Cineplex’s distribution deal with Lionsgate sends ripples through the Canadian film industry

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A quiet and powerful tremor is sweeping through the Canadian film industry after the announcement of a new partnership between theatrical giant Cineplex and the Lionsgate studio.

On January 5, Lionsgate revealed that it was entering into a theatrical distribution deal with Cineplex Pictures, a division of Cineplex CGX-T, to bring the studio’s full slate of 11 films by 2023 to Canadian theaters, including Cineplex locations and those operated by competitors. . The deal kicks off with the premiere this weekend of Gerard Butler’s new thriller. Airplane and includes potential blockbusters like John Wick: Chapter 4 Y The Hunger Games: The Ballad of Songbirds and Snakes.

The arrangement evolved from a similar partnership announced in 2019 between Lionsgate, Cineplex and independent Canadian distributor Mongrel Media, in which the three companies worked together to theatrically release Lionsgate titles like the original. knives out movie. However, with Mongrel no longer part of the equation (a company spokesperson declined to answer questions about his lack of involvement in the new deal), Cineplex effectively becomes both exhibitor and distributor, a mix-up of the two. traditional industry practices make key players in Canadian cinema. the community says it could turn the business around.

In Canada, there are essentially two types of film distributors, who bear the P&A (or “prints and advertising”) costs of releasing a film. There are the satellite operations of the big five Hollywood studios (Disney, Warner Bros., Universal, Paramount, Sony), and then there are the independent ones, which acquire and distribute everything that the big ones don’t do, like Canadian cinema, indie US. foreign language films and productions.

With Cineplex taking a step up in the distribution game, independent distributors face a diversion of potential business. Then there’s the concern that Cineplex might have an incentive to prioritize Lionsgate titles over competitors’ fare within its theaters, such as giving those films better venues, more favorable hours and more marketing in the form of posters and trailers.

In a joint statement, members of the Canadian Association of Motion Picture Distributors and Exporters (CAFDE) said this new arrangement “will result in a less competitive theatrical environment with a smaller choice of consumer films overall and fewer Canadian films in particular, since self-negotiation has priority over the interest of the market”.

CAFDE, which counts among its members Elevation Pictures, VVS Films, LevelFilm, Photon Films, LaRue Entertainment and Vortex Media, added that “studio-exhibitor relationships were long prohibited in the United States until it was considered in the interest of the consumer allow it given the many players competing there. However, with a concentration of Canadian screens controlled by one company across the country, it is difficult to appreciate how fair market principles are promoted by allowing it here.”

Cineplex CEO Ellis Jacob, whose company operates 1,637 screens in 158 locations across the country, dismissed such concerns in an interview with The Globe and Mail.

“At the end of the day, we make sure that we are completely independent when it comes to the distribution of any film,” Jacob said. “We are not the dominant exhibitor, we are one of the main exhibitors, and from a general perspective, there is no impact on the viewer.”

However, Cineplex’s market share in the exhibition space is over 75 percent, giving it much more control over the landscape.

“This whole idea is not something new, we’ve been in the distribution business for a while,” Jacob said. “When I started over 30 years ago, we had Cineplex Odeon Films, where we distributed the output of some major studios. Even when Cineplex had 35 percent of the market and Famous Players 45 percent, we were distributing movies and taking care of everyone. It was not a situation where, because we were distributing, [another theatre] I got nothing from the product.”

Bill Walker, CEO of Landmark Cinemas, the second largest exhibitor in the country with 325 screens in 40 theaters in Ontario and Western Canada, said in a statement that “Landmark has three main requests from all movie distributors: access fair to content, reasonable movie terms/rental rates, and strategically marketing content in all regions We see the risk to our industry in Cineplex by operating on both sides of this equation, and are working closely with Lionsgate and Cineplex to ensure that we receive the same level of support that we would expect from any distributor.”

Meanwhile, Sonya William, director of the Independent Canadian Exhibitors Network, told The Globe that “independent cinemas across Canada face enormous hurdles, trying to rebuild their audiences and show the movies their communities will want to see. This decision makes Canada’s dominant movie theater chain the provider of its local independent cinema. Does that sound like a fair market?

When asked if the Lionsgate deal threatens to limit consumer choice, Jacob responded that “there is no impact on the moviegoer, and you can look at what we’ve done with Lionsgate products over the last few years and all the other movies we’ve distributed. as part of Cineplex Pictures. The thing is, there are movies that don’t have distribution in Canada and we want to make sure that our theaters have the product that our guests want to see.”

However, movies that Cineplex Pictures has distributed since operating under that banner starting in 2014: Niche fare including Icelandic horror film. Lamb (acquired from US team A24) and the shooter thriller Hotel Artemis (Global Road Entertainment) that might well have been bypassed by Canadian theaters had Cineplex not stepped in, are not on the same level as john wick either The Hunger Games sequels. Not to mention Lionsgate’s other 2023 titles, including the highly anticipated Judy Blume adaptation. Are you there God? it’s me, daisy starring Rachel McAdams, and new editions in the Expendable Supply Items Y He saw franchises

As for how Cineplex will ensure that the marketing of Lionsgate titles within its theaters is consistent with films from other distributors, Jacob said, “We are very focused on having a business of total integrity. I’m not saying we’re doing this and treating each other differently.” (Canadian representatives for the five major Hollywood studios declined to comment or did not respond to The Globe.)

Asked if Cineplex will bear the P&A costs of the Lionsgate titles, Jacob said any details of the deal should be directed to Lionsgate as it is a competitive situation. Studio representatives responded to Globe’s questions with a statement that said, in part, that “we are confident our films will rank well across the spectrum of Canadian theaters.”

And as to whether Cineplex could pursue other distribution partnerships if the Lionsgate deal is successful, Jacob said, “I think we have to see how we do it, how [Lionsgate] feel that we have done But one thing that we will definitely keep open is our ability to explore if there are titles that don’t make it to Canada, which is something that has always concerned me, because that hurts us.”

In the meantime, Canadian distributors will be closely watching how the situation unfolds.

“Overall, we have a healthy relationship with Cineplex, but at the same time they haven’t had significant direct distribution with a studio, so we’ll see what the future holds,” Harry Grivakis, a senior vice president at VVS Films, said in a statement. “I can understand the concerns within the industry.”

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