Business

Quebec Animation Makes Quite A Team. Twenty 2D/3D animation and special effects companies from Quebec, Canada have formed a union in order to better promote the award winning work done in the region. Called Quebec Animation, the association is supported by the Quebec Minister of Industry and Commerce, the Quebec Minister of Communications and Culture, the Quebec Minister of International Relations, the Montreal Bureau of Cinema, and the Canadian Service Center in Multimedia Applications (CESAM). The association sets up a focal point for foreign companies, the press and other related businesses to find information regarding the association's members and facilitate business. Major players in the world market will have one place to go when seeking out information and contacts regarding co-production partners, acquiring films and TV programming, distribution of their productions, and locating desired service needs within Canada. The twenty represented companies are:

Behavior Studio, a project-based film, digital cinematography, HD and video company, specializing in project evaluation, SFX supervision, 2D and 3D computer design and animation. Behavior Studio's credits include work on the animated short VHX.

Big BangFX/Animation Inc., a 3D computer and digital FX house, offers concept, design, creation, research and development for television, films and commercials.

Buzz Image Group, a video post-production, visual FX and 2D/3D computer animation facility, has won the Emmy for Outstanding Special Effects for a Series for their work on The Sound Of Carceri.

Cinar Studios, a well-known 2D animation production and distribution company, provides background location design and key painting, ink and painting, composition, storyboards, layouts and posing, character design, and post-production.

CDMED (Pygmee Productions) specializes in 3D medical imagery techniques to create trips through the human body. CDMED created the award winning short Sentinelles.

Cine-Groupe is a leading entertainment company involved in the development, production, post-production, and distribution of animation and fiction programming that is seen in 125 countries.

Covitec-Animation, part of Group Covitec, offers the largest ink and paint facility in Quebec. Covitec-Animation credits include Bob Morane, Paddington Bear, Pirate Family, and Caillou.

Fly Studio, a new media company, produces projects for video broadcast, Internet, 2D/3D animation and gaming.

Hybride Technologies Inc., a special FX house, specializes in effects for features, advertising and video, and operates its own research and development department to create new software. Hybride's credits include The Faculty and the upcoming Battlefield Earth.

Icestorm Digital, a visual effects and design company, focusing on integration of computer generated images with live-action and development of digital cinematography.

KliK Animation Inc., a 3D-character design and modeling animation house, focuses on bringing 3D animated characters to life for series and live-broadcasts. In 1999, they won the Best Animated Series Gemini Award for Journul.

KOmotion, a motion graphics studio, focuses on broadcast design, film titles, and television commercials.

Les Productions Pascal Blais Inc., an international advertising animation house, brings to its clients a wide array of styles that include: Disneyesque, Looney Toons, CGI characters, FX animation, stop-motion and clay character animation. Les Productions work on the animated short film La Vielle Dame Et Les Pigeons has garnered the company an Academy Award nomination, Grand Prize at the World Animation Celebration, and Grand Prize Animation at the BAFTA Awards.

La Fete Group is a production house involved in the development, production and distribution of live-action feature films, animation, documentaries, television programming and other multimedia projects.

Michael Mills Production Ltd. is Canada's oldest animation studio. They develop new and original animation projects that have recieved many international awards including the Academy Award for their short film Charade.

Motion International Inc.'s Youth and Animation produces childrens and family animation series and movies. They have focused over the years on traditional 2D animation, however they have now moved into the 3D animation world.

Softimage/SPCG is a leading developer of high-end software for all areas of professional visual content production. In addition to creating 3D and 2D animation tools, Softimage creates and edits video programming which includes internationally recognized shorts like Liberation.

Taarna Studios Inc., a computer animation company focusing on creating virtual actors, is committed to bringing top quality character animation to the giant IMAX screen. Their credits include the production of Virtual Actors Featuring The Boxer.

Tube Images, a computer animation and visual effects company, creates television, film, and advertising projects. Tube is currently in pre-production on three animated television series and is developing a 3D feature film.

Voodoo Arts, a fully-integrated film and commercial production house, handles every part of the production process including graphic design, film and visual effects production, and digital post-production.

