While the pandemic has had a minimal impact on animation compared with other genres, with studios devising global, virtual pipelines long before the COVID-19 crisis, the European toon landscape has faced many changes over the last couple of years.

Animation production companies and distributors have had to deal with consolidation, the proliferation of subscription VOD and AVOD platforms and legislation that has affected their YouTube businesses.

The irony, for Lionel Marty, managing director of Paris-based “Kid-e-Cats” distributor APC Kids, is that there hasn’t really been any major event forum at which to discuss the impact that these changes have had.

“We’re experiencing the biggest and fastest changes in decades in terms of consumption modes, content demand, business models at a time where we are the least able to spend time with the other players in the industry and have meaningful exchanges,” he says.

Marty for one will be attending the newly scaled back MipJunior this week, which has been rolled into Mipcom. The Cannes-based event will inevitably be a quieter affair this year, with international travel still not viable for many companies.

The impact that these changes are having on rights negotiations may also be shaping the kind of event that MipJunior is becoming, according to Morgann Favennec, exec VP of distribution at French animation house Xilam Animation (“Oggy and the Cockroaches”), a former buyer for M6 and Disney.

“Even before the pandemic [MipJunior] was becoming more of a place to meet, pitch and negotiate, rather than to watch screenings and sell catalog. Everyone now wants fresh premium content unless you have strong brands that can be renewed,” she says.

Spin Offs

Indeed, there is plenty of strong IP that is being refreshed and expanded this season: The fourth season of “Simon” sees GO-N Productions’ mischievous little rabbit – based on the books by Stéphanie Blake – play super heroes with his brother Gasper in a new series titled “Simon SuperRabbit.”

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Finnish-U.K. production company Gutsy Animations, which makes 3D CG children’s series “MoominValley,” is also working on a spin-off series: “The Woodies of MoominValley,” a non-verbal toon aimed at a younger pre-school audience.

Media IM, meanwhile, which launched Russian multiplatform animation brand “Sunny Bunnies” from scratch six years ago, is looking at sub brand exploitation, according to joint managing director Maria Ufland.

“The global growth in demand for educational content during the pandemic has inspired us to launch into educational and musical genres. We have a six-part nursery rhyme sing-a-long planned for Christmas while ‘Sunny Bunnies ABC’ is planned for next year,” she says.

Strong Exports

The good news for MipJunior’s host nation is that despite the global friction, or potentially because of it, French animation is enjoying strong sales growth.

According to CNC and UniFrance’s annual report on the sector (using data gathered by Ampere Analysis during the period August 2020 to July 2021) animation is France’s number one programming export, generating 74.7 million Euros a year ($86.4 million) – with sales doubling in 10 years.

The same report reveals that worldwide rights for animation remain high, representing 35% of sales (worth 25.9 million Euros/$30 million) with top buyers hailing from U.S. and Germany.

Consolidation however, remains a concern for even the bigger French players. Favennec says there is much uncertainty in the domestic market following the planned merger between M6 Groupe and TF1, which will create a new French media group.

She adds that the loss of a potential buyer, and the growing consolidation in the market (both internationally, but particularly in France) has kids content companies concerned about getting content greenlit.

However, the executive takes some consolation from the fact that France Televisions family channel France 4 has been saved from closure by the French government – a move that she says was “crucial for the health of the French animation industry.”

The pandemic may have had a hand in saving this ailing kids channel as France 4 became instrumental in carrying educational shows during lockdown.

Fight for Rights

Increasingly, however, animation companies are becoming more reliant on streamers and global players. The CNC-UniFrance report shows that last year streamer Netflix was the biggest commissioner of French animation with 52 shows commissioned, followed by Warner Media with 50. Disney came in at 32 with France TV at 21.

The report also observes that the emergence of streamers competing for animated content has created a complex sales environment: “All want exclusive content – and windowing strategies are getting more complex and difficult to implement as buyers demand exclusive rights for longer periods,” it notes.

However, most of the companies Variety spoke with acknowledge that while this used to be the case, attitudes are changing. “Players are starting to understand that a smart strategy on various levels can actually reinforce the success of a show exponentially,” says Jo Daris, CCO and producer at burgeoning German production company Toon2Tango, which is focused on producing animated content for 6 to 11 year olds.

For Ufland, “Sunny Bunnies” cross platform strategy – which has seen it gain a presence in more than 160 territories – does not lend itself to exclusivity. However, the exec notes that streamers and broadcasters are becoming more flexible.

“It’s changing because the huge demand for content is exceeding the supply – sometimes buyers have to give up exclusivity if they want content that works,” she adds.

Nicole Keeb, ZDF’s head of international co-productions, development and acquisitions for children and youth recognizes the need for greater elasticity with programming rights. “We understand the needs for the producer, but for some shows exclusivity is important. But there are always windowing solutions. With each and every title we look at how to treat it best,” she says.

Keeb adds that for ZDF the ideal is still two years’ exclusivity but she says that the broadcaster is open to keeping this to one year, opening up a window for a streamer, and, after a period, returning to the exclusive deal. “We’re open for discussion. There’s no recipe right now. We are learning by doing what’s best for the property,” she says.

