Canada Digital Media Final 2009 03 30


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Canada Digital Media Final 2009 03 30

  1. 1. Overview of Digital Media in Canada Aslin Unlusoy Trade Commissioner Canadian Embassy in Dublin April 30, 2009
  2. 2. Agenda Who we are Understanding Canada Canadian ICT Canadian Digital Media Video Gaming Computer Animation & Digital Effects Education and Training Products Business Applications & Web Marketing Enabling Technologies Wrap up
  3. 3. Canada’s most comprehensive network of intl trade professionals 270 diplomatic and consular offices in 180 countries Sector specific, in line with local strengths Access to an extensive network We are your first points of contact
  4. 4. Oh Canada! Second largest country in the world; polite neighbour in the North 17 of 20 largest cities are within a 90 min drive to the US border. 10 provinces, 3 territories; federal and provincial rules / programs Strong ties and shared like-mindedness with the Irish (incl 13% of our population!)
  5. 5. Oh Canada! Great access to the US through NAFTA; + 443 million consumers! Two Canadian banks rank among only seven banks worldwide that still carry a Moody’s triple-A credit rating. Canada rated as the #1 place to do business in the G7 for the next 5 years (Economic Intelligence Unit ) Canada has the lowest business tax rates and payroll taxes among the G7.
  6. 6. Positive Business Climate Canada understands the importance of its business community and has created an environment to encourage its success. Canada’ business climate ranked first in the G-7; fourth out of 82 countries Economist Intelligence Unit’s global business rankings for the forecast period (2009-2013) Canada ranks well for its infrastructure, market opportunities, taxes, and foreign trade and exchange controls. Business Environment of Top Ten Countries, Forecast 2009-2013 1st 2nd 3rd 4th 5th Rank 6th 7th 8th 9th 10th s k d d a da en e ng S. nd ar lan ali lan or U. na ed Ko nm ap st r rla Fin er Ca Sw ng Au ng the De itz Si Ho Sw Ne
  7. 7. Best Educated Workforce The overall skill level of Canada’s workforce ranks high among competing countries. Canada has the highest percentage of individuals achieving at least college or university education, among OECD member countries. 54.0 55 53.0 Higher Education Achievement 51.4 51.0 50.0 50 47.8 45 % 41.0 41.0 41.0 40.0 40.0 39.8 39.0 39.0 40 35 30 ng k uth e a De y ce um da Si an an d S. l Ho ain ae a ar re So por lan U. rw Ko an na iw p nm Sp Isr lgi Ko Ja Ire a Ta No Fr Ca Be ng ng Source: IMD, World Competitiveness Yearbook 2008
  8. 8. Canadian ICT Canada ranks 9th in the world for ICT competitiveness 32k companies, 600k employees; 43% w a university degree 79% companies are in software and computer services Average annual growth of 5% since 2002 92 universities produce 50k math, comp science & engineering grads ICT is Canada’s largest private investor in R&D: $5.7 billion annually Canada is 3rd largest for digital entertainment (Vancouver, Montreal) The Greater Toronto Area IT cluster is the 3rd largest in N America after San Francisco and Boston; several IT clusters across Canada. Three main ICT sub-sectors are: Wireless, Software, Digital Media
  9. 9. Canadian Wireless & Software Wireless: Cellular Equipment, Mobile Devices & Customer Premises Equipment, WIMAX and Software Defined Radio Solutions In the top 10% for global broadband penetration rates Canada ranks #2 among the G7 for patent and copyright protection RIM, Nortel, Redknee, Belair, Sierra, Wavesat and Intrinsyc Software: Enterprise Application Software, Web solutions, E-security and Green IT One of the highest levels of broadband penetration and high speed Very low overall communications costs Mature, technologically advanced telecomms infrastructure Corel, Constellation, Enghouse, Open Text, Platform Computing
  10. 10. Canadian Digital Media Canada is reputed for its expertise in digital media and has a remarkably successful track record. Strengths of Canada’s Digital Media firms include: Animation and special effects Video and computer games Education and training products Business applications and web marketing Enabling Technologies in the Transmission of Digital Content
  11. 11. Digital Media – Quick Facts Over 3,200 companies employing more than 52,000 people Growth rate is 5.9% CAGR compared to the US at 5.6% 60 post secondary institutions provide digital media programs Major international companies have chosen Canada for their operations: Electronic Arts, Bioware, Disney, Ubisoft, THQ, Microsoft and Vivendi Over 60% firms export; firms with revenues over $10M export at 98% 71% firms are engaged primarily in content creation; remainder, enablers 11 research labs in 3D imaging Very competitive tax incentives at the provincial level
  12. 12. Canadian Programs Summary There are many Programs and Policies (Federal, Provincial, and Technical) that provide support and funding for New Media: Ontario and Manitoba both emphasize interactivity in the products it supports. Although funding levels are not as high in Manitoba, the province does offer marketing support. Quebec has succeeded and continues to attract large gaming content developers (eg. Ubisoft). British Columbia overall casts a wide net and supports investment in new media ventures, versus the development of a particular product. Technical funds provide significant support for those that qualify (specific R&D definition); focus on technically challenging business segments like gaming and mobile content. Note: All programs are listed and detailed in the Appendix.
