The story of Canada’s digital media sector
 
Today, (30th April) at the Digital Exchange, Aslin Unlusoy, Trade Commissioner and Vice Consul, at the Canadian Embassy here in Dublin gave us an excellent presentation and introduction and background to Canada’s digital landscape. It’s a good story, started more than ten years ago with foresighted government polices that invested in education and promoted the study of maths, technology and the sciences in school. 

This presentation is timely as we've seen alot of movement in the online gaming industry in Dublin over the last 6 months.  The speculation is that Dublin may become a European hub and European headquarters for international gaming companies looking to penetrate the European market.  And, the growth segment is seen to be women between the ages of 30 and 40.  Will this presentation suggest that we can expect an influx of leading Canadian companies? 

Back to the presentation.
According to IMD: World Competitiveness Year Book 2008, the overall skill level of Canada’s workforce ranks high among competing countries. It has the highest percentage of individuals achieving at least college or university education, among OECD member countries.  As you can see Ireland ranks some way behind.

Source: IMD World Competitiveness Year Book 2008

 Below are extracts from a very informative presentation by Ms. Aslin Unlusoy
Trade Commissioner, ICT Digital Media, Investment, Wind Energy

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.

Education and Training Products

• Canadian multimedia is setting new standards in courseware design, entertainment, 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 maths, languages and science education.
• VitesseLearning is the largest independent business in the North American customized learning marketplace.

Canada has a good story to tell in its ITC sector:

• Canada ranks 9th in the world for ICT competitiveness
• 32k companies, 600k employees; 43% with 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

Candain 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

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

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).

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.
o Cryptologic, leader in Internet casino and branded gaming software
o Demonware, gamers can play ea other over the internet, Dublin & Vcr
o Groove Media launched SkillGround in Dublin; free games download
o Bioware, computer and console video games
o GameLoft, huge catalogue of games for download to mobile phones
o Next Level Games, Mario Strikers Charges for the Wii

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’:
o Mobile Content
o Serious Gaming. Canada has all the assets to become the 3rd ranked global producer targeting the US and UK markets.
o Business applications and web marketing.
o 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

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.

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.

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:

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.
o 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.
o Blast Radius designs Internet customer experiences for leading global brands such as Nike, Nintendo, BMW, Heineken and Sony.
o Eccentricarts specializes in web strategy, design and development. Its state-of-the-art webware includes FlashMX and ColdfusionMX.

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.

Enabling Technologies

• 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 events through certified distributors, or directly to decision-makers.

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.

What The Canadian Embassy 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)

Contact Details

Ms. Aslin Unlusoy
Trade Commissioner, ICT Digital Media, Investment, Wind Energy
Tel: 01 234 4061 E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Mr. John Sullivan
Trade Commissioner, ICT Wireless & Software, Life Sciences, Agri-food
Tel: 01 234 4019 E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 In conclusion, the presentation did not hint at an influx of Canadian gaming companies in Ireland - far from it.  It told of a very successful Canadian industry encouraging the world to look to it for expertise and as a model on how to grow a niche expertise. 

Interestingly, in Prague on May 5th, Canada and the European Union formally launched negotiations toward a free trade agreement as announced by Prime Minister Stephen Harper, European Union President Mirek Topolanek and European Commission President Jose Manuel Barroso.  According to commentary in thestar.com:
“Harper says Canada is moving toward an economic partnership agreement with the EU at a time when many other countries are placing protectionist walls around their trading relationships.
The Prime Minister estimates a trade agreement with the EU could give a $12 billion shot in the arm to Canada's economy”.
Canada, of course, has strong ties with France and that too would be an easy access point for the French speaking Canadians to enter the EU market.  Our English language and current favourable corporate tax regime remain in our favour.  It would be a great boost to the industry to attract some of these leading Canadian companies to set-up subsidiaries in Ireland.  Maybe our falling costs might help get them here.