With its stock a fraction of its 2004 peak and the just-announced departure of CEO and visual effects (VFX) legend Warren Franklin, Vancouver-based Rainmaker Entertainment Inc. (TSX:RNK) is pinning its hopes on a new growth strategy.
"As opposed to being strictly feature film focused, we're saying we're a brand-building company," said president and executive producer Catherine Winder, company head following Franklin's departure last month.
Founded as a VFX company in 1996, Rainmaker bought animation service company Mainframe Entertainment in 2006. In 2008, the company sold two divisions – Rainmaker Visual Effects and Rainmaker Post – to Deluxe Entertainment Service Group to focus on computer-generated animation.
Behind that strategy was then-CEO Franklin, a VFX heavyweight who had previously overseen VFX production for groundbreaking films such as The Empire Strikes Back, E.T.: The Extra Terrestrial and Back to the Future (see "Deja View"– issue 973; June 17-23, 2008).
While company stock tanked in late 2008 and has remained low since, Franklin maintains that the strategy shift was the right move for the company.
"One of the things I'm really proud of is I was able to bring in someone to purchase the post and the VFX business and really capitalize that properly because it's a very competitive global business and as a small company we didn't really have the resources to back that properly," he said.
As to how well Rainmaker's animation focus has panned out, Franklin said it's taken longer than he hoped, but he's happy with what the company has achieved.
He pointed out that being successful in the computer graphics business requires a company to be able to produce its own content and compete with major studios in the U.S. and around the world.
"We've made huge strides in that direction. It just takes a long time. With Pixar, I think it took 15 years to make their first film. We're on track to do it in about nine."
Winder added that the 2008 economic downturn crushed many independent animation studios.
"If our stock may not look like it has done very well, the fact that the company has got its feature film going and is in a cash-positive position speaks very positively of the company right now."
Winder said in the last two years, Rainmaker has advanced its first feature film, Escape from Planet Earth, into the late stages of production and laid the groundwork for future feature films. She expects the company will get a key boost from the film?s release, which is planned for late 2012.
"It will reposition the company in many people's eyes in a whole different light. It's very high-calibre work that we're producing."
As to a US$50 million lawsuit involving Rainmaker filed in connection with film, she said, "We're indemnified by [film studio] the Weinsteins, and we feel very comfortable that we're OK with that situation. [The plaintiffs] are not suing us; we're just named."
Franklin said the timing was right for his departure.
"I put a strong management team in place now, and we've got our first feature film underway and we have a number of really strong original properties which was always the goal with the animation studio. So I felt like that was really in good shape."
Rainmaker's stock didn't react to Franklin's departure.
Franklin provided few details on what he plans to do next, except to say that he'll likely launch a new Vancouver-based venture.
"I'm kind of looking to work with a bigger platform really involving animation, visual effects, live action and working on looking at new forms of distribution that we're able to do through digital distribution and social media," he said. "I'm trying to figure out the best way to really create the next thing. I've always been out ahead of myself."•
