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Brazil beefs up animation industry

Make sure to wear stretchy pants. That's just one snippet of friendly advice on conducting business in Brazil from Toronto, Canada-based independent consultant Tanya Kelen. Having recently returned from Rio de Janeiro where she attended AnimaMundi, one of the world's largest animation festivals, Kelen has become somewhat of an expert on Churrascaria, a variety of delicious skewered meats served up via an intriguing restaurant procedure that involves displaying different colored flags. She's also become an astute consultant in setting up kids TV series partnerships with nascent, yet eager prodcos in the country. In short, Brazil has a new appetite, and more importantly an emerging funding infrastructure, to get more long-form animated series off the ground.
September 4, 2009

Make sure to wear stretchy pants. That’s just one snippet of friendly advice on conducting business in Brazil from Toronto, Canada-based independent consultant Tanya Kelen. Having recently returned from Rio de Janeiro where she attended AnimaMundi, one of the world’s largest animation festivals, Kelen has become somewhat of an expert on Churrascaria, a variety of delicious skewered meats served up via an intriguing restaurant procedure that involves displaying different colored flags. She’s also become an astute consultant in setting up kids TV series partnerships with nascent, yet eager prodcos in the country. In short, Brazil has a new appetite, and more importantly an emerging funding infrastructure, to get more long-form animated series off the ground.

‘It was getting harder and harder to do co-productions with our traditional partners, so it was a Godsend that the Brazilian government and the independent producers in Brazil took the initiative to set up a system to foster international co-productions,’ says Ira Levy, partner at Toronto’s Breakthrough Entertainment. In 2004, Levy, who was then chair of the Canadian Film and Television Production Association, was invited to Brazil as part of a trade mission hosted by the just-established Brazilian TV Producers Association (BTVP). Set up with the support of the Brazilian government, the org aims to court international partners and learn as much as possible about the business of co-production.

Lobbying efforts over the last four years by BTVP – a public/private partnership between the Brazilian Indpendent TV Producers Association, the Brazilian Export and Investment Agency (Apex-Brazil) and the Audiovisual Department of the Ministry of Culture – helped launch a tax-incentive program. The initiative reduces taxes equivalent to invested amounts, which roughly 90% of independent producers in Brazil now benefit from. The government also supports the Brazilian film and TV industry through Ancine, the regional film agency that promotes the industry as well as processes submissions for co-production financing. (Brazilian companies must register all foreign partnerships through the body as well.)

Since 2004′s initial outreach to the international community, Brazil has scored 12 international co-production deals. Additionally, the Audiovisual Secretariat of the Ministry of Culture in Brazil created the AnimaTV program last year, which gave 18 animation projects US$60,000 each to produce pilots, and granted two US$520,000 apiece to produce 12 more episodes.

For Levy, the trip was eye-opening. In fact, it didn’t take Breakthrough long to pick up international distribution rights to Sao Paulo-based TV Pingium’s kids four to seven series Fishtronaut, which already had a deal with Discovery Kids Latin America.

Breakthrough was also one of the first to hop into a co-production with a local producer. Teaming up with Rio de Janeiro-based animation studio 2DLab in 2007, the pair developed 52 x 11-minute preschool series My Big Big Friend, which is now ready to launch with full eps at MIPCOM. Canuck preschool net Treehouse, Discovery Kids Latin America and TV Brazil got on-board with presales and Breakthrough hired top-notch Canadian writers to evolve 2DLab’s original concept about kids and their imaginary friends into an internationally saleable series.

‘It was important for us to partner with a company that had done this before,’ says Andre Breitman, executive producer at 2DLab. ‘All of the line production, all of the control of the process is being done by Breakthrough.’ And for its first international co-production, 2DLab grew from a 25-animator shop to one that houses 70 within four months. It can now handle the simultaneous production of two series.

Levy, however, found there was a steep learning curve in not only navigating the creative process with a new partner, but also in discovering that aspects of government funding shared by the two countries are handled completely differently in Brazil. We’ll get to that in a minute.

