Canadian film: investment and return

Canada Feature Film Fund - Financial Analysis (2010-2011) - Production - New contracts only *

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	Number of projects	Budgets * ($M)	CFFF %	Broad- casters %	Canadian Private Sector %	Distributors and Exporters %	Other Govern- ment Sources %	Foreign Participants %
French	19	76.5	31	2	6	8	48	6
English	29	135.8	31	2	16	9	25	16
Total	48	212.3	31	2	13	9	33	13
*Does not include the foreign share ($39.9 million) of official coproduction budgets in which Canada is a minority partner.

Source: Telefilm's database, figures are rounded.

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The leveraging effect of our investments

The CFFF investments leveraged production budgets of $212.3M. These investments have contributed to the economic prosperity and development of a vital industry across Canada. The feature film industry is labour-intensive because of its prototype nature; each film is different from the next. Therefore, a high proportion of all spending is paid directly in salaries. It is estimated that the CFFF investments have contributed to the creation or the maintenance of the equivalent of approximately 5,000 full-time jobs, of which 2,000 are directly linked to production activities.

The leveraging effect of our investments – including coproduction investments, sales by linguistic market and sales by platform – are all-important indicators for an industry that has traditionally measured success at the box office alone. As a priority over the next year, Telefilm will work with stakeholders and partners to ensure that its measures of success reflect today’s multiplatform reality. Telefilm must also find better ways to capture usage data from all measurable platforms, and include newer online platforms that remain unmeasured such as iTunes and Netflix.

In 2010-2011, Telefilm was able to support the production of 48 projects across Canada – five more than 2009-2010. Our financial commitment dropped from $66.8M to $65.2M year-over-year. In other words, we were able to support five more projects with $1.6M less investments.

English-language Feature Films	French-language Feature Films
Antiviral Blackbird Breakaway Charlie Zone Cosmopolis A Dangerous Method Donovan's Echo Down the Road Again Edwin Boyd Entitled Foreverland French Immersion Goon The Guys Who Move Furniture Hobo with a Shotgun Keyhole Midnight's Children The Moth Diaries The Odds Passionflower Mulroney: The Opera The Replicas Roller Town Rose by Name The Samaritan Servitude This Movie is Broken Trigger Winnie	L’appât Monsieur Lazhar Le bonheur des autres Une bouteille dans la mer de Gaz Café de Flore Décharge En terrains connus French Kiss Laurence Anyways Marécages Memories Corner La peur de l'eau Pour l'amour de Dieu Le sens de l'humour Starbuck Sur le rythme Le vendeur La vérité Une vie meilleure

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Our investments in 2010-2011

Financial analysis of film production (both linguistic markets)

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Source: Telefilm's database, figures are rounded.

Telefilm's early investment in Canadian film projects enhances a producer's ability to attract additional financing. This past year, the CFFF represented 31% of all budgets – a three-year low.

The majority of alternative investment comes from the Canadian private sector (up from 8% to 13%) and from foreign sources (up from 5% to 13%). Distributor/exporter financing was up slightly year over year. Meanwhile, financing from television broadcasters has decreased from 8% to 2% since last fiscal.

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Public vs private funding

Public vs private funding (in % of budget)

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Source: Telefilm's database - CFFF 2006-2011

Public financing has made up about two-thirds of production budgets over the past five years. Public financing includes the CFFF plus provincial film agencies and other government sources. Private investment lagged in 2009 and 2010 due to the global financial crisis, but has now climbed back to 2008 levels. Coproductions also benefited from a better investment climate.

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Leveraging through coproduction investments

Source: Telefilm's database, 2006-2011

Since 2006, Telefilm has committed over $70M to Canadian producers involved in international minority and majority coproductions. During the past five years, almost $287M of foreign financing from 14 different countries has been invested in coproductions with Telefilm participation, representing a total of 56% of all financing.

