Wild West. If you’re vocal about wanting to do something, you’ll get a chance and be supported. People might move from design to assistant director to director. We grow people internally and I think that’s why they stay. It’s very collegial, so you get a melting pot of ideas and talents, a lot of pride and passion. There’s no glass ceiling here. If you have the talent and the drive, you’ll succeed.’

Multicultural diversity

‘The multiculturalism of Canada is like a microcosm of the world, and Nelvana is like a microcosm of Canada,’ adds Culbert. ‘It’s integral to who we are, and it’s reflected in the diversity of our characters and shows. With each property, we’ll find its unique essence and stay true to it. From that foundation, we grow the property into a TV series or feature. That’s how Nelvana maintains a different visual look and style. And that’s why we can produce three different series at the same time. John Callahan’s QUADS! on Teletoon-an irreverent, politically incorrect show for adults based on a social misfit-has no relation to our kids properties.’

‘Nelvana is very at good at picking creative people who work and partner well with book authors and illustrators,’ comments Brown Johnson, a senior VP at U.S. children’s specialty TV network Nickelodeon. Beginning in 1994, Nick co-produced Maurice Sendak’s Little Bear with Nelvana, its first animated Canadian co-production, followed by pick-ups of Franklin, John Callahan’s Pelswick, and Maggie and the Ferocious Beast.

‘It’s always a pleasure doing business with Nelvana,’ she says. ‘It’s great at balancing the creative and business sides of the projects we work on. And both Toper Taylor and Michael Hirsh are great fun as people. It’s like being part of a big family.’

Breaking into Asia

Donna Friedman, executive VP at Kids’ WB!, the successful U.S.-based specialty network that targets six- to 11-year-olds, says Nelvana’s diversity of animation styles uniquely equips it to deal effectively with a wide range of broadcasters and cultures. Friedman recently licensed and worked with Nelvana on the ‘transcreation’ of Cardcaptors, a Japanese anime property that posed a challenge to adapt to a North American audience.

Japanese animation typically follows a formula in which the characters talk a lot at the beginning and the action doesn’t start until well into the show. Nelvana rebuilt the shows by combining episodes, making the heroine more heroic and dynamic and spreading the action around for adventure-craving North American kids. ‘The creative overhaul proved so successful that it’s now among the top 10 shows across every demographic,’ says Friedman. Kids’ WB! recently picked up Nelvana’s action adventure series Rescue Heroes, which begins airing this fall.

Nelvana’s Tokyo office opened in 1999 after Michael Hirsh hired Jim Weatherford, a freelancer with distribution experience whose personal bi-cultural heritage-having an American father and Japanese mother-uniquely equipped him to broker animation properties between Asia, the Far East and the rest of the world. Again, Nelvana’s tradition of international co-production savvy is making inroads into another complex, but potentially lucrative market.

‘The Japanese require a sustained period of ‘pre-negotiation,’ ‘ notes Weatherford. ‘Successful deal-making means making a lot of face-to-face contact, talking things out and gradually building trust and friendship. Japanese companies are like self-contained societies with their own particular identity, culture and values. Nelvana works hard at being sensitive to these subtleties and keeping the partners happy. It’s like a marriage-you may agree or disagree-but you’re committed to working things out over the long run.’

Weatherford sees Nelvana’s way of thinking as highly compatible with the Japanese sensibility. ‘Even Nelvana’s corporate e-mail addresses use the person’s first name-a personal, informal touch that you don’t see in most organizations,’ he says.

To tap deeply into the vast Asian market, Nelvana recently forged a relationship with Kodansha, the largest publishing company in Japan, which carries an enormous range of book, magazine, comics and multimedia properties.

‘It is difficult for other countries to start co-productions with Japanese companies, especially Americans,’ says Julie Ninomiya, licensing manager at Kodansha. ‘But Nelvana has shown it has a deft touch for our market, beginning with our successful adaptation of Babar.’

Ninomiya says Nelvana and Kodansha benefit from a shared philosophy regarding the adaptation of children’s books to animation: ‘We like Nelvana’s long-term marketing commitment to its products-it doesn’t try to rush a character through the market, but to grow it over time. We’re in a good position to capitalize on each others’ strengths and differences.’