  13. 13. Video Gaming Industry Canada is ranked third in the world in video games, after the US and Japan. 20% of the top selling games in N America developed in Canadian studios. Sales hit record levels in 2008, +$2 billion; a 23% increase over 2007. Canadian gaming companies are positioned across the value chain: hardware, infrastructure and services, enablers and tools, developers and publishers, and game-ware innovation. The video-gaming software sector alone comprises of 247 companies w 14,000 employees. 10% of Canada’s software jobs are in this industry. Thanks to generous tax incentives, Canada has the world’s two largest video-game development centres: Ubisoft (QC) and Electronic Arts (BC).
  14. 14. Video Gaming Industry The Quebec games subsidy means studios can claim back up to 37.5% of their creative staff’s salaries; also a possible 40% tax credit for R&D. Canadian advantage: cheaper to run a company, lower cost of living The studios pursue close ties with education to ensure strong talent. Cryptologic, leader in Internet casino and branded gaming software Demonware, gamers can play ea other over the internet, Dublin & Vcr Groove Media launched SkillGround in Dublin; free games download Bioware, computer and console video games GameLoft, huge catalogue of games for download to mobile phones Next Level Games, Mario Strikers Charges for the Wii
  15. 15. Video Gaming Clusters Canada’s video gaming industry has an emerging cluster that is targeting the non-console markets and showing strengths in ‘middle-market games’: Mobile Content Serious Gaming. Canada has all the assets to become the 3rd ranked global producer targeting the US and UK markets. Business applications and web marketing. Casual Games: There are 24+ companies employing 400 people. Revenue models: trial-to-purchase, subscriptions, advertising supported, in-game advertising, advergames, micro-transactions, skill-based games through tournaments, retail sales, or single-purchase via downloading. Canadian mobile content developers and publishers are also taking advantage of wireless handsets to provide entertainment on the go: egs. IUBO Mobile Entertainment, Blister Entertainment, Magmic Games
  16. 16. Computer Animation and Digital Effects For years, almost every film nominated for an Academy Award in special effects was produced with Canadian-developed technology. Films: Batman Returns, Shrek the Third, King Kong, The Lord of the Rings trilogy, the Harry Potter series, and the Chronicles of Narnia. Side Effects Software, two-time Oscar winner and Toon Boom Animation, Emmy Engineering Award winner for its animation software. Major studios such as Rainmaker and Mr.X are clustered in Vancouver, Toronto, and Montreal; also FatKat (NB) and Mercury Filmworks (ON) Canada is also home to development facilities for the likes of Softimage (Avid), Side Effects Software and Autodesk.
  17. 17. Computer Animation and Digital Effects This industry is comprised of companies that produce content and/or provide other services for film and tv markets in Canada & internationally. Their primary customer base includes film studios, distributors, content producers and television broadcasters. The primary source of service work remains in the United States, followed by Europe and Canada; new Canadian players are emerging Canadian animation companies are focussing on international co-ventures and co-productions, particularly in television, feature films, advertising, mobile and gaming.
  18. 18. Co-production Agreements Contribute to the further expansion of the film and video production industries for both countries as well as to the development of their cultural and economic exchanges. In 2008, Section 481 set up to improve Ireland’s competitive position as a location for International film and television production. Co-production agreement on “Film and Video Relations Between the Government of Canada and the Government of Ireland”: Funding benefits for producers in Canada:
  19. 19. Education and Training Products Canadian multimedia is setting new standards in courseware design, edutainment, consulting and flight simulation. For business, Canada provides instructional solutions for the transportation, communications and manufacturing sectors. CAE is a world-leading manufacturer of full-flight simulators for all major aircraft types. Kutoka Interactive develops award-winning interactive educational materials for children; products in 40 countries, 123 languages. The NECTAR Foundation develops state-of-the-art curriculum-based multimedia software for math, languages and science education. VitesseLearning is the largest independent business in the North American customized learning marketplace.