Most coproductions have higher budgets – on average, $11.5M vs. $5.5M for all-Canadian productions. Pooling resources with other nations can generate more financing, and this often gives Canadian producers the opportunity to participate in higher-profile projects.

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Life cycle of sales

CFFF sales per year after financing

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Source: Telefilm's database

Statistical analysis lets us track the sales life cycle of films supported by the CFFF. The bulk of sales takes place in years two, three and four after CFFF financing is granted by Telefilm. In fact, this three-year span accounts for 89% of total sales.

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Sales by platforms

Domestic gross sales by platform

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Source: Telefilm's database, figures are rounded.

Sales to television networks and cable services such as pay TV and pay-per-view still combine to represent almost half of domestic sales for English-language films and almost a third for French-language films. Video-on-demand is still in its infancy with a small share of sales.

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Canada's presence at international markets

Canada's presence at international markets is important to the Canadian audiovisual industry. Canada, with its cosmopolitan population, is well-positioned to appeal to audiences all over the world.

Most foreign sales of Canadian audiovisual content take place at four or five major international events – sometimes in conjunction with festivals. These markets include MIPTV, MIPCOM, the Marché du film at Cannes, and the Berlinale European Film Market.

Telefilm maintains a presence at each event. Surveys show that over 84% of Canadian companies in attendance at each event used the onsite facilities provided by the Canada Pavilion/Sales Desk in 2010. After a recessionary drop in use during 2009, Canadian companies are returning to the Canada Pavilion in higher numbers once again – a welcome sign of increased international business.

Canadian companies rated the Canada Pavilion/Sales Desk 8.3 out of 10 for its utility in doing business, and 9 out of 10 for the quality of staff assistance they received.

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International sales activities

Sales at MIPCOM, MIPTV, Cannes and Berlin are measured through a survey of participating Canadian companies. The figures are conservative estimates given that only 40 out of 180 respondents provide complete sales information.

Canadian companies conducted over 6,200 meetings across the five markets measured – an average of 38 meetings per company. About half of these meetings involved new business partners.

According to the surveys:

• 79% of Canadian companies reported closing sales in 2010.
• Approximately 593 deals were made.
• About 516 titles were sold.
• Each Canadian company completed an average of six sales deals and sold five titles.

Sale or presale: what's the difference?

Marketing activity at international events is a combination of sales and presales. A sales transaction involves projects that have already been produced, or the intellectual property rights for remakes. A presale occurs when production companies find financial partners to work on their upcoming projects.

• 45% of clients reported closing presale deals in 2010
• About 116 presale deals were done
• Canadian companies, on average, completed three presale deals at each event

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Value of international sales⁴

In 2010, Canadian companies participating at international markets closed:

• over $8M of sales, and
• over $7M in presales.

This $15M total was off only slightly from $16M in 2009. However, the outlook is promising with $32M currently in sales and $22M in presales in progress.

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Doing business with Canada

The scope of sales for 2010 is also impressive. Canadian companies:

• Conducted business with 20 different countries and territories.
• Principle partners in 2010 included the United Kingdom (36% of activity); Germany (22%); the United States (20%); Australia (9%); and France (7%).
• Arranged coproductions and co-ventures with 25 different countries and territories worth $125M, or about $5.4M per company.

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Sharpening our approach to international markets

Tracking international sales and activities over the past five years has given Telefilm valuable insights for developing our international strategy. We have already begun to adjust our approach and presence to better support the Canadian audiovisiual industry. Looking ahead, we plan to intensify our presence at the Toronto International Film Festival. In partnership with provincial agencies, the CMF and producers' associations, we are developing specific action plans for the U.S. and Asia.

Our new four-year corporate plan places high priority on stimulating audience demand for Canadian productions, not only in Canada but also around the world. International business and coproductions are an important source of alternative financing for our industry.

Return to top ⁴ All sales at international markets are tabulated on a calendar basis, from January 1 to December 31.