Given the recent doom and gloom amid ongoing government cuts to the Canadian film and tv industry, it is unusual to hear someone say they believe something good may come of it all.

The voice is Robert Lantos, ceo and chairman of Canada’s largest film and tv distribution and production corporation, Alliance Communications.

Lantos, who has been in the business 20-odd years, is more than aware his company has been the recipient of a substantial – and, some would say, essential – boost from government agencies, and is still receiving significant contributions.

He is careful to clarify that it’s not a matter of welcoming recent moves such as the freeze to the Ontario Film Development Corporation and the Ontario Film Investment Program, it’s just that he is neither surprised nor frightened.

‘What’s going on is not desirable, but the handwriting has been on the wall for a long time,’ Lantos says.

In a new funding environment, he sees some potentially positive modifications, especially to the feature film business.

‘Movies that have a raison d’etre – a market – don’t have to be mainstream,’ he says.

‘There are Canadian directors that have developed a cachet in boutique circles around the world, which allows them to find a market.’

What may suffer are the movies that are neither commercial mainstream nor festival gems.

‘Those kinds of movies will begin to disappear or not be made,’ Lantos says. ‘And, frankly, I think that’s a healthy development.’

So what’s the prognosis for someone making a movie for the first time?

Lantos says they should make them on a low enough budget that they can be supported by Canadian financing and distribution.

‘Talent will still get its shot, but if that first shot doesn’t work, (that filmmaker) is unlikely to get a second one, whereas, in the past, with abundant government funds, it was possible to fail and keep on going,’ he says.

‘First films on low budgets is a good thing.’

The recent crop (Blood & Donuts, Rude, House) from the Canadian Film Centre’s Feature Film Project – made for about $700,000 each – is an example.

Outside the ffp, there are more: I Love a Man in Uniform cost $1 million, Double Happiness cost $500,000, Eldorado cost $1 million, and the list goes on.

‘It’s possible to make films at those budgets, and make them well, it just limits the kinds of subjects that can be tackled, and that, too, is a healthy thing for first-time filmmakers,’ Lantos says.

‘Once a director is proven, then we can pre-sell the next project and invest more in it,’ he says. ‘That’s how it works all over the world. We are very good in Canada at making low-budget movies. Those are our roots.’

Hurt cultural

Lantos says the damage is going to hit culturally-driven television material more than anything.

He foresees a ‘big crunch’ on these projects because they are ‘essentially impossible to pre-sell internationally and must be financed 100% in Canada.’

He predicts these series – such as North of 60 – will diminish, but not disappear.

Nonetheless, the situation is not drastic.

Citing a number of government incentives ranging from Telefilm Canada to the new tax credit, Lantos says Canada ‘still has a very substantive web of government incentives and support.

‘Even in their decline, they represent a considerable pool of funds, and we have to count our blessings for that because they do give us an edge over companies in the United States.’

Lantos says it is an edge, but not a strategy.

‘Canadian incentives are not a business strategy.

‘They are a benefit that we have successfully leveraged internationally in dealing with companies much larger than ourselves – the ones which are Hollywood-based – which have no access to these incentives, and which is the point of these incentives in the first place.’

Lantos looks at government incentives as a worldwide phenomenon, and, in some countries, they are on the rise. (Ireland has a new tax shelter and England is about to bring in a new incentive system.).

Alliance has been the beneficiary of substantial incentives from France, Australia, the u.k., Germany, New Zealand and other territories, and Lantos declares ‘all of Europe’ fertile ground from which he has reaped the benefits of coproduction treaty quotas.

He says it is essential ‘to be able to reinvent where and how we produce our projects in accordance with where the most favorable economic climate is on any given day.

‘And we in Canada are generally better at doing that than anyone else in the world because we were born doing it.’

Lantos says that were it not for international coproductions, Alliance would not have come into being, mostly because of the diminutive proportions of Canada’s domestic market.