For more information on the association and their members contact Sandi Wright at Tel.: (514) 935-0166; Fax: (514) 733-1094; and E-mail: sandi@vergroup.com.

MTV on-line splits from Nick on-line to form its own company. © MTV Networks.

A Split Decision For Net MTV. On Monday, December 20, 1999, MTV Networks, the music/entertainment cable television and Internet business, announced it would split its Net company into two separate groups. MTV Networks On-line will be divvied up into the MTVi Group, which includes VH1.com, MTV.com and SonicNet.com, and Nickelodeon On-line, which includes nick.com, nickjr.com, tvland.com, nick-at-night.com, gas.nick.com, teachers.nic.com and redrocket.com. "Executives in the past have stated that both companies would be going public," said a spokesman for MTV Networks. "This move obviously strengthens both companies," he said, adding that this was the next step down the path of an IPO. Nicholas Butterworth will continue to serve as president and chief executive of The MTVi Group. Fred Seibert will helm Nickelodeon On-line. Both execs will report to Tom Freston, chairman and CEO of MTV Networks. This action comes in the wake of a federal anti-trust probe by the U.S. Justice Department on the company. Practices such as demanding exclusive rights to air music videos and setting unfair rates due to their monopoly of the music video market are issues being investigated by the Justice Department.

Macromedia Gains The Net's Andromedia. Early in December 1999, Macromedia, a leader in digital and Internet software, announced it had completed its acquisition of Andromedia Inc., a leading provider of eMarketing software solutions for e-commerce. Macromedia previously announced a definitive agreement to acquire Andromedia on October 7, 1999. As part of the merger, Macromedia will obtain all of the outstanding stock in Andromedia. The company will issue 5.2 million shares of stock in connection with the deal and will incur one-time charges from the merger of up to $5 million in its fiscal third quarter. Founded in 1996, Andromedia has more than 120 customers, including many of the largest sites on the Web. Major customers include Audi, Boston Herald, Checkout.com, Cinemax, Columbia House, E*TRADE, Intuit, Levi Strauss & Co., Office Depot On-line, Sun Microsystems, the U.S. Postal Service, The Weather Channel, and West Coast Entertainment Corporation. Strategic partners include Allaire, Art Technology Group, BroadVision, Computer Associates, EarthLink Network, Engage Technology, Hewlett-Packard, iXL, Kana Communications, Inc., NetGravity, Netscape, Sun Microsystems, and Vignette.

William Joyce's George Shrinks.

Corduroy Bear by Don Freeman.

Maurice Sendak's Seven Little Monsters.

Nelvana Goes Public With $40M Deal. Nelvana Limited has announced a deal with Public Broadcasting Service (PBS) to produce the network's first Saturday morning children's cartoon block. The deal is worth approximately US$40 million. Nelvana will produce six book-based children's series for the U.S. public network's Fall 2000 season. The multi-year deal will also include the commission of a minimum of two of the six series for weekly runs featured in PBS KIDS. Licensing rights for at least four of the six character brands will be mainly handled by Nelvana. In addition, the Canadian company will also have significant licensing participation with the other two character brands. The shows will be based off of best-selling children's books: Seven Little Monsters by Maurice Sendak; George Shrinks by William Joyce; Timothy Goes To School by Rosemary Wells; Corduroy Bear by Don Freeman; Marvin The Tap Dancing Horse by Michael and Betty Paraskevas; and Elliot Moose by Andrea Beck.

Maria LoConte, president and creative director of LoConte.2.

LoConte Upgrades To LoConte.2. Maria LoConte has launched her upgraded visual strategies company, LoConte.2 (L.2). Formerly LoConte co-headed Boston-based LoConte Goldman Design, Inc. with former partner Patrice Goldman. After parting ways with Goldman and closing their company, LoConte designed the new L.2 group dedicated to high-end visual solutions for television and advertising. The company will be based at the National Boston facilities. National Boston is one of the largest production and post-production companies in Boston. LoConte plans to work closely with many of the talents within National Boston, including senior designers at National Ministry of Design and sound designers at Rumblestrip. For more info on LoConte.2 contact: 115 Dummer Street, Brookline, MA 02446; Tel.: (617) 734-4800; or E-mail: maria@loconte2.com.

