Animated profits

As part of a flurry of recent investment activity, Finance Wales has put £600,000 in an animation company producing children’s programming. But with its aggressive strategy targeting new digital media, the company may be venturing into risky territory. Dave Keating reports.

Calon TV, a Welsh animation company marketing to children, has received a £600,000 ($1.2 million) investment from Finance Wales, the Welsh Assembly Government subsidiary charged with financing the country’s creative industries.

The company says it plans to use the money to aggressively pursue a strategy of organic growth and acquisition, extracting more value from its already completed projects and launching new efforts in digital and mobile phone TV, possibly through the acquisition of smaller companies. The company also says it plans to actively take more control over its intellectual property holdings and develop a marketable library of rights.

Robin Lyons

“[This funding] gives us a chance to actively take more control over the intellectual property rights we create and to expand upon our slate of projects,” said Calon managing director Robin Lyons. “We also need to embrace new digital platforms, and are looking to acquire companies to help with this.”

A key part of the company’s plans will centre on developing new distribution channels for the digital age, such as mobile, online and gaming. Such ventures can have uncertain results, particularly with mobile TV and gaming. And with revenue streams from online video still uncertain, the expansion into those areas could be a risky gambit.

But with its significant assets from its previous productions, Calon is in a good position to make a bet. The BAFTA award-winning management team, coming from a management buy-out from Siriol Productions, has produced such worldwide TV favourites as Superted, Sali Mali and Hilltop Hospital. The company has just finished production on a 3D animation project called Hana’s Helpline, which will be screened by three UK TV channels and five channels across Europe. The company has also been working on a series called Animated Arias, in which operatic arias are sung by cartoon characters.

Calon’s record in Wales is also impressive. The company boasts the best export record of any independent production company in Wales, and its programs have been broadcast in over 100 countries around the world. This kind of track record is in line with the main mission of Finance Wales, which was formed as part of the Welsh Assembly Government’s creative industries strategy in 2004. The firm provides financial and managerial support to Welsh SMEs, and is backed by European and private sector funding. The financial year 2005/2006 was hugely successful for the firm, with record levels of investment – £21 million – in Welsh businesses. The firm also made its 1000th investment during this time.