  20. 20. Canadian Education Canada’s professional schools and educational institutions offer more than 100 new media programs. The Art Institute of Vancouver, with its centre for Digital Imaging and Sound, is a multi-million dollar facility that trains more than 1300 students a year. Its graduates are employed worldwide. The Great Northern Way Campus in BC is embarking on the development of a professional master’s program in Digital Media. Sheridan College in ON is the third-largest classical and computer animation school in the world. Hollywood studios like Industrial Light + Magic, Pixar Animation and Disney all regularly send talent scouts (and endowments) to Sheridan. The National Animation and Design Centre in Montreal enjoys an enviable international reputation in digital animation and effects training.
  21. 21. Business Applications & Web Marketing Canadian companies have shown how to use multimedia to design and deliver superior interactive experiences for business applications and web marketing. The Autodesk (formerly Alias) AliasStudio line manages workflow from concept sketch through to engineering. It is used by BMW, Designworks USA, Nokia and General Motors. Blast Radius designs Internet customer experiences for leading global brands such as Nike, Nintendo, BMW, Heineken and Sony. Eccentricarts specializes in web strategy, design and development. Its state-of-the-art webware includes FlashMX and ColdfusionMX.
  22. 22. Enabling Technologies Enabler firms are defined in the sector as suppliers of software development and design, video and audio compression technologies, internet applications such as graphic rendering programs, audio-visual content management systems, and interactive broadcasting. Canada has pioneered achievements in telecommunications and R&D in audio-visual transmission technologies. Corporate R&D investments: Multimedia Broadcasting, Interactive TV, Digital Radio, Satellite Transmission, Internet TV, IPTV and 3D TV. The Communications Research Centre Canada is collaborating with international partners (application developers, users, device integrators and chip set makers) in new projects such as interactivity with 3D TV and Immersive TV over wireless networks.
  23. 23. Enabling Technologies A significant number of Canadian companies supply leading-edge technologies in the vastly growing digital and mobile broadcast markets. Miranda Technologies (300+ employees) and one of its spinoffs, Agolith, both based in Montreal are R&D nodes of video processing solutions. Bluestreak Technologies’ awarded-winning MachBlue ™ powers sophisticated applications and user interfaces on mobile phones and televisions set-top boxes. International Datacasting is recognized for their transmission technologies of 3D video/films to exhibitions/cinemas on high-speed broadband connectivity via satellite and have their hardware and software installed in over 100 countries. Common business models are selling products and services at trade event through certified distributors, or directly to decision-makers.
  24. 24. Upcoming Events Game Developers Conference, May 12-13 The GDC covers industry-leading methodologies in game design, production, programming, visual arts and writing for big-budget multiplatform games: Vancouver International Partnering Forum, May 12-13 VIPF offers businesses and industry hopefuls the opportunity to meet industry veterans, decision-makers and cutting edge creators through networking sessions & hand selected B2B meetings: Ottawa International Animation Festival, October 14-18 This festival is the largest of its kind in North America, attracting film buffs, art lovers, filmmakers, and cartoon fans from around the world to the nation's capital. The 6th annual Television Animation Conference will take place the first two days: Montreal International Game Summit, November 16-17 This summit smashed several records last year with more than 100 speakers and 1,500 participants:
  25. 25. What We Can Do For You The Canadian Embassy in Ireland has direct access to investment and partnership contacts at national, provincial and municipal levels within Canada, and is well positioned to assist in attracting and expanding your investment, and/or help locate partnership opportunities. Doing Business with Canada (Info on selling to Canada, buying Canadian, business travel, etc) Invest in Canada (results of KPMG studies, CEO’s Guide to International Business Costs, breakdown of key industry sectors, etc)
  26. 26. Think Canada! Ms. Aslin Unlusoy Trade Commissioner, ICT Digital Media, Investment, Wind Energy Tel: 01 234 4061 E-mail: Mr. John Sullivan Trade Commissioner, ICT Wireless & Software, Life Sciences, Agri-food Tel: 01 234 4019 E-mail:
