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Inside Nelvana’s strategy to find its next hit

Known for evergreen preschool brands like Franklin and Max & Ruby, Nelvana heads into its 50th anniversary without any recent global hits. But the Canadian prodco has a plan to change that.
June 14, 2021

What will the legacy of 50-year-old Nelvana be? Co-founder Michael Hirsh believes it’s the Toronto-based prodco’s impact on the Canadian film and television industry.

“When we started Nelvana, not only was there no animation industry in Canada, there was no film or television industry, either,” he says.

In 1971, just two Canadian broadcasters were on air—CBC and CTV—and most of their content was made by in-house teams. Many independent production companies in operation at the time were focused exclusively on documentaries. In fact, Nelvana was among the first indie studios to get into children’s content.

Today, Canada has a thriving film and TV industry that generated around US$1.6 billion in revenue in 2019, according to Statistics Canada. And Hirsh credits Nelvana for helping to pave the way.

The company’s other two co-founders, Patrick Loubert and Clive Smith, believe Nelvana’s real legacy is the many influential people who have passed through its doors—like 9 Story CEO Vince Commisso, Fresh TV CEO Tom McGillis and Jocelyn Hamilton, president of eOne TV.

And for kids in the 1990s and 2000s, Nelvana’s legacy is all about the shows that shaped their generation. There was a time when you couldn’t turn on a TV anywhere in the world without seeing Nelvana’s content. Franklin, Babar, The Magic School Bus, Tintin, Clifford, Maggie and the Ferocious Beast, Pippi Longstocking—the Canadian prodco had its hand in some of the most iconic kids hits at the turn of the century.

But it wasn’t a fast trip to success. When Nelvana first started out, the founders had $10 between them, Hirsh says, with Loubert adding that he paid for everything on an ill-advised ChargeX credit card. Their first office was an old apartment with a bathtub in the middle of the room, which employees occasionally used when they worked late.

But the prodco focused its resources on building up a large library of original IPs, and the bet paid off. According to the founders, when Corus bought Nelvana in 2001 (for US$455 million, according to a press release at the time), what the broadcaster really wanted was access to its extensive back catalogue of 1,450 half hours of content.

Corus has made good use of that library over the years, but Nelvana hasn’t had many hits since the founders left (Loubert and Smith in 2001, and Hirsh in 2002). As it looks ahead to the next 50 years, the company hopes to recreate some of that early magic. From live action to animation, TV series to feature films, and preschool to tweens—Nelvana is chasing a hit by any means necessary.

The first plan of action is to invest heavily in creating new IPs. Nelvana is in the midst of tripling its spend on development, with plans to invest US$10 million between 2019 and 2022, says Colin Bohm, Corus Entertainment’s EVP of content and corporate strategy.

The goal is to have a well-financed pipeline with a little bit of everything in the works— including live action and animation (story- driven and character-driven) for TV and movies, targeting every demo from preschool and bridge to six to 11s—says Pam Westman, Nelvana’s current president. “You just don’t know what your customers are going to turn around and say they [need],” she explains.

For every five shows that get a greenlight, Westman thinks at least one or two could become the next big thing, though she admits it hasn’t happened since she joined the company in 2016. “You need a lot of at-bats to get a home run.”

Nelvana plans to lean on several popular existing brands to increase its odds at scoring a hit. For example, when the studio branched out into slightly older-skewing live action, it tapped the well-known Hardy Boys IP. And Westman is eyeing Max & Ruby for the big screen next.

Book brands like Hardy Boys, Max & Ruby, Magic School Bus and Little Bear have long been part of the prodco’s success strategy. According to Variety, when Nelvana acquired Kids Can Press (KCP) in 1998 for roughly US$4 million, its marquee series Franklin had sold 16 million books worldwide and was in its second year of TV production.

Nelvana is considering adapting Max & Ruby as an animated film.

Nelvana is considering adapting Max & Ruby as an animated film.

The purpose of the KCP acquisition in the ’90s was to own even more of Franklin’s touchpoints, says Hirsh, figuring the success of one would feed into the other and bolster the company’s bottom line. It’s a strategy Westman hopes to repeat with a new approach to Nelvana’s distribution.

