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Kids rising early on Sundays this fall will be able to enjoy watching a little boy named Justin as he embarks on worldwide imaginary adventures.

To them, it's just a great-looking show called Justin Time on specialty cable channel Disney Junior. But for Guru Studio, the airing represents a creative and business milestone.

The Toronto-based company, which has 100 employees and more than $7-million in revenue, has been producing computer-generated animation for commercials and TV shows since 2000.

Frank Falcone, Guru's president and creative director, says that, although he always wanted to create original content, it's always been an expensive, time-consuming undertaking. The hit animated show Phineas and Ferb, for example, took 15 years to get on the air.

"You have to be in it for a long haul for TV development," Mr. Falcone says.

But dedication isn't the only thing you need to create a hit series. A small animation company also needs a great idea, top-notch delivery, the right team, money and the willingness to take a risk and wait for it to pay off. Guru's ability to think long term, keep its finances in shape and truly understand its market helped it persevere.

It was back in 2007 that Mr. Falcone decided his company was ready to take more risks and embark on creating original content. Guru had a staff of 50 at the time, most of them animators, and was doing well-respected work in commercials (it invented animated characters such as Cheeseasaurus Rex for Kraft Foods Inc., for example) and TV shows, including The Backyardigans.

But in order to expand, he needed the right expertise on his team. So he hired development and acquisitions veteran Mary Bredin. Lucky for him, Ms. Bredin, who had worked in Europe for the likes of Walt Disney Television International, wanted to move back to her native Toronto and work for a smaller company.

Mr. Falcone and Ms. Bredin told staff they were searching for new ideas for a kids' show. Animator Brandon James Scott, a new hire and recent grad at the time, showed them sketches for a show called Mike in Time. They liked the look Mr. Scott had for the little boy and felt the story concept was fresh and also had an educational edge, taking kids to different places and times.

Ms. Bredin began to share the concept at trade shows across North America. Over time, the show evolved: Mike became Justin, characters got older, Justin lost his imaginary friend Zepi and gained an odd creature named Squidgy and gal pal named Olive.

Although Guru was generating interest in the show, there were challenging moments during its development. For example, the creative team struggled with moving from 30-second commercial segments and working from existing scripts to putting together 11-minute narratives.

Developing the spunky and affable Olive (a character they did not want to be a know-it-all) was also a sticking point. "There were moments when we just didn't know what to do," Ms. Bredin admits.

Another issue facing Guru was that, on the business side, the company now had a division that cost money and wasn't making any yet. It stayed in the black thanks to programs such as the Ontario Film & Television Tax Credit, which offers tax incentives worth as much as 40 per cent of a company's labour costs in making a show, plus a development deal from Astral Media Inc.'s Family Channel in 2008, which funded a "bible" (a reference documents on a show's characters and settings) and some scripts.

Developing a show can cost tens to hundreds of thousands of dollars. Nerd Corps Entertainment Inc., an animation studio with 290 employees, invested $500,000 to develop Slugterra over five years, according to the company's president Ken Faier. "Animation technology is an expensive thing," Mr. Faier says.

Most of the cost goes to salaries for those who draw up storyboards, make 3D computer models of characters and put together animated short versions of the show. Freelance fees go out to writers to draw up scripts. Ambitious projects like Slugterra often launch with a merchandise line, too. Costs go up the longer it takes to develop a show.

Fortunately, Justin Time got off the ground relatively quickly. Family Channel bought the Canadian rights to the first season in spring 2009 and the show went into production in early 2010.

"We really like Guru. They're not too big and they're not too small. They really value the creative," says Michael Goldsmith, director of original programming for Astral, which owns Family Channel and Disney Junior.

Companies such as Astral make very little original content, preferring to buy the rights from independent animators, as these companies tend to produce better, more creative shows. Only a handful of the animators Astral works with have a business model the same as Guru's and Nerd Corps's.

"Everyone wants to do their own show. But not everyone can do it. I get a lot of pitches for things driven by merchandise," Mr. Goldsmith says.

Nerd Corps's Mr. Faier says only about 1 per cent of service studios ever succeed on the creative side. They need original ideas, solid financing and perfect execution. Once they get into original work, they need to carefully manage their paying service clients, who worry the company will steal their ideas or put less passion into their projects.

Then, the key to profitability is to leverage international rights and resell your show all over the world. Since Guru sold only the Canadian rights to the show to Astral, it's been able to sell Justin Time to the likes of Discovery Kids Latin American, YLE Finland, Hop! Channel Israel and PBS Kids Sprout and NBC Kids in the United States. (Season one aired on these U.S. stations starting last spring.)

Thanks to Guru's marketing efforts (including a picture book written by Mr. Scott, an iPhone app and online games) and its careful leveraging of various markets, the first season of the show has now paid for itself. Many channels have already signed on for season two, on which which Guru is just finishing production now.

But having the show finally air in Canada, where family, friends and local clients can see it, is what really drives home the success. Says Ms. Bredin, whose own family – including her son – can now watch the show on TV: "It's going to be the icing on the cake to get it going in Canada."

Special to The Globe and Mail

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