Holland's ComicHouse Moves Into The Wild. Over the holiday break Holland-based ComicHouse started its move to a new home. After spending fifteen years in Amsterdam, the animation house has taken root in Holland's largest nature reserve "DeVeluwe." The new base of operations gives ComicHouse the needed workspace and client accessibility that was lacking in the confines of the city. The company re-opened in Ooserbeek on January 10, 2000. For more information contact ComicHouse at: Stationsweg 20, 6861 EH Oosterbeek, The Netherlands; Tel.: ++31 (0)26 3210032; Fax: ++31 (0)26 3210036; and E-mail: mail@comichouse.nl.

AOL & Time Warner Merge Into New Media Giant. On Monday, January 10, 2000, America On-line, the leader in on-line services, announced their acquisition of Time Warner, the world's largest media and entertainment company. Valued at approximately US$180 billion, the stock for stock merger is what will be the biggest corporate merger ever. America On-line's chairman and chief executive, Steve Case will serve as chairman of the merged company entitled AOL Time Warner. AOL and Time Warner will each name half of the board of directors of the new company. Time Warner's chairman Gerald Levin and chief executive of the new AOL Time Warner said, "This really completes the digital transformation of Time Warner. These two companies are a natural fit." The union creates a combined company which features a market capitalization of $350 billion and an annual revenue topping $30 billion. The deal values Time Warner at about $110 a share, a high percentage over its $64.75 a share value late Friday. AOL shareholders will own 55 percent of the combined company and Warner shareholders will own the rest. Government approval of the deal is still pending. If the merger is okayed the combined AOL, which provides high speed Internet access to over 20 million subscribers, and Time Warner, a media content leader, has the potential to steer the future direction of the commercial media market. Christopher Dixon, media analyst with PaineWebber, said to CNN, "Today's announcement really underscores the strength of the Internet. The Internet is here and it's no longer just about techs. It's about broadband, it's about streaming video, it's about streaming music and it's about coming up with all kinds of ways to use your computer in a very TV-like experience."

Disney Delivers Strategy 2000. Disney's CEO Michael Eisner delivered a four-part strategy for improving the entertainment giant's slumping fiscal achievements. The Y2K plan includes aggressively attacking trouble spots, squeezing more profits out of existing businesses, expanding those current businesses' affairs and continuing development of new products. The seemingly Business 101 strategy also includes annual savings of up to $300 million from changes in purchasing. Eisner said cost-cutting efforts in live-action film production trimmed investment by $400 million last year, and another $100 million in savings is expected this year. Nonetheless, simplicity works, as shareholders agreed with Eisner making shares rise 13/16 to 32-7/16 on the New York Stock Exchange the day of the announcement. Some of the companies upcoming opportunities may have perked investors ears also. Disney may get a boost from the opening of new theme parks -- Disney's California Adventure in 2001, DisneySea in Tokyo in 2001 and Disney Studios' theme park at Disneyland Paris in 2002. In addition, Disney's plans to expand its Internet presence, based in part on its film library and news and sports assets. Eisner said Disney was especially relying on the growth of theme parks, the Internet initiative and upcoming feature films like Dinosaur, Kingdom Of The Sun and Atlantis. The down year also resulted in Mickey not giving Mikey Eisner and other top Mouse House execs their year end bonuses. Mr. Eisner will have to get by on his US$750,000 salary this year, for he will not get $5 million like last year or the $9.9 million he recieved the year prior.

