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A quietly powerful tremor is rippling through the Canadian film industry after the announcement of a new partnership between movie theatre giant Cineplex and studio Lionsgate.

On Jan. 5, Lionsgate revealed that it was entering into a theatrical distribution agreement with Cineplex Pictures, a division of Cineplex CGX-T, to bring the studio’s entire 2023 slate of 11 movies to Canadian cinemas, including Cineplex venues and those operated by competitors. The deal starts with this weekend’s release of the new Gerard Butler thriller Plane and includes such potential blockbusters as John Wick: Chapter 4 and The Hunger Games: The Ballad of Songbirds and Snakes.

The arrangement evolved from a similar partnership that was announced in 2019 between Lionsgate, Cineplex and the independent Canadian distributor Mongrel Media, which saw the three companies work together to theatrically release such Lionsgate titles as the original Knives Out film. Yet with Mongrel no longer part of the equation – a spokesperson for the company declined to answer questions about their lack of involvement in the new deal – Cineplex effectively becomes both exhibitor and distributor, a blurring of traditional industry practices that key players in the Canadian film community say could upend the business.

In Canada, there are essentially two kinds of film distributors, which take on the P&A (or “prints and advertising”) expenses of releasing a movie. There are the satellite operations of the big five Hollywood studios (Disney, Warner Bros., Universal, Paramount, Sony), and then there are the independents, which acquire and distribute everything that the majors do not, such as Canadian cinema, American indie films and foreign-language productions.

With Cineplex taking a larger step into the distribution game, independent distributors face a siphoning of potential business. Then there is the concern that Cineplex could have the incentive to prioritize Lionsgate titles over competitors’ fare inside its theatres, such as giving those films better venues, more favourable showtimes and increased marketing in the form of poster displays and trailers.

In a joint statement, members of the Canadian Association of Film Distributors and Exporters (CAFDE) said that this new arrangement “will result in a less competitive theatrical environment with reduced consumer movie choice overall and fewer Canadian films in particular, as self-dealing will take precedence over market interest.”

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

Cineplex’s chief executive Ellis Jacob, whose company operates 1,637 screens in 158 venues 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 films,” Jacob said. “We’re not the dominant exhibitor, we’re one of the leading exhibitors, and from an overall perspective there’s no impact on the moviegoer.”

Yet Cineplex’s market share in the exhibition space is upward of 75 per cent, giving it that 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 some major studios’ product. Even when Cineplex had 35 per cent of the market and Famous Players had 45 per cent, we distributed movies and we took care of everybody. It wasn’t a situation where, because we were distributing, [another theatre] didn’t get any of the product.”

Bill Walker, chief executive of Landmark Cinemas – the country’s second-largest exhibitor, with 325 screens across 40 theatres in Ontario and Western Canada – said in a statement that “Landmark has three primary requests of all film distributors: fair access to content, reasonable film terms/rental rates, and strategically marketing the content across all regions. We see the risk to our industry in Cineplex 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 we would expect from any distributor.”

Meanwhile, Sonya William, director of the Network of Independent Canadian Exhibitors, told The Globe, that “indie cinemas across Canada are facing enormous hurdles, trying to rebuild their audiences and show the movies their communities will want to see. This decision turns Canada’s dominant cinema chain into the supplier for your local indie cinema. Does that sound like a fair marketplace?”

Asked whether the Lionsgate deal threatens to limit consumer choice, Jacob responded that “there’s no impact on the moviegoer, and you can look at what we did with the Lionsgate products over the last number of years and all the other movies that we distribute as part of Cineplex Pictures. What’s happening is that there are movies that don’t have distribution in Canada, and we want to make sure that our theatres have the product that our guests want to see.”

Yet films that Cineplex Pictures has distributed since operating under that banner starting in 2014 – niche fare including the Icelandic horror movie Lamb (acquired from U.S. outfit A24) and the shoot-’em-up thriller Hotel Artemis (Global Road Entertainment) that may have very well bypassed Canadian theatres had Cineplex not stepped in – are not on the same level as the John Wick or Hunger Games sequels. Not to mention Lionsgate’s other 2023 titles, including the eagerly anticipated adaptation of Judy Blume’s Are You There God? It’s Me, Margaret starring Rachel McAdams, and new editions in the Expendables and Saw franchises.

As to how Cineplex will ensure that the marketing of Lionsgate titles inside its theatres will be commensurate with other distributors’ films, Jacob said that “we are very focused on having a business of total integrity. I’m not saying we’re doing this and we’ll treat others differently.” (Canadian representatives for the five major Hollywood studios either declined to comment or did not respond to The Globe.)

Asked if Cineplex is taking on the P&A costs of the Lionsgate titles, Jacob said that any details of the deal should be directed to Lionsgate, as it is a competitive situation. Representatives for the studio responded to Globe questions with a statement reading, in part, that “we’re confident that our films will be well positioned across the full spectrum of Canadian theatres.”

And as to whether Cineplex might pursue other distribution partnerships if the Lionsgate arrangement proves successful, Jacob said that, “I think we have to see how we do, how [Lionsgate] feels we’ve 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 I’ve always been concerned about, because that hurts us.”

Meanwhile, Canadian distributors will carefully watch how the situation unfolds.

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