Vancouver Animation Studios See ‘Exponential Growth’

Increased competition from streaming services like Netflix is creating more demand for content

Courtesy of BusinessInVancouver

The Vancouver animation industry has never been, well, so animated as it is now, according to Delna Bhesania.

The Bardel Entertainment CEO says her three studios in B.C. still need to bring in talent from outside Canada to keep up with demand for projects like Teenage Mutant Ninja Turtles, Rick and Mortyand Veggie Tales.

“I don’t know if it’s going to keep seeing the exponential growth we’ve seen but the industry has grown to meet the demand,” said Bhesania, who co-founded Bardel with husband Barry Ward in 1987.

“I don’t think it’s going to diminish by any means.”

Traditional broadcasters are dealing with more competition from American streaming services like Netflix.

This is creating more demand for content, according to Bhesania, who said growth at Bardel has spiked dramatically over the past four years.

Earlier this month, the province announced it was reducing tax credits for foreign productions. 

Beginning in October, new film and TV productions are eligible for 28% tax credits, down from 33%.

Meanwhile, tax credits for visual effects and animation studios will drop to 16% from 17.5%.

“We’re trying to still wrap our heads around that and assess it,” she said. “But the need for content – I don’t think that’s going to slow down.”

The B.C. government cited the plunging value of the Canadian dollar as one of the reasons the current tax credits were “unsustainable” and were forecast to cost the province nearly $500 million in 2016.

It was also one of the motivating factors for Sony Pictures Imageworks to move its headquarters from California to B.C. last year.

The company initially had a satellite office in Yaletown with 80 employees in the 2000s, but today it employs 700 people at its new downtown facility.

Meanwhile, DHX Media (TSX:DHX.B) announced earlier this year it would centralize its two Vancouver animation studios into a single hub. 

The new 75,000-square-foot studio is being built in the city’s Mount Pleasant neighbourhood.

The company is hiring 100 staff in the coming months to serve with its 700 employees already in Vancouver.

“We’re really putting roots down here because we feel this is where the talent is,” DHX Studios chief content officer Ace Fipke told Business in Vancouver in January.

Fipke previously served as CEO of Vancouver-based Nerd Corps before the animation studio he co-founded was acquired by DHX in 2014 for $57 million.

“At some point, I guess in the business, you realize some scale and support by an entity like DHX, which we fit so perfectly into, made a lot of sense for us,” he said.

Bardel’s acquisition last October by Italy-based entertainment group Rainbow has been a boon for the company’s growth plans as well, Bhesania said.

While Bardel has been focused on TV animation for nearly 30 years, coming under the umbrella of Rainbow is opening up doors for a move into feature film productions.

“We now have the ability to be involved in more proprietary content that we want to get going,” Bhesania said. 

“What Rainbow gives us is a large distribution arm and a very large, one of the best licensing and merchandising companies in the world.”

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