Mill Film & Magic Camera Morph Into One. In December 1999, Mill Film announced that they united operations with sister company Magic Camera. The combination will create a formidable start-to-finish London-based feature film facility mixing Mill's visual effects talent and technical strengths with the digital effects, miniature construction and photography of Magic Camera and Magic Models. Antony Hunt will serve as managing director of Mill Film and will take charge of day to day operations of the combined companies. Hunt has been at the helm of Magic Camera and Magic Models for the past 11 years. Robin Shenfield, group managing director, commented, "We are executing our strategy to broaden our business and capitalize on the synergies between Mill Film and Magic. Mill Film is the only British film effects facility to have a studio base that offers years of experience in feature film making plus some of the best digital visual effects talent and technology based from Soho." Magic Camera has over 80 film credits to date and has recently worked on projects such as The World Is Not Enough, Mission:Impossible II and Entrapment. Mill Film has gained credits which include Babe, Enemy Of The State and DreamWorks-Universal epic Gladiator. Mill Motion Control has worked on feature films including The Mummy, Saving Private Ryan and Sleepy Hollow, plus a whole host of music videos and commercials. Hunt added, "Mill Film has a healthy supply of digital effects, miniature construction and motion control work for the start of the New Year. It has recently been confirmed that we will be providing digital effects for the new Warner Bros. and Castle Rock production Pluto Nash, plus continuing with the ongoing work for Natural Nylon. Mill Motion Control is currently working on 102 Dalmatians."

Santiago Studios In Search Of U.S. Co-Prod. Several animation studios in Santiago, Chile, including Arce Studios, EMU Ltd., ROOS Film S.A., and Trimedia S.A. have formed a partnership to promote the animation business in Santiago. The partners are looking for co-producers and/or investors for their products. Alvaro Arce, President of Arce Studios, worked in the animation industry in the United States for many years at Hanna-Barbera, The Walt Disney Company, and others. Alvaro has several original series currently in development. Arce Studios is now at work on animation for Take The Bite Out Of Crime for BBDO in Santiago. A showing of Alvaro Arce's artwork is opening the new Santigo Marriott Hotel as well. In addition, the partners have just presented a live Christmas show, Una Cancion De Navidad (A Christmas Song), in conjunction with TVN Television Nacional de Chile. Una Cancion De Navidad will be made into a TV movie for TVN combining live-action and animation for Christmas 2000. Alvaro Arce can be reached at his studio in Santiago at Tel.: 56-2-206-7385. Jean Wright will be representing the Santiago partnership in the U.S. and can be reached at: Tel.: (818) 360-8321 or E-mail: jjwright@gte.net.

Disney's Imagine Finds New Home At Fox. Imagine Television, the makers of The PJs, is leaving Disney for its new home at Fox. The three-year collaboration between the small screen arm of production house Imagine Entertainment and 20th Century Fox Television will take effect at the end of April 2000. Worth up to $30 million, the deal also includes a two-year option extension. Imagine TV had been based at Walt Disney Television since it was formed in 1997 by Imagine Entertainment principals Ron Howard, Brian Grazer and Imagine TV co-chairman Tony Krantz. All current Imagine TV properties, including shows now in development, will stay at Disney. About leaving Disney Krantz said to Reuters, "The past three years with Disney. . . have been fantastic for Brian, Ron and me. Unfortunately, their economics were such that we could not continue together."

Disney Channel With A Latin Touch. On Friday, January 14, 2000, Walt Disney International-Latin America announced the launch of the Disney Channel Latin America and an exclusive satellite television distribution agreement with Galaxy Latin America, LLC for DIRECTV service in Spanish-speaking Latin America. "Launching the Disney Channel in Latin America in 2000 is an exciting initiative for the Walt Disney Company," said Diego Lerner, president and managing director, WDI-Latin America. "As we have in other parts of the world, we will now create a unique and entertaining television destination for kids and families throughout Latin America." The 10-year deal provides DIRECTV, the leading digital television service and a global distributor of television programming, with exclusive rights to the Disney Channel in all Spanish-speaking Latin America, except Puerto Rico. In addition, the channel will also be distributed via cable systems in the region. The scheduled launch for Disney Channel Latin America is the second half of 2000. "This agreement is the result of a wonderful relationship with Disney that began three years ago with the launch of the Disney Weekend exclusively on DIRECTV," said Kevin N. McGrath, chairman of Galaxy Latin America, LLC, the company that provides DIRECTV to all of Latin America and the Caribbean. The high demand for Disney Weekend in the region spurred both Disney and DIRECTV to expand the offering to a full Disney Channel. The satellite provider was the first service in Latin America and the Caribbean to offer a vast programming package with Disney animated and live-action series, movies and specials. The Disney Weekend began airing in early 1997 and will continue to air on DIRECTV until the Disney Channel Latin America starts broadcasting. So far nine international Disney Channels have been launched in Taiwan, UK, Australia, Malaysia, France, Middle East, Spain, Italy and Germany.

