Canadian independent film and TV production and development spending fell 8% to $1.41 billion in 2007, down from $1.52 billion the previous year, according to Playback's 20th annual survey on independent production.

The modest setback reverses the trend that saw Canadian production activity rise modestly - by 2% in 2005, and then, more dramatically, by 21% in 2006 - after a downward trend that began in 2001, and bottomed out at $1.24 billion in 2004.

"Over the last couple of years we saw a real bounce-back in terms of volume of Canadian content production, so it is reasonable to expect that in 2007 the industry might not grow to the same extent," says CFTPA president and CEO Guy Mayson, in reference to the new numbers.

In 2007, the 8% dive in overall volume was the equivalent of approximately $120 million. Certainly the disappearance of Alliance Atlantis Communications is a contributing factor.

In 2006, AAC's production volume was $157 million, the majority of which was spent on its 50% stake in the three CSI drama series. In 2007, Alliance Atlantis Communications sold its interest in the CSI franchise to U.S. banking firm Goldman Sachs.

Playback's numbers are gathered from the calendar 2007 spending activity of 191 Canadian independent production companies that chose to respond to the survey. That number of respondents is typical (with the exception of last year, when 257 companies participated). For some of the major companies that did not submit figures, Playback has entered an estimate.

The CFTPA publishes its own annual study of the Canadian industry in its Profile reports, which include the participation of more companies. Its latest report, covering the time frame of April 1, 2006 to March 31, 2007, shows the volume of indigenous independent Canadian film and TV production at $2.39 billion, up 11% from the previous cycle.

Playback's survey, meanwhile, shows that, by genre, animated programming saw the most significant increase in activity in 2007, rising 19% to $276.1 million.

"It really is a boom time in Canada for kids animation," says Scott Dyer, EVP and GM of Corus Kids Television and Nelvana Studios. "Big American multinationals like Nickelodeon, Disney and Cartoon Network are launching in territories around the world, so there are many places to position kids animation. These 24/7 kids channels have a tremendous appetite for animation."

Children's live action posted an increase of 9% to $67.4 million. But based on the huge success of American shows such as Hannah Montana and Zoey 101, Decode Entertainment president Steven DeNure expects kids live action to grow even more in the coming year.

"Other networks are trying to emulate [those shows'] success, so there is certainly an increase in demand," says DeNure. "Even channels that program primarily animation are scrambling to develop shows to compete with these live-action successes."

Feature film volume saw a solid gain, with spending rising 18% to $241.1 million in 2007.