  27. 27. APP: Canadian Programs - Federal Federal Departments and Agencies: Description of Programs or Policy by Organization Funding/Support Available Canadian Radio-Television and Telecommunications Commission (CRTC) No direct funding support. However, if an ISP levy is Currently re-evaluating stance: introduced there would be funding Four possible outcomes, some not mutually exclusive: (i) continue to rely on market forces, (ii) through an equivalent of the CTF introduce/increase subsidies, (iii) add “opt-in” and “incentive-based” reg. mechanisms, (iv) introduce more conventional reg. mechanisms “New media broadcasting” and “mobile broadcasting” are currently exempt from Broadcasting Act Main Interests in new media: Net neutrality: Interested in ensuring proper traffic management no undue discriminatory conduct by ISPs (e.g. limiting access to certain websites, throttling) Content: CTRC has divided content in 3: UGC, inexpensive commercial content (news, information) and high-quality, expensive programming Asking if new media will/has fundamentally changed „casting business model Access to infrastructure: also an issue (affordability and availability of services) Canadian Television Fund (CTF) CRTC recently proposed changes to CTF that include the establishment of a new media stream of production funding This fund potential targets among „new media‟ segments were not discussed Stipulates that broadcaster must pay for ancillary (e.g. web/mobile) rights Rates of these rights are to be determined in terms of trade negotiations Production, NM component: Bell New Media Fund (IPF) 75% of costs up to $250k To be eligible projects must (+ possible $100k bonus to match include both NM and TV elements, broadcaster contribution) obtain a minimum of 8 CAVCO points, Development, NM component: have a broadcast commitment for the TV component 75% up to $50k (+ training element) not be news, reporting, or sports Total Funding (2007): $8.3 mil
  28. 28. APP: Canadian Programs - Federal Federal Departments and Agencies: Description of Programs or Policy by Organization Funding/Support Available CFC (TELUS Innovation Fund) Part of Canadian Film Centre Up to $100k per project Key criteria are innovation and narrative Innovation Fund invests in new forms of high-quality, original Canadian content that explore new ways of approaching entertainment and storytelling. This fund supports projects in the form of a recoupable contribution towards the production of innovative film, television, new media, or Total Funding (annually): cross-platform content projects. up to $300k Requires that 50% of funding be in place Fonds Quebecor $500k per project up to 35% of Funds the production of an interactive multimedia product that will use ICT including production and NM combined necessarily high speed Internet or interactive television; projects must be associated to TV budget programs that have been „picked-up‟ by a broadcaster. Quebecor Fund “favours projects where use is made of advanced technologies permitting Total Funding (2007): $3.5 mil interactivity at the televisual production level as well as at the level of multimedia intended for high speed Internet.” Canadian Broadcasting Corporation (CBC) $10.3 mil spent in 2006-2007 on “cross-media programming” 4 Internet services (,, radio3, bandeapart and RCIviva) Most popular broadcaster-related site in Canada (2008), but not in top 25 of video content Revenues more than double target in 2006/07 TV and Radio websites grew 19% and 13% respectively from 2005/06 to 2006/07 Signed deal with Quattro Wireless to provide real-time, ad-supported news, sports and entertainment content through mobile phones Negotiates with content providers for right in all formats Widely applauded for multi-platform approach (e.g. trad. radio shows w/ websites and weekly podcasts) Have commissioned 1 web-only video content recently (Bloody Immigrants) st
  29. 29. APP: Canadian Programs - Federal Federal Departments and Agencies: Description of Programs or Policy by Organization Funding/Support Available Canada New Media Fund (administered by Telefilm on behalf of the Department of Product Assistance accounts for Canadian Heritage 80% of all funding Total annual budget is about $14.5M (2007) several layers of involvement (i.e. approvals) in production process Requires that copyright to be retained by CDN company 3 components of CNMF administered by Telefilm: • Product Assistance – conditionally repayable advances for interactive digital cultural content products in both official languages that are intended for the general public • Sectoral Assistance – conditionally repayable (and non-repayable) advances to initiatives that contribute to the industrial and professional development of the interactive digital content industry in Canada. • Sectoral Development – Telefilm driven initiatives to address gaps in industrial support through events and initiatives that contribute to the industry’s participation at industry events in Canada and abroad. Total Funding (2007): $14.5 mil Canadian Culture Online (CCO) Gateway Fund – up to $50k for any single project, with 25% of the The funder for the CNMF (administered by Telefilm Canada) project budget contributed by the Recently wound up 3 programs applicant Purpose is to develop policies and programs related to the Internet and digital technology to bring our country's cultural content to Canadians. Partnerships Fund – up to $500k or 75% of project budget (the On-going funds: lesser of the two) Gateway Fund – aims to increase access to diverse Canadian cultural content online, specifically aboriginal and “ethnocultural” content Partnerships Fund – Aims to provide meaningful and seamless access to content that helps deepen an understanding of Canada; primarily aimed at public, educational and NFP sectors Recently Discontinued Funds: Canadian Memory Fund – goal was to encourage federal agencies to digitize their collections and make them available online to Canadians aimed at supporting innovative applied research at the intersection of technology and culture New Media R&D Initiative – a pilot project that was not continued to build a foundation for the interactive media sector; funding totalled $27.3 million.
