The overall health of Canadian film and TV production last year was perhaps even worse than expected, with the feature film and drama series formats taking particularly hard hits. The silver lining is that TV movies, docs and live-action children's programming showed signs of growth, and as media giants fade from the production scene, several mid-sized prodcos seem to be taking advantage.

Spending on film and TV production and development was down 18% in 2004, dropping to $1.24 billion from $1.51 billion in 2003, according to Playback's 17th Annual Report on Independent Production (see chart, p. 20). It is the lowest total since 1996 and the biggest year-over-year drop in what has become a four-year slide, with the previous two cycles having experienced decreases of 8% and 7%, respectively.

Playback figures show Canadian production and development spending on the rise throughout the mid-1990s, peaking in 2000 at $1.83 billion, but declining ever since. It remains to be seen whether a leaner, meaner Canadian industry can right the ship.

"It shows how fragile the sector is," says Guy Mayson, president and CEO of the CFTPA. "We got used to it growing rapidly, and we'd like to make sure it continues to grow."

Profile 2005, the report released earlier this year by the CFTPA and APFTQ, showed $1.98 billion spent on CAVCO- and non-CAVCO certified production for the period of April 1, 2003 to March 31, 2004, a year-over-year decline of 7%. Mayson points to weak demand for non-domestic fare in foreign markets over the past few years as the main cause, although he notes some renewed optimism coming out of MIPTV.

All the ballyhoo about the decline of Canadian drama series is justified by the figures, which show the amount spent on the format down 33% to $377.6 million. Even the federal government's move to restore its $100-million-per-year commitment to the Canadian Television Fund last March was not enough to stop the bleeding. And the Liberals, currently grasping on to power, have not announced their intentions for the CTF beyond this year.

Staples such as Cold Squad and Blue Murder disappeared from the scene last year, but it would be premature to call domestic drama series dead just yet.

"A lot of different broadcasters are getting more involved in drama - specialties, in some cases, and conventionals such as CHUM are doing more," Mayson says. "It's encouraging in some ways, but [drama] is still woefully under-funded and there does need to be a major commitment to ensuring that there is a critical mass of drama out there."

Spending on feature films was even worse in 2004, down 49% to $150 million. One major reason was that 2004 was a development year for several prodcos that had been active in production in the previous cycle. Some, such as Montreal's Remstar Productions, which says it will have about $35 million in production to report for 2005, did not submit their numbers for this reason. Others, such as Toronto's Knightscove Family Films, did disclose its 2004 development spending ($350,000) but had no production in the cycle (compared to more than $26 million worth in 2003).

Other companies not in production cycles last year - and hurting the bottom line for features - include Keystone Pictures, Visual Bible International and Copper Heart Entertainment. Development spending across all formats and genres was down only slightly to $25.8 million.

Also adversely affecting the domestic feature biz is the decline in copros with the U.K., traditionally Canada's biggest feature partner, after the government there tightened rules governing official copros.

The move out of film production by Alliance Atlantis and Lions Gate also contributed to the decline in feature spending, as did the fact that Vancouver's Brightlight Pictures did $10 million less in proprietary production (but $52 million, or $28 million more, in service production).

Several other companies had a big year for service work, most notably Montreal's Muse Entertainment ($77 million, up 28%).

Also on the positive side, spending in the TV drama category of MOWs/ pilots/miniseries and shorts was up 19% to $213 million. The international demand for MOWs was strong several years ago (with $276 million spent in 2000), but soon dropped, burning several prodcos that made the format their bread and butter. But the market for TV movies, especially in the U.S., appears to still have a pulse. In fact, some companies have grown on MOWs.

Calgary's Voice Pictures, a big mover on this year's list, soaring from seventeenth to fourth spot, reported $50.1 million in production and development in 2004 (up 110%) on the strength of TV movie copros with American partners. Titles include three well-received installments of Little House on the Prairie (with Touchstone), Karroll's Christmas (with Fox), and two western MOWs for the Into the West series (with Turner and distrib DreamWorks).

"In the U.S., there's a huge demand for movies of the week," says Wendy Hill-Tout, Voice president. "The licences have gone down, but they're still making lots of them. We just look at the international marketplace to decide what to go with."

Voice benefited last year not only from Alberta's geography - ideal for its western-themed projects - but also from the Alberta Film Development Corporation's strategy of offering financial incentives to foreign producers that partner with a local prodco.

There was a 23% jump in documentary production to $132 million in 2004, as broadcasters and distributors become increasingly aware of the potential payoff for this type of programming - far cheaper to produce than drama - on both the big and small screens. A number of new small and mid-sized players added to the bottom line of doc production in 2004, while existing players such as Partners in Motion, Breakthrough Films & Television and Summerhill Entertainment reported increased spending.