The NCN New Country Network debacle seems to be wrapping up but a new player has emerged to take the wind out of Canadian protectionist policies, this time those feeding the Canadian feature film distribution industry.

Adding fuel to the fire of the brewing Canada/u.s. trade war is the Canadian Motion Picture Distributors Association, which has filed letters to the Federal Court of Appeal and the crtc appealing the condition of licence for the new direct-to-home pay-per-view players that stipulates they buy broadcast rights for the Canadian market from Canadian distribution companies.

According to industry execs, money isn’t the issue. They say the cmpda is rallying against policy that reinforces a separate rights market for Canada, its ability to control its own territory, and sets a dangerous precedent for placing limits on the American entertainment machine.

Dan Johnson, president of the Canadian Association of Film Distributors and Exporters, is labeling the move another attempt by powerful u.s. motion picture lobbyist Jack Valenti ‘to seek to hammer flat Canadian initiatives designed to assure the survival of a viable Canadian distribution and production industry.’

In its Dec. 20 licensing decision, the commission imposed a condition of licence on the new dth ppv licensees, Home Theatre, Viewer’s Choice, and Canal Premiere in Quebec, that they purchase the rights for feature film product from Canadian distributors with the quid pro quo that the condition applies only to feature films for which the distributor holds non-proprietary rights. If the foreign distributor has paid more than 50% of the cost of production and/or owns worldwide rights to the product, it will continue selling to the ppv dth service providers.

The new dth ppv services aren’t yet in operation, so exactly what portion of their product will come via foreign distributors owning non-proprietary rights has yet to be established, and Millard Roth, president of the cmpda, refuses comment on the specifics of the appeal. But for Home Theatre, a ppv service provider, the amount of non-proprietary product purchased from foreign distributors is minimal.

‘It’s not very many. A handful through the year. Really this is a principle issue more than anything. It’s not about money,’ says Rick Davies, vp of programming for Allarcom Pay Television, the parent company for ppv channels including Home Theatre and Superchannel.

Stephen Greenberg, senior vp of the Astral Entertainment Group, agrees that the studios are picking up the non-proprietary rights to few films now, but says there’s no guarantee they’ll have an equally small library of them down the road.

‘I think the trend is edging towards more. A lot of companies are funding more from outside and a lot of European producers are keeping the rights so the number of pickups for the studio is increasing. It’s also happening more often that independent producers are foraging their own rights agreements,’ he says.

But the cmpda’s current appeal is more a question of positioning for the future than a concern with short-term revenues, says Greenberg.

‘Years down the road it’s difficult to assert how big the revenue from dth ppv is going to be. A real hefty ppv market may yield big revenues, and if you don’t protect your interests now, they will be lost in the future.’

Johnson acknowledges that the Canadian ppv market could grow with these new players, but says the bigger issue is the Canadian government taking a stand which limits American activity in rights sales and sets a precedent threatening its entertainment exports internationally.

‘Given the number of films to which this actually applies, it follows that they are appealing the decision because if they can’t do whatever they want in Canada, then they’re afraid they won’t be able to do whatever they want elsewhere. It’s a threat to their worldwide interests, their ability to dictate to every broadcasting system in the world.’

In tandem with the non-proprietary rights issue, the cmpda is also filing protest against another condition of dth ppv licence which dictates the split percentages of film-related revenues between the rights holder, distributor and service provider.

As per the licence, the rights holder gets one-third of the revenue from a ppv movie sale, enshrining a percentage which has long been the norm in the Canadian market, says Davies.

In the u.s., 45% goes to the cable company, 45% to the film rights holder, and 10% to the network, a financially viable split with an audience base of a couple of million. ‘But with a combined audience base of about 600,000 households, I don’t think either Home Theatre or Viewer’s Choice would be here with that kind of arrangement,’ says Davies.

The crtc is being criticized for getting involved in film distribution policy, but Johnson says the distribution and Cancon rules that have generated a thriving broadcasting industry must apply across the board.

‘If these foreign companies were to be allowed to grind us into the dust,’ says Johnson, ‘then the crtc would have let into the broadcasting world the same disgraceful practices that have hobbled the Canadian film industry.’

Adds Greenberg: ‘Obviously a distributor would like to have more customers rather than less, but you have to take into consideration the size and scope of the market that exists in Canada and factor everything in. As distributors trying to live in a universe governed by u.s. interests, it’s very tough.’

Speaking of hobbled, the cmpda filing is only a piece of the action on the dth front. The Friends of Canadian Broadcasting, actra and the Consumers Association of Canada are also appealing the dth decision, contesting the commission is disobeying a cabinet order to promote competition in the dth business after Power DirecTv and its chairman Joel Bell cited business-prohibitive policy decisions as the reason Power is exiting the Canadian market. Westman Media, which applied for a ppv licence in Manitoba, has also filed an appeal.

Missing target launch date after target launch date, ExpressVu president Ted Boyle has been replaced by Michael Neuman, president of bce’s WorldLinx Telecommunications.

ExpressVu has also dumped its public relations firm, Environics Communications, and industry insiders are speculating that more heads could roll as the company revamps its technical and business strategies. According to Neuman, ExpressVu expects to detail its new launch strategy within the next two to three weeks.