  30. 30. APP: Canadian Programs - Provincial Provincial Ministries and Agencies: Description of Programs or Policy by Province Funding or Support Available Ontario Fund: 50% of budget up to $100k Recently identified “digital media” as a key growth sector Recently expanded interactive digital media tax credit by 5% to 25% of eligible labour Tax Credit: 25% of labour expenditures expenditures Geared to helping Ontario-based businesses with particular products Interactive digital media fund (an OMDC Fund) supports the creation of original IP, assist in capitalization, and contribute to financing. Applies to consumer, commercial projects Total funding (2007): $870k Also has tax credit (recently extended through 2012) Quebec Strategic investment on a case- by-case basis in addition to tax Commits significant support to gaming industry through a series of one-off tax incentive credit (e.g. for Ubisoft, Eidos) SODEC does not include „new‟ or „digital‟ media as a supported area The Quebec government's refundable tax credit for the production of multimedia titles helps companies lower their production costs. Depending on the category of titles produced, assistance can represent up to 37.5% of labour costs. British Columbia 30% non-refundable tax credit for venture capital investment in NM New Media Venture Capital Program – to support manufacturing/export or development of by corporations (no max) interactive new media products 30 % refundable (max $60k) per tax credit per year for individuals Manitoba MIDMF has 3 components: Falls under the jurisdiction of Ministry of Science, Technology, Energy and Mines (STEM). 1) Market Research & Manitoba’s rendition of “interactive” media mirrors that of Ontario Prototyping: Manitoba Interactive Digital Media Fund (MIDMF) goals: up to 50% of approved eligible • to provide recoupable financial support to Manitoba companies for the development, costs, to a max of $20k production, and marketing/distribution of high-quality, original, Interactive Digital Media 2) Product Development: up to products; 50% of approved eligible costs, to a • to assist in the growth and development of a Manitoba Interactive Digital Media production max of $50k and distribution industry that is competitive in international markets; • to raise the profile and presence of Interactive Digital Media creators in both domestic and 3) Marketing Assistance: up to international markets (including providing travel assistance) while providing opportunities 50% of approved eligible costs, to a for professional development max of $25k
  31. 31. APP: Canadian Programs - Technical Technical Funds: Description of Programs or Policy by Organization Funding or Support Available Scientific Research and Experimental Development (SR&ED) 35% tax credit up to $2 mil on labour, overhead, equipment; Maximum expenditure limit (and other limits) increase to tax years ending after February 2008. 20% above $2 mil A federal tax incentive program to encourage Canadian businesses of all sizes and in all sectors to conduct research and development (R&D) in Canada that will lead to new, improved, or technologically advanced products or processes Supports R&D for improved technologically advanced products or processes (e.g. gaming devices and game-related software) A firm-level investment tax credit that is phased out as a company group Industrial Research Assistance Program (IRAP) Canadian-controlled private corporation (CCPC) can earn an Provides advice to technology innovators investment tax credit (ITC) of 35% Provides non-repayable contributions to Canadian SMEs interested in growing by using up to the first $2 mil of qualified technology to commercialize services, products and processes in Canadian and international expenditures for SR&ED carried out markets in Canada, and 20% on any excess Also administers a network of innovators and financiers amount Recently committed to increasing the funding available per client Stimulates wealth creation through technological innovation by providing technology advice, assistance and services to SMEs to help them build their innovation capacity.
  32. 32. Think Canada! Ms. Aslin Unlusoy Trade Commissioner, ICT Digital Media, Investment, Wind Energy Tel: 01 234 4061 E-mail: Mr. John Sullivan Trade Commissioner, ICT Wireless & Software, Life Sciences, Agri-food Tel: 01 234 4019 E-mail: