Montreal: According to Victor Loewy, theatrical distribution is a hardball business.

‘Production is a relatively easy business. Find money, a project, and you have a film. Distribution is much, much more difficult, because first of all you have to have access to the cinemas and that is a closed club for the time being. To have proper access to the cinemas, you have to have massive amounts of product to be able to play at Christmas and the peak summer period when the real money is made, says Loewy, president of Alliance Releasing and vice-chairman of Toronto-based parent Alliance Communications.

‘We have roughly 70 films a year, and as such, have become an indispensable partner to Cineplex Odeon. We need each other. And if you look at the u.s., not a single distribution company has succeeded on its own in the last 20 years, with the one exception of New Line.’

Releases at the top of Alliance’s ’96 summer slate include Pinocchio, Last Man Standing with Bruce Willis and Island of Doctor Moreau. Michael with John Travolta is skedded for the holidays, while David Cronenberg’s Crash will be released in Canada Oct. 4.

Crash has its world premiere this month in official competition at the Cannes Film Festival.

Current releases include Giuseppe Tornatore’s The Star Maker and Paul Mazursky’s black comedy Faithful.

A just-released statistical study by Alex Films, a theatrical distribution and exhibition consulting firm in Montreal, indicates Alliance Vivafilm had a 17% share of the Quebec box office in 1995, second only to Warner Bros. at 20%. Not only did Alliance’s market share top all the other Hollywood studios, it more than doubled the combined share of its Canadian competitors.

Alliance is a great Canadian success story that goes back to 1972 when college buddies Robert Lantos and Victor Loewy set up a company called Vivafilm, a distribution outfit with a fabulous future.

Today, 24 years later, the distribution division chalked up revenues of more than $58 million in ’95, up from $30.2 million in ’94.

The operation has had a spectacular 41% annual growth rate since 1990.

With equal product, Alliance has consistently outperformed the majors.

While the studios earn 7% to 8% on average of their domestic (u.s. and Canada) take in Canada, Loewy is pleased to point out Alliance’s take typically ranges from 12% to 14%.

‘Seven was the top-grossing film in Quebec last year, but in the u.s. it was nowhere near the top-grossing film, perhaps in the top 10 or 15,’ he says.

Alliance’s 53 theatrical releases grossed over $59 million in Canada last year. Home video sales were up $3.5 million to $20.4 million in ’94/95.

Total gross wholesale revenues in video (for calendar ’95) are $37 million, with more than 230,000 units sold in the rental market and well over one million units sold in sell-through.

Profits are indeed impressive.

Lantos, Alliance’s chairman and ceo, recently pointed out Pulp Fiction alone generated $2.5 million in profits.

This year, Loewy says Alliance’s distribution revenues will rise to more than $80 million. ‘We have the momentum, we have the product, and we have the cinemas.

‘We’ve worked very hard to achieve this,’ he says. ‘It’s a combination of product flowing from two American franchises, Miramax, and especially New Line Cinema, as well as films we acquired ourselves such as Il Postino, which is now in the $2 million (box office) range in Canada and is obviously a high-profit number.’

Alliance’s top theatrical performers nationally in ’95 include the suspense thriller Seven at over $12 million, the comedy action film Rumble in the Bronx, close to $4 million, Mortal Kombat at close to $7 million, and Don Juan De Marco at $2.8 million.

In video, the 1994 box office hit Pulp Fiction has sold 75,000 units in the retail home-video market and close to 200,000 in sell-through.

Recent tv catalog acquisitions – some 3,500 titles from Lumiere, Samuel Goldwyn and Argos – were purchased in anticipation of new specialty channel sales, and have also contributed to growth. According to Loewy, Alliance recouped its investment in the Lumiere and Goldwyn catalogs in less than a year.

In home video, Alliance sales have exploded.

‘Obviously as a result of the big titles from New Line, but also because of children’s and other product that has done extremely well in the sell-through market,’ says Loewy.

On the issue of a Canadian distribution licence for Dutch multinational Polygram NV and Turner Pictures, Loewy says: ‘Obviously we are not happy if more American companies try to establish themselves (in Canada), but our big beef, or dispute, is not so much with Turner (which is seeking a limited licence to distribute what was earlier mgm’s tv library) as it is with Polygram. This is a European-based company with a hell of a lot of money and very active in producing what are called ‘independent movies.’ And this is where we are all united against them getting a licence.

‘They have a production company in France and acquire world rights to other films in France, which they either distribute themselves or try to sell off. So this a dangerous situation, because for the first time we now have a company which is going directly into our segment.’

He says Polygram is known for its aggressive acquisition activity and is