At MIP-TV this year, Nelvana debuted its new Japanese series Medabot, a high-powered action-adventure show from NAS/Kodansha for six- to 12-year-olds featuring 387 pet robots and dazzling techno wizardry. Another Japanese co-production, Pecola, is the third project to come out of Nelvana’s state-of-the-art 3-D facility in Toronto.

New media strategy

In March 2000, Nelvana took another giant leap forward with the launch of a New Media division to focus on developing new applications, products and delivery channels. With the marriage of its technological capabilities and its extensive character portfolio, Nelvana has effectively positioned itself to benefit from the convergence of production, distribution, broadcasting and merchandising over the Internet.

Among its first projects, Nelvana New Media produced John Callahan’s QUADS!, the world’s first TV series produced entirely in Macromedia Flash, the award-winning technology for animation on the Internet. The half-hour prime-time Nelvana series, airing on Canada’s Teletoon, is the creation of John Callahan, whose edgy, widely published cartoons have gained recognition for the artist’s humorous and candid portrayal of his own life in a wheelchair. By creating a show in Flash, Nelvana has made a cutting-edge product that can be broadcast conventionally, but is also ready for web delivery.

In the summer of 2000, Nelvana New Media launched its newly designed premiere on-line family destination. Nelvana.com focuses on the company’s classic and contemporary character brands through interactive stories, games, postcards, e-mail and other customized entertainment experiences for children and families. The site is now growing to include all of Nelvana’s children’s brands, from preschool to adult prime-time titles, as well as offering branded merchandise from Nelvana’s licensees in its own on-line store.

Going 3-D

Nelvana’s attitude towards new technology applications can be best described as being on the leading edge, but not ‘the bleeding edge.’

Loubert first guided Nelvana into the computer technology age by establishing a state-of-the-art 2-D animation facility that employed the Animo software system to achieve the full range of ink and paint tasks traditionally completed by hand.

Then in late 1997, Nelvana bought Windlight Studios after it completed some pilot work for Rolie Polie Olie, which was sold to the Disney Channel. A state-of-the-art 3-D studio founded in 1993 in Minneapolis, Windlight had pioneered motion capture, a technique that uses electronic sensors to apply human motion to animated characters.

Scott Dyer set up the 3-D facility at Nelvana in 1998 and today works as chief technical officer, coordinating the 3-D, New Media and IT departments.

‘Nelvana has always been a company that adopts new technology at the right moment,’ observes Dyer. ‘We made a 3-D show in ’98 although other companies were doing it in ’95. But the technology had not yet reached the point where it was cost-effective. We came in only when we felt we could compete. Nelvana tends to adopt technology cautiously, but once it does, it gets it up and running quickly and becomes successful quickly.’

Nelvana uses websites to support its shows, ‘but we’re not out there saying we have to make a million dollars on each website or we’ll collapse,’ says Dyer. ‘Kids websites are now dropping like flies, so our conservative approach has worked to our advantage.’

For the first time, Nelvana’s New Media division is allowing the company to contact its customer and consumer base directly and develop one-to-one relationships. ‘In the past, kids would interact with the shows via the broadcaster,’ says Dyer. ‘We can now connect distribution and content-and the sky is the limit. We want to be a frontline player in all the delivery mechanisms that are out there, whether interactive TV, wireless technology or websites.’

Nelvana has always been about taking an integrated approach to entertainment, notes Dyer: ‘We’re well known for our TV shows and films, but we also have a spectacular merchandising program and strong affiliations with book publishers. New Media is another complementary part of our whole integrated approach to a brand. It’s important to us to be able to take a powerful brand like Franklin and move it to all the different levels. We know kids are increasingly moving away from TV to the computer, and we want to make sure our properties are available on-line as well. We want kids to have a complete experience, whether watching TV, surfing a website, playing a game, or reading a book.’

The American-born Dyer finds that there’s a much more profound respect for diversity in Canada than in the U.S.: ‘That diversity extends to the corporate culture of Nelvana and the products we create. It’s a major part of why I moved here. The U.S. is all about homogeneity. In Canada, it’s about everyone being different. I’m a prime example of the reverse brain drain. Also, there’s a freedom and atmosphere here that you would never find at a giant company like Disney. In the end, I think that feeling of comfort and informality translates to a better, higher-quality product.’

