Cinema Canada (Mar 1982)

wall and 15 people on staff,” says Hood. . e rett turn ; Schuylersays the market simply not pay more. “We don't have an with carpeting halfway up the is “We know work comes and goes. We've _ spent summers waiting for money to ee fallinto place.” Still, when they applied _ for their yearly bank loan in December, _ with a distribution guarantee anda CBC _ sale interest in place, they felt they were _ dealing from a position of strength. Yet the banks, overextended in feature film financing, wanted the company put up as security. Hood and Schuyler walked out. “It was scary,” says Schuyler. “We _had bills to pay, and people back at the office waiting for pay cheques, but we had to say no.” Hood couldn’t under stand the bank's attitude. “For us to go under, it would mean Learning Corp. would have to go under, which would mean Mobil Oil would have to fold.” The bank relented and gave them their loan without the company as security, but Hood and Schuyler both admit they were lucky to have been in a strong enough position to wait the bank out. At the peak of the CCA film investment boom two years ago, many small independents were putting together feature film deals to try to cash in on the investor demand. Hood and Schuyler admit they consciously avoided that. Feeling they weren't ready to make a feature film, they saw it not as a good business proposition, but a bad creative move. They have no regrets. “We're aware that we've built something up here, and we don’t want to make that bad decision that will ruin it. We're at the point now where we're in control we can grow and still do the things we want to do,” says Schuyler. They plan to start a children’s feature in the middle of 1983. Many of the smaller independents would like to see the 100 percent CCA retained after 1982 for non-theatrical productions. David Springbett credits the CCA with allowing Asterisk to break _ into the American schoolboard market and become a major educational pro_ ducer in the United States. “The small _ companies are really the ones who use the CCA in its original intention — to give | Canadian producers a stepping stone to the international market, to help them reach a point where they don’t need it anymore,” he says. Ironically, the small independents have had greater success than the feature film industry in cracking the features’ most-sought-after market, the United States. “T tell people if you're going to produce independent films, have the U.S. market in mind,” says Jerry McNabb of Magic Lantern-Films, a Canadian non-theatric al distributor. He points out the Ameri can market for non-theatrical productions is $75 million annually, compared to $9 million in Canada. But close to $8 million of the Canadian market goes to buying American-product and government subsidized material by the NFB or the OECA, leaving barely $1 million for the Canadian independents. “Obviously, we can make a lot more money off @ Two by two: Gerald Durrell gathers tamarins for Ark on the Move by Nielsen Ferns them (the Americans) than they can make off us,’ says McNabb, noting that since the Reagan administration has cut back on educational funding, there is less American production being done, subsequently opening up the markets for Canadian independent productions. At home, a Canadian independent’s product must be among the very best in its genre to succeed in the market. Where a Degrassi St. episode would cost $500 to purchase, says McNabb, an equivalent half-hour NFB children’s drama would cost $250, and an equivalent OECA production $30-40. To get buyers to pay more, the independent must offer them high quality. In Mc Nabb’s opinion, government film. groups generally produce average material, rarely exceptional product, “which means independents who pro producer's track record. Let's duce really superior stuff fit the buyer’s need. But for people who want to produce learning materials on film, forget it, there is no discretionary money any more.” McNabb says some independents expect to make more money ona film than is possible. He says the return to the producer is as low as 18 percent and as ‘high as 25 percent in the U.S., while the Canadian market ranges from 20 to 40 percent. “A Canadian producer can only do a $80-100,000 film if there is a sale to television as well,” says McNabb, “only the top 2-3 percent can get a return in the educational market alone on that kind of budget.” He would like to see the 100 percent CCA retained for nontheatrical productions, and also feels the independents themselves, not just the NFB-based independents, should @ William Macadam, head of Norfolk have more effect on government policy. “I'd like to see the government talk to private independent producers and see how it can help in exporting film.” ° With the 100 percent CCA scheduled for change after December 31, 1982, companies like Atlantis and Playing With Time are preparing for next year this year by learning the basics of financing by pre-sale now. According to Michael MacMillan, Atlantis will try to pre-sell two half hour dramas in 1982, “so that next year, when we have to, we'll know how to do it.” Playing With Time's goal is to cover 50% of their 1982 production costs through pre-sale generated revenue. Says Linda Schuyler: ‘That's the good thing about this year of grace. We can try to do without it (the CCA), and if we can’t, we know it’s © still there, and we can ease ourselves into ’83.” But Schuyler adds “I don’t know what some of the other small producers are doing (about the future). They just can’t walk into the CBC and expect a presale.” The 100 percent CCA gave most of the successful small independents their start, and allowed them to reach a point where they could support themselves not through government regulations but by the industry itself. If after the elimination of the 100 percent CCA, another investment-incentive mechanism is not put in its place to stimulate production in areas outside of feature film, it will be very hard for existing small independents to grow and new ones to start up, since most financial packaging would be dependent on a hope during this year and re-assessment for the Canadian film industry, the small independent production houses are not forgotten. It seems unfair that those who stand to be hurt most by the reduction of the 100 percent capital cost allowance are those who have abused it least. Cinema Canada-— March 1982/23