In the heart of the Atlantic Ocean, the Canary Islands is rapidly becoming a global animation force.  

“Tara Duncan,” has charmed audiences via the Disney Channel, “Arcane,” which also uses a Canary Islands service studio, is one of the biggest shows on the planet, and the merchandise of “Miraculous Ladybug,” is seen everywhere. 

All three hits share a common thread: the unmissable imprint of talent from this dynamic archipelago. 

What began with a small community of digital artists and small studios has now burgeoned into an entire ecosystem of homegrown and international talent making some of the biggest and most innovative projects in the world, either as service studios or true-blue producers.

The Canary Islands Special Zone (ZEC) has done its part in fostering this creative surge. With its enticing 4% corporate tax rate — one of the lowest in Europe — it’s like an economic pied piper, leading international animation studios and producers down the path to the Canaries. This package of economic benefits has been not only preserved, but also enhanced over the years — a testament to a continued governmental resolve to fan the flames of this sector. 

And fan they have. “We have seen an enormous increase in interest,” Pablo Hernandez, president of ZEC, told Variety. “In 2016 there were two studios in the Canary Islands with 29 employees, today we have 12 [animation] Studios and over 800 employees involved directly with the industry.” 

Promoting animation with one voice alongside ZEC are the Government of the Canary Islands through the cultural (ICDC) and economic departments (PROEXCA), as well as island councils. Together they form a platform known as Canary Islands Animation. 

The fiscal advantages they promote in addition to no taxation on interest, dividends, or capital gains have managed to lure studios to establish operations in the Canaries. 

One of the first studios to open on the islands was 3Doubles. “We started with 22 people in 2017 and six years later, we are more than 120.” said Dario Sanchez, CEO of 3Doubles. They have built up a strong reputation servicing projects across the world. “We have been working with Canada, Australia, Germany, France, U.K. and Italy, so I feel we are well known.” Their first feature film, “Superklaus,” co-produced with Smartrek, Capitán Araña and Groupe PVP, has sold in 40 territories with a Spanish release scheduled for December. And they have a slew of other features in production with “Norbert,” “200% Wolf,” and “Giants of La Mancha.”

Atlantis Animation was well-established in France, having been there for 15 years prior to relocating to the island of Tenerife in 2019.  

Raul Carbo, CEO of Atlantis, told Variety: “Coming here was a case of going to the next level by producing a series and seeing if this tax shelter is a real thing.” The experience proved positive. “It’s not only about the incentives. It’s also about the quality of life, living in Spain, which is special because right now in Europe, a lot of interesting things are happening in animation in Spain.” He added: “It’s an important step to change country, come to an island, change friends, change climate, change everything. So it’s kind of an adventure.” “Tara Duncan,” which Atalntis worked on as a service studio, was made on the island and sold to Disney. It’s seen as a key example to prove what can happen here. 

Production Hike

The proof of growth is in the numbers. Year after year, the Canary Islands have seen an upward trajectory on the volume of animation productions. 2022 saw 46 series and 2 features in production or freshly completed. The year witnessed an infusion of approximately €30 million ($32.4 million) into the sector, underscoring the vitality and economic significance of this growing industry.
Perhaps the biggest project to date is Fortiche smash “Arcane.” Streamed on Netflix, it quickly became one of the platform’s most successful shows, hitting No.1 in over 52 countries and winning both an Animated Emmy and nine Annie Awards. Season Two is in production involving three Fortiche studios – in Paris, Montpellier and Las Palmas – and a 350 strong team, “We are making our best to address specificities of each studio but also keep a global Fortiche spirit across teams.” said Amelie Houpline, studio manager at the Las Palmas studio.

Growing Talent

The global nature of such a production raises the question and challenge of talent both foreign and domestic.  “Local talent needs training in order to develop optimally. This is a key issue for the good development of the sector in the Canary Islands.”, said Houplin. She continued, “The animation industry is demanding, it is a very important challenge to promote training that meets the needs. The Canary Islands is an ideal place for foreign students to come and study, but also an industry that the youth of the Canary Islands will get to know more and more.” 

The challenge of training is being tackled head on. Schools like CIFP Cesar Manrique and CIFP Felo Monzón, Escuela de Arte de Gran Canaria, and Escuela de Arte Fernando Estévez are providing courses in relevant disciplines. Additionally, the universities such as the University of La Laguna and the University of Las Palmas de Gran Canaria have modest programs devoted to animation or VFX. 

The islands councils also offer professional training short programs, which are highly valued by the studios. CIFP César Manrique runs a professional education program, where students spend 30% to 50% of their time in an industry setting, and the remainder of their time in the classroom. “What we have found is that this approach gives students a comprehensive perspective on the industry, enabling them to seamlessly integrate into the business.” Eliseo Martin, coordinator of animation and video game programs at César Manrique, told Variety. The studios partnerships with the schools will be key to help tailor the educational curriculum to meet the ever evolving industry needs and get the word out to local talent that this is a viable career path. Carbo of Atlantis put well the message young people on the islands need to hear: “You can live on the Canary Islands, do a fun job, an interesting job, and earn money working on world class projects.” 

Dan Creteur, director of “Tara Duncan,” is an example of top foreign talent who did make the move. He saw the advantages that can come from being outside the main global hubs. 

“The decision of going to the Canary Islands was to get a bit out of the system, and not be conventional, and not follow the steps of a classical production or classical projects.” Encouraging more people like Creteur to make the move should become easier as more well known projects continue to be made in the Canaries. Atlantis have moved on to service a new project, recently announced in Variety, involving soccer superstar Lionel Messi, and produced by Sony Music Entertainment. 

Hernández of ZEC, acknowledges the previous impacts of brain drain on the Islands, but expresses optimism about the prospects for creative individuals on the islands. “There is potential now for young people [from the islands] to develop artistic skills and join a vibrant job market in this new trend of digital VFX and animation,” he said.

The Allure of IP

Servicing projects created elsewhere makes up the bulk of the various studios’ output. However, the lucrative security that comes with developing successful  IP from the islands is clear. “In the beginning, studios formed here were mostly service studios. We already have interesting IPs managed from here, such as Pocoyó, but we are all looking forward to more global IPs born here. Studios are, more and more, doing their own IPS, small IPs for the moment, but they expect at some point their own ‘Peppa Pig’ is coming,” said Hernández.

Beyond Financials

There is a sense that the islands are at an inflection point crossing over from being a good place to do animation because of the incentives to being a good place to do animation full stop. An example of this is reaching up from the depths of the Atlantic Ocean, namely, cables capable providing world class internet speeds. Being fully integrated with the digital infrastructure of mainland Spain, the islands boast a fibre-optic network and high-speed broadband service, giving the necessary backbone for any animation endeavor. This competitive advantage allows studios to operate at full capacity, collaborate seamlessly, and stay connected with global counterparts. 

However, the journey is not without headwinds. The international market for production incentives can become a geopolitical zero-sum game, with various regions vying for dominance. 

Dario Sánchez, CEO of 3Doubles, spoke of challenges related to finding good housing for his team. They compete within tourist areas that have large numbers of Airbnbs. Office real estate is also a potential challenge that lies ahead. 

In such a landscape, the Canary Islands Animation platform is striving to stay a generation ahead, leveraging their unique combination of assets. The studios and Canary Islands Animation are clearly building a collegiate atmosphere and encouraging cross pollination of talent between studios. There is no whiff of competition between them, only an invigorating confidence in the future and a mutual excitement in witnessing how each studio’s triumph will serve to magnify the others’.

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