Outlook 2000 For Acclaim. Acclaim Entertainment Inc., a leading worldwide developer, publisher and mass marketer of software for use with interactive entertainment, reported its results for the first quarter of fiscal 2000 ended November 30, 1999. Net revenues for the quarter were $101.2 million, compared with $104.8 million in the first quarter of the prior year. Net earnings for the quarter were $0.4 million, or $0.01 per diluted share, compared with net earnings of $10.3 million or $0.16 per diluted share for the same period in the prior year. The quarter results were effected by the shifting of certain product launches to the second quarter, US$6 million in royalty expenses to extend the WWF license through November 2000 and slower than expected sales of certain products. During the quarter, Acclaim introduced multiple titles for the Sega Dreamcast, and introduce its first two titles under its new brand, Club Acclaim, which targets a younger audience and included Acclaim's Mary-Kate & Ashley titles for both Color Game Boy and PC. Hoping to boost sales in the second quarter, Acclaim will release 13 new titles, led by the launch of ECW Hardcore Revolution, which capitalizes on Acclaim's proven expertise in wrestling games, and South Park Rally, which translates the humor of South Park into a kart-style racing game. Other key releases for the second fiscal quarter include Shadow Man and Re-Volt for Sega Dreamcast, Armorines for Nintendo 64, and two more Mary-Kate & Ashley titles. Looking to the future, Acclaim is developing a broad range of new titles for new and existing platforms. Key products in development include: Furfighters for Sega Dreamcast; Vanishing Point, a road-rally game featuring more than two dozen licensed road cars for PlayStation; Dave Mirra Freestyle BMX, an extreme sports title co-developed by and featuring X-Games stars Dave Mirra and Ryan Nyquist; a sequel to Acclaim's multi-million selling TUROK franchise; new additions to Acclaim Sports' popular Jeremy Mcgrath Supercross, All-Star Baseball, NBA Jam and NFL Quarterback Club brands; and new racing games based on both the Ferrari and Ducati licenses. For the upcoming PlayStation 2, the company plans to have a minimum of three titles available during the initial launch. Acclaim also anticipates growth in its increasing investment in the Internet. A key element of Acclaim's Internet development capability is its proprietary NetSpine technology, which will allow the company to build games faster, more cost-effectively and with superior functionality across multiple platforms. Using NetSpine, Acclaim intends to make one of its core brands the first truly Internet-playable product. Acclaim is also looking at potential acquisitions of on-line development studios, and has initiated discussions regarding partnership opportunities with major Internet players. Acclaim On-line already boasts a consumer base of approximately 500,000, with traffic increasing 25% in December alone. "As the interactive marketplace evolves, we are focused on strategic initiatives designed to build our business for the future," said Gregory Fischbach, Co-Chairman and CEO of Acclaim. "We have enhanced our in-house development capability to take advantage of the growth in the industry as a result of the launch of the next generation console systems. In addition, we are putting in place a brand development structure that increases our responsiveness to consumers and are expanding our on-line initiatives to take advantage of our proprietary NetSpine Internet technology."

New Visual To Impact The Web. New Visual Entertainment, Inc., a 3D production company specializing in 3D product development and distribution for special venue theaters, home video, broadcast, and theatrical markets, announced its completed acquisition of Impact Pictures, Inc., a small San Diego-based multi-media production house specializing in Web animation, streaming media and high-end CD-Rom corporate presentations, in a stock for stock transaction. New Visual plans to utilize the creative hardware and staffing assets of Impact Pictures to launch its own multi-media and Web animation services division in mid-January or early February 2001. Impact Pictures former president, Mark Rabe, brings to New Visual a respectable base of initial clients for both Web animation and CD-Rom projects. Headquartered in San Diego, the multi-media and Web animation services division will also redesign and upgrade the company's Web site, newvisual.com, which should be fully upgraded with Flash technology by mid-to-late February.