Owned by Canadian broadcaster Corus, Nelvana has been able to experiment with more platforms. And it has found that hits on YouTube drive viewers back to the linear preschool channel Treehouse (and vice versa). The more often kids interact with a property, the more they buy into it, says Westman.

The biggest challenge now, she adds, is getting other broadcasters on board. Even though preschoolers will watch the same episode over and over on multiple platforms, “it always comes down to a fight over rights. [But] you don’t need to be as precious with them as perhaps you need to be in the grown-up drama space.”

While books are familiar ground for the Nelvana team, it’s hoping to break through in a category that has traditionally been a struggle: feature films. When Corus bought Nelvana in 2001, a goal was to make it big in theaters, says Loubert. Timing and budgets never seemed to align, but 20 years later, Nelvana is chasing its cinematic dream again.

However, roadblocks have continued to hinder progress. When Westman turned her attention to features, there was a booming box office for family fare. Now, thanks to the pandemic, that’s all but disappeared, and Nelvana has had to switch gears and look to pay-VOD and at-home event-based releases on streaming platforms instead. Today, the company is focused on higher-quality, higher-budget features with longer running times because that’s what a lot of buyers want right now, says Westman.

Nelvana's office space at Corus headquarters has several slides, but sadly no bathtubs anymore

Nelvana’s office space at Corus headquarters has several slides, but sadly no bathtubs anymore.

While Nelvana hopes to create a film in- house soon, Westman is aware that features are a different beast than TV. That’s why the prodco recently partnered with Duncan Studio (founded by former Nelvana alum Ken Duncan) for a slate of original films. Striking the right balance between Nelvana-led and partnered projects is a bit of a tightrope walk. The ideal strategy is to create a preschool IP, get it greenlit without any co-producers, and then self-distribute and manage merchandising in-house. It would be the cherry on top if the IP was also based on a hit book published by Kids Can Press.

“When you own multiple touchpoints on a brand, you’re able to improve the economics of your investment and TV series,” says Bohm.

But going it alone isn’t a straightforward strategy, which brings Nelvana to the final piece of its hit-making puzzle: partnerships.

Ideally, partnerships would make up one-third of Nelvana’s slate (balanced against  one-third original in-house productions and one-third season renewals).

But recently, the shows Nelvana has created with partner prodcos have been very successful, throwing its production slate balance out of whack.

Nelvana’s last hits were Bakugan (released in 2007) and Beyblade (which premiered in 2001, but has had many iterations, most recently in 2014). The two anime series were co-produced with toyco Spin Master and Japanese studio d-rights, respectively. And despite plenty of toy sales and wide global audiences for both series, because Nelvana didn’t own the IPs, its ROI was limited.

Since anime has been a winning formula in the past, Nelvana is keen to keep going in the genre The company is actively talking to a number of Japanese studios to try and replicate the success of its Discovery Kids LatAm partnership, which led to the launch of redknot. The JV has since greenlit Agent Binky: Pets of the Universe, The Dog & Pony Show and Super Wish.

With both partners backed by broadcasters, redknot has access to a much bigger warchest for content. And as a result, Nelvana has been able to get a number of shows to air through the partnership.

But it’s not just the bigger budget that makes this JV work—Westman says the  talent base, expertise and knowledge-sharing with Discovery Kids LatAm has been a real boon.

redknot forces Nelvana to think even more globally on projects, pushing the team to consider how kids in different corners of the world live their lives, which Westman says is always beneficial.

Nelvana’s partnerships with Mattel for two new seasons of Netflix’s Thomas & Friends, and with Sesame Workshop on HBO Max’s Esme & Roy have been successful, and Westman hopes they both continue in the future. She’s now casting her eye further afield and actively looking for a European broadcaster to partner with.

“The rules around European content are becoming as stringent as the rules around Canadian content,” she says, and teaming up with a broadcaster would be a way into that continent.

This is where much of the current Nelvana strategy diverges from its history—partnerships with producers from every corner of  the world weren’t something that Smith, Loubert and Hirsh imagined when they first got started. At the time, all they really wanted was a meeting with a buyer in Canada—and maybe one day a meeting with a big US buyer.

Let that be an inspiration to all who dare to start a company with only $10 in their pockets and a bathtub in the middle of the office.

About The Author
Alexandra Whyte is Kidscreen's News & Social Media Editor. Contact her at awhyte@brunico.com

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