Economy and tax incentives

2DLab’s Breitman says a history of outsized inflation and high interest rates kept Brazilians from ever relying heavily on credit and sheltered the territory somewhat from the effects of the current global economic crisis. Right now, Brazil’s GDP is growing and jobs are being created, making large companies eager to take advantage of tax breaks. As such, there’s no shortage of corporations interested in the tax write-offs currently being offered by the government in exchange for donations to cultural projects, which include TV series.

The real trick, however, is figuring out who gets what. ‘You’re applying to use the tax rebate that those corporations are getting as part of your tax plan,’ says Levy. ‘It’s a much more circuitous route of getting the funding.’ In other words, he says, the money doesn’t come directly back to the producer. Instead, it’s necessary to get a donating corporation involved and then that private firm sees the tax rebate.

Additionally, Brazil’s National Social Development Bank (BNDES) has been allocating US$6 million annually to sponsor animated series. And in 2007, BNDES created a special line of credit exclusively for producers with co-pro partners. TV Pinguim’s Fishtronaut, My Big Big Friend and Mixer’s Doggy Day Care were the first to access the funds; each received between US$948,000 and US$1.9 million.

Jacques Bensimon, film commissioner at the National Film Board of Canada and senior consultant of international business for BTVP, has helped foster the relationship between Brazil and Canada and is advising Brazilian producers on how to connect with other international partners. ‘The advantage of working with Brazilians is that you can front-load the research and development phase,’ says Bensimon. ‘Usually in Canada, France or the UK, that money isn’t available until you get into the main phase of production,’ he says.

Breitman says My Big Big Friend is budgeted at roughly $US5.4 million. And Kelen, who was formerly head of distribution at Breakthrough and ushered in both its Brazilian co-pros, says the partners ponied up 50% of financing for My Big Big Friend. She adds that banks will back studios and advance between 30% and 50% of their financing needs, based on broadcast licensing agreements from Canada or other international territories. She estimates that putting the financing, together between licensing fees and private investment that’s tied in with tax incentives, can take anywhere from 12 to 14 months.

Working with Brazil

‘Once you get Canadian or American writers on-board, you can start creating to meet the requirements of broadcasters like Cartoon Network and Nickelodeon, which all have vibrant Latin American divisions,’ says Kelen. This bodes well as a means of tapping into the Latin American buy-in that a Brazilian co-pro partner often brings to the equation. It’s also not absolutely necessary to have a Brazilian broadcaster lined up to move into production, but Kelen says the country’s national nets are keener than ever to pick up locally produced shows – they get tax incentives for investing in license fees

The real bonus is that Brazilian networks, which have historically produced their own shows like telenovelas, don’t have much experience working with independent animation producers. This goes a way towards circumventing the ‘too many cooks’ syndrome in series development, as one of the investing broadcasters exerts little influence or interest in getting involved in creative development.

‘We are the perfect partner because we know that our broadcasters don’t have much power and we know that Canadian broadcasters, for example, really know their business,’ says Breitman. The set-up is a breath of fresh air for companies that traditionally co-produce with other strong territories and get stuck in the back-and-forth of editorial development that often waters down an original concept to appease key broadcasters.

Taking on the world

Kelen says Brazil’s multicultural sensibilities jibe well with Canada’s cultural outlook in particular, and creative development between the two countries is complementary for the most part. The challenges, she says, are educating smaller companies that haven’t ever produced a TV series and bringing top North American writers on-board.

Though Brazil has several co-productions with Canada under its belt, which have been central to the country’s foray into international partnerships, it also has treaties with other nations now. Breitman, who represents animators on the board of BTVP, says besides Canada, Germany is another country Brazil is developing strong partnerships with, and to a slightly lesser extent, deals are being sought with France, Italy, Spain and the UK. And while the US doesn’t sign co-production treaties, it’s the next frontier for Brazilian producers that are gaining credibility through the shows they’ve placed at the Latin American arms of major US broadcasters.

Finally Bensimon notes, ‘There is about US$65 million in business being done between Canada and Brazil right now – with American studios, it could be much higher.’

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