########################################
#Written by David Tam, 1996.           #
#davidkftam@netscape.net Copyright 1999#
########################################

David Tam
Wednesday, November 13, 1996.

                             Business Press Review
                             =====================

McFarland, Janet. "Nelvana gets back to business". The Globe and Mail.
Friday, November 8, 1996. B9.                      ------------------

    Nelvana Ltd. is getting back to business after being distracted by a
potential buyout from US book publisher Golden Books Family Entertainment Inc.
This deal was estimated to be worth $140-million.  Now, Nelvana is no longer
activity seeking a buyer.  Instead, they will return their focus on building
the core business of the company.

    Nelvana is the world's largest independent animation company without being
owned by a film studio or television network.  Company revenue last year was
$56.5-million.  Originally, Nelvana was seeking a partner because of the
potential benefits of vertical integration in the children's animation market.
Many in the company believed such a partnership would have been very beneficial.

    However, Nelvana has several other plans that would allow for expansion
within their specialized market segment.  Despite the failure the recent deal,
the future for Nelvana looks very bright as worldwide demand for animation
continues grow rapidly.  For instance, specialty channels of all types are
appearing everywhere.  In Canada, Nelvana is part of a five-member consortium
that plans to launch a specialty cartoon channel called Teletoon next year.
This will provide another avenue for Nelvana to display its programming,
offering more exposure to the company's animation strengths.

    Benefits of export, as discussed in our lectures, have been realized by
Nelvana.   International growth of the company will continue.  Recently, they
have added salespeople in the Latin America and Asian markets.  They have
realized the growing markets in these other parts of the world.  The European
market currently accounts for a quarter of Nelvana's revenue.

    However, competition has arrived from Disney, who plans to set up studios
in Canada to tap our world-renown pool of talent.  Such a large competitor
posses threat to Nelvana's future.  They have already lost about a dozen
employees to the still-forming Disney studio.

    I believe the key to success for Nelvana will be its focus on quality
children's animation programming, and it's globalization strategy of tapping
growing markets in other parts of the world.   Partnerships with other
companies that deal with the children's market is also important to the success
of Nelvana.  Partnerships can offer a great alternative to buyouts. Both
parties receive greater benefits from each other, while allowing for
independent ownership.