The TV Animation Business Part 5

How Companies Keep Their Costs Down: Co-production

Imagine this scenario. You live in the United States, but when you turn on your TV, 95% of the shows come from Mexico. Yes, they’ve been dubbed into English, but the people, the stories and the locations are clearly not local to the U.S.

That is the scenario that faces people in other parts of the world. When they turn on their TV’s, they’re often seeing American programming. In order to keep local programming alive and to nurture a local industry, countries have instituted quota systems. They demand that channels broadcast a certain percentage of shows that are made locally.

The problem is that the local market is often too small to support local programming. Canada’s population is only 30 million people and when you divide them up into audiences for each channel, those audiences are pretty small. You can’t charge a high enough subscription fee or charge advertisers enough to pay for programming.

Countries sign co-production treaties with each other specifying that a show co-produced by two treaty countries will be considered local content in each country. A Canada-Britain co-production is considered local programming in both Canada and Britain.

The benefit for producers is that they don’t have to raise all the money for a show locally, only a part of it. This makes it easier to finance shows. Governments like this because it keeps people working locally and the government can claim that they’re protecting local culture.

There are two downsides to co-production. One is that while a producer only has to raise a portion of the budget, the total budget of a co-production is higher than if a single producer was raising all the money. That’s because you’re paying overhead in two countries instead of one.

The other downside is that co-producers are investors, not subcontractors. As a result, any profit has to be split. In addition, investors have creative input where subcontractors don’t. Each co-producer probably has a local broadcaster signed on, which means that all creative decisions have to be approved by a large number of people who are trying to tailor the show to their own agendas. This inevitably leads to creative compromises that weaken a show. I can say from personal experience that the creator of a show is sometimes ignored when those compromises are being made.

If the point of local programming is to reflect the lives of the audience, co-productions themselves are a compromise. However, from a producer and government standpoint, half a loaf of local culture is better than none.

This wraps up my simplified explanation of the TV animation business. There are more wrinkles than can be covered here. However, this is some of what a producer or creator face when trying to get a show financed and made. If you want to know why certain shows turn up on your TV or why other shows don’t, the answer is most likely based on economics.