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“Edmond and Lucy” Credit: Miam!Animation

The Importance of Being Linear

According to Daris, a former sales manager at Hasbro, for shows with a strong licensing and/or toy potential, Europe is still strongly reliant on linear partners – because of the way audiences consume content.

“Platforms can’t push and promote a new show like linear partners can; the content burns faster on a platform – in general they don’t take half a year to a year to release 52 new episodes, but burn through that faster – and licensing partners cannot advertise on a platform,” he says.

The existing IP for “The Moomins” generates around $1 billion annually and Gutsy’s head of international sales Katherine Senior believes that “going down the terrestrial route” enables it to reach a wider audience “…then the lifecycle is VOD and at a later stage AVOD.”

The Finnish company is also diversifying: There’s an adult live action/animation hybrid drama in the pipeline – “Beyond Nature” – a coproduction with U.K. “Free Rein” producer Lime Pictures.

Gutsy has also formed a strategic partnerships with “Angry Birds” gaming company Rovio, a fellow Finnish firm that has invested 5 million euros ($5.8 million) in the company. According to Senior, the companies are working on new IP and developing animation and gaming alongside each other, with a soft launch of a “Moominvalley” game scheduled for December.

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“Melvin” Credit: Witipoup

AVOD Opportunities

A change in how children’s advertising is served on YouTube in 2019 has also had a significant impact on animation firms’ AVOD revenue streams. A year after implementation, kids multi-channel network Wildbrain Spark reported a 40% year-over-year revenue decrease, although it has started selling ads directly to advertisers using its sales teams in the U.K., the U.S. and Canada.

While Media IM, one of Wildbrain’s partners, reports that it’s still much harder to monetize on YouTube, it is confident that its “Sunny Bunnies” brand is established enough to weather the storm.

“Of course kids protection is important but building that loss of revenue through YouTube wasn’t easy. Now we’re working with Wildbrain on a strategy that works for everyone,” says Ufland.

According to APC’s Marty, meaningful revenues from AVOD only really come from established brands now, “but they remain a vector and add viewership to these brands in a fragmented media landscape,” he adds.

This certainly remains the case for Xilam, which says that free-to-air platforms are still a big part of its IP exploitation, with the firm now possessing over 61 YouTube channels.

“AVOD represents a big percentage of our catalog revenue: My digital team is bigger than my sales team. And the decline of YouTube revenues has opened the door to other partnerships, While this hasn’t fully compensated for those losses, it’s getting there,” says Favennec.

Free online social channels are also proving useful in supporting and piloting new IP, as was the case with new French TV pilot “Melvin.” Described as a socially awkward unicorn with magical cheeks and a dangerous grapefruit, the character has already gained a cult teen following on social.

The character’s creator Jérémie Marolleau is now developing a full series of “Melvin,” through his fledgling animation and distribution Studio Woutipoup, with the pilot already garnering 300,000 views.

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“Go Astro Boy Go!” Credit: Tezuka Productions

Return to Cannes

With such seismic changes happening in the industry what can animation firms expect from this year’s pared down MipJunior?

Sarah Hemar, deputy managing director of TV and digital at UniFrance, has arranged a showcase event on Monday to ensure that French animation remains central in a market that is filling up with strong, big-budget live-action series launches.

“I Love French Kids Stories” aims to shine a light on three new French animation series described as “high export potential.” There’s French-Japanese pre-schooler “Go Astro Boy Go!” – Play Big’s television spin-off from “Astro Boy”; Newen Connect’s new genie-based animation “Imago”; and Miam! Animation’s preschool forest-set series “Edmond and Lucy.”

Elsewhere, Gutsy has a new non-Moomin project “Bobble” aimed at 6-9 year olds, and Senior adds that she’s looking forward to a relatively quiet Cannes.

“Quiet festivals can sometimes work in your favor – it’s nice to have more than a rushed half hour with someone and establish a relationship,” she says.

For Daris, face-to-face meetings at MipJunior and the opportunity to expand Toon2Tango’s two-year-old network are the main draw.

The firm has three shows in production: ZDF/RAI pre-schooler “Grisu,” about a little dragon who wants to become a fireman; “Monster Loving Maniacs,” a coproduction with Super RTL in Germany and DR in Denmark; and “Agent 203,” a co-production with Super RTL, following a girl who needs to protect the galaxy against alien invaders.

APC is taking another space-aged comedy to MipJunior: “Galactic Agency,” an animated comedy for kids of 6-9 years old, while Favennec will be over in the French pavilion promoting the first season of Xilam’s 2D slapstick comedy series “Mr Magoo.”

Keeb, meanwhile, will be attending her first programming market in almost two years. While there’s a big push this year for Cottonwood’s new live-action co-production “Theodosia,” she will also be talking up two newly ZDF-commissioned toons: “Pirate High” and the girl-led CGI/3D-animated series “The Musketeers.”

Keeb adds that she’s also looking forward to meeting up with her opposite numbers at BBC, Channel 5 and France Television, an acknowledgment that after everything that’s happened in the last two years, there’s much to catch up on. “We try to work together closely even if it’s not official. We have the same goals. We all like each other.”