Lower revenues

‘Canadian revenues from Canadian film and tv are far lower in terms of percentage of the budget than they are in any country with an industry.

‘So for us to be successful, we must avail ourselves of the added values that are available elsewhere in the world.’

It doesn’t hurt that lately so many international markets, including Latin America, the Far East, South Korea, the Pacific Rim, Germany and the u.k. are on the rise.

Even with incentives elsewhere on the increase and Canadian incentives on the decline, Lantos is staying put.

However, he anticipates most of Alliance’s growth in production and distribution (but not necessarily broadcasting) to be outside of Canada, and primarily in the u.s.

The number of staff at the Los Angeles office has quintupled in the past two years to 40, ‘generating a significant portion of the company’s earnings.’

The bottom line for Alliance is to create a company as self-supporting as possible.

‘The purpose of forming Alliance…was to build a company with bulk and financial muscle, which is what it has become: a content provider in all media of fiction production,’ Lantos says.

The end result is a corporation that now makes distribution, production, merchandising, music publishing and new media development its business.

Key developments

As Lantos lists them, key developments in expanding Alliance were: strength in Europe to do co-productions; knowledge of the American market ‘to take full advantage of the unique opportunity Canadians have by virtue of our linguistic and geographic proximity and shared mass culture;’ the ability to distribute, finance and produce without the middle men ‘who charge exorbitant fees.’

In addition to Alliance Equicap, the company’s securities dealer and packager of financing structures, those are the basic elements.

Lantos says it’s time to move on to a new level and change the company from a content provider to what he calls ‘a media company.’

That’s why he was so intent on buying Labatt Communications Inc., owner of tsn, the Discovery Channel, rds, Dome Productions and The Rep Shoppe/Medias Ventes. (Since, lic has since been bought by a consortium led by lci ceo Gordon Craig.)

What happened?

‘We were outbid,’ Lantos says. ‘Simple. By a group that had better information and were (better) able to value the company…but we went as high as we possibly could.’

Is Lantos interested should a similar opportunity come up?

‘Absolutely,’ he says. ‘It’s nothing I can talk about, but there will be opportunities in Canada and abroad.

‘We are competing against giant companies – Hughes and Time Warner, Disney, mca – all media companies which are themselves content providers.

‘Today, all of the various aspects of the audio-visual industry, which were clearly separated in the past, have converged.

‘Strength in the future relies in being on both sides of the content/ exhibit equation, which dovetails with our underlying philosophy of being self-sufficient.’

The company’s broadcasting interests in Showcase and Budapest TV3 are just the tip of the iceberg in Lantos’ vision of controlling delivery of his company’s product in the future.

‘We will not just be a seller of programming, but a direct conduit to the consumer,’ he says.

Plans are not to aim for a wide stretch of the broadcasting universe, but for ‘strategically selected spots where there is a direct fit with our content and where we can increase our reach and market share.’

Word is out that Alliance and Turner Broadcasting have been talking for some time about a possible partnership. On the subject of the company’s longstanding relationship with Cineplex Odeon, Lantos says:

‘We are contemplating other strategic partnerships of that sort in other areas. Some of them have been discussed in the press, but we’re not ready to make any announcements.’

With all of this acitivity under way, who would guess there are some troubling storms brewing on the film and tv horizon?

‘Keep your eye on the big picture’ seems to be the motto of Alliance.

‘Our thrust is to increase our market share throughout the world,’ Lantos says. ‘That’s what drives everything we do.’

Looking down the road, Lantos predicts the impact of satellite and new delivery systems will change the face of the Canadian film and tv industry.

‘The delivery systems for content are continuing to mutiply, and as the satellite business acquires mass penetration levels, that will, in turn, create a tremendous new thirst for programing and thus opportunities for Canadian producers globally.

‘The difference between past and future is, in the past, there was an artificial need for Canadian programming in the generic sense, and it mattered less whether the programming itself appealed to large audiences or not.

‘It’s going to matter a great deal in the future, as it does everywhere else in the world.’