Corus Entertainment

In September 2000, Nelvana turned another page in its history when it was acquired by Corus Entertainment, a leading Canadian media company consisting of radio stations, specialty TV networks (including YTV and Treehouse), pay TV, and digital music and advertising services.

‘It was not an easy decision emotionally, but Corus was a perfect fit for us because it owns Canadian broadcast outlets,’ says Loubert. ‘And the vertical integration model-having production, distribution, publishing and merchandising under one roof-allows us to compete globally.’

Stocking the artistic gene pool

Nelvana’s knack for reciprocal, creative collaboration reaches right back to its seminal relationship with Sheridan College, an Oakville, Ontario-based community college founded in 1970 that, like Nelvana, has since blossomed into a world-class institution. Today, Sheridan is considered the Harvard of animation schools.

‘Over the past 30 years, we have shaped the animation industry in Canada together,’ says Deborah Fallows, Nelvana’s director of recruiting. To date, roughly 50% of Sheridan’s alumni-about 1,000 professional animators-have worked at Nelvana’s studio, systematically stocking and replenishing its artistic gene pool. This year, Sheridan will graduate over 80 students, the highest in its history.

Nelvana’s ties to Sheridan include the supplying of working materials, an award for best student film, and a summer internship for second-year students. Two senior Nelvana artists, Sean Selles and Will Makra, teach part-time at Sheridan.

Nelvana has also developed relationships with the Ontario College of Art and Design, Algonquin College in Ottawa, Capilano College in Vancouver, the Vancouver Film School and Mirmachi College in New Brunswick. ‘It’s vital that we support these schools as they supply our future talent,’ says Fallows.

Because of the general lack of writers with animation experience, Nelvana also operates an annual in-house writing program. Run by writer Susan Snooks, whose credits include Nelvana’s production of The Edison Twins for CBC, the writing program is another example of the studio’s desire and ability to sustain and replenish its creative reservoirs. In the end, the entire industry benefits.

‘Our strength has always been our people,’ says Fallows. ‘Kids come out of Sheridan College, work at Nelvana, and then get picked off by other studios. We never fight that trend because we know that many of them will eventually come back.’

Living the dream

Thirty years later, Nelvana’s three co-founders look back at the creation and evolution of their brainchild with a mixture of wonder, pride and humility. And they look forward into the future with their trademark instinctive grasp of the mercurial animation business.

‘There’s going to be dramatic changes in the marketplace,’ predicts Smith. ‘Animation is attracting a wider audience and animation itself is going to be redefined as just another form of expression in entertainment and film. The Internet has had an impact on certain basic animation techniques, allowing artists to put out ideas without going through a structured corporate or broadcast philosophy of what the world should be seeing. Feature films are using digital animation in more and different ways every day. As these new technologies evolve, the whole look of and market for animation is going to change.’

‘Starting a small business and surviving in Canada is extremely difficult,’ muses Loubert. ‘If you can hang in, you’ll learn your lessons in the first few years that will let you get a foothold to stay in business. We refused to go out of business when people told us we should. We worked through the rough patches. We had a series of good, solid, small hits. I have seen other companies flounder because they achieved too much success and money too soon. So the steadiness of our success has worked well for us.’

‘From the very beginning in 1971, even though we had no money and no studio, we all thought of Nelvana as a real company,’ adds Hirsh. ‘Even though there was nothing there, we pretended there was. We were living in a dream world, but we treated it as if it was real and we made it real. If you live the dream, the dream will come true. If you build it, people will come and play.’

As Toper Taylor puts it, ‘Nelvana’s programming has the Good Housekeeping Seal of Approval. You know what you’re getting when your kids watch our shows-quality, quality, quality’

And who knows, some day, some ambitious young animator may pitch a far-fetched script called Nelvana: The Movie-the true story of three men and a baby animation studio-and make yet another dream come true.

Acknowledgment: Parts of this article were drawn from Cartoon Capers by Karen Mazurkewich (McArthur & Co., 1999).