Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m S E P T E M B E R 2 0 1 7 25 ing B-movies, low-budget flicks that usually earned a profit if not necessarily artistic acclaim. They formally co-founded Salter Street Films in 1983. (Salter Street was the location of Donovan's apart- ment in Halifax.) "I formed the opinion that the world of law would be much bet- ter without me, and the evidence supports that," Donovan quips. "I enjoyed law, but I don't think law liked me. When I articled at Dalhousie Legal Aid, I was in court every second day. I found that hugely interesting. The more normal practice was more boring. But the world of law decided I was better suited elsewhere, and I came to agree with that." In their film production business, Paul was the screenwriter and director, while Michael was the producer and travelled the world selling the movies. The company eventually switched to producing Canadian TV shows, focusing on comedy, says Donovan, "because comedy tends to be culturally specific." They started with the sketch comedy series Codco, performed by Newfoundlanders, then created This Hour Has 22 Minutes. This was to be "the same thing as Codco, but more immediate and 'of the moment' and would be more likely not to be arbitrarily [can- celled]." Their instincts were spot on: The show is now in its 25th season. It is currently produced by DHX for the CBC, and, says Donovan, "ratings are as high as, or higher than, ever." Salter Street's revenues grew to $30 million by 1997, and the next year, Donovan took the production company through an initial public offering on the Toronto Stock Exchange. Salter Street was acquired in 2001 by Alliance Atlantis for $84 million, but Donovan, rather than retire, decided to keep busy in the entertainment industry. While at Salter, he had made forays into U.S. television, team- ing with director Michael Moore to produce a political satire, The Awful Truth, that lasted two seasons. The connection with Moore continued, however, as Donovan produced his documentary film Bowling for Columbine, an exploration of the roots of America's penchant for gun violence. As Bowling's producer, Donovan accepted the Academy Award in 2003 for the best documentary feature. He relishes the memory of the Oscar audience booing the film's victory. "It was beyond satisfying because it meant that they were paying attention. We were having an impact." Donovan founded the Halifax Film Company in 2004, merging it two years later with Decode Entertainment to form DHX. In 2007, the company premiered Shake Hands with he Devil, a feature film based on Lt.-Gen. Roméo Dallaire's autobiographical book about the 1994 Rwandan genocide. The film received 12 Genie nominations, including one for Donovan's screenplay. But it is as a provider of children's content that DHX has flour- ished. Donovan leveraged the skills of the National Film Board's exceptional animators, the ongoing opportunity of selling the same programs to new generations of kids and the rise of the Internet to create video-on-demand services. "I decided to focus DHX on one area only, and it could have been almost any area. But I decided on animation and children's programming," recalls Donovan, in part because Canadians are world leaders in that area. "I thought that was a genre in which we could create a company that had a world advantage. Unlike com- edy, which is culturally specific, animation sells in every country." DHX went public in 2006, raising $20 million in an IPO on the TSX. Today, DHX has a market capitalization of approximately $600 million, trading on both the TSX and the NASDAQ. In addition to making new programs, Donovan also wanted to build up a back catalogue by buying the rights to existing cartoons. In 2012, through its acquisition of Cookie Jar Entertainment, DHX bulked up to more than 9,600 half-hour shows in its library (since expanded to 13,000 half-hours). DHX's library includes Inspector Gadget, Teletubbies, Arthur, Caillou, Franny's Feet, George of the Jungle and Yo Gabba Gabba! Some 70 per cent of the firm's revenues are generated by its content library and 30 per cent by original production. The library was acquired in advance of, or simultaneously with, the launch of digital delivery platforms. The timing was perfect. Subscription services such as Netflix were eager to license chil- dren's programs to feed into their offerings. Other digital streaming platforms and broadcasters that DHX supplies include Amazon, YouTube, Hulu, Nickelodeon and Cartoon Network. DHX Media has 20 offices worldwide with 1,400 employees, including 313 in Halifax who create shows and 22 Minutes. "Advertising-supported streaming is a brave new world," says Donovan. When YouTube evolved into Advertising Video On Demand, DHX was able to upload the vast majority of its content library to the platform and turn a profit almost from the first day. "I put a lot of time into that, because I think it's the future," he says. It's a future that Donovan plans to continue to help shape. "I intend to retire in about 30 years," he says. CORPORATE COUNSEL Connect with Find almost 4,000 corporate counsel and over 1,500 organizations along with fresh editorial content, information on deals and links to important resources. Lexpert.ca/ccca ntitled-6 1 2017-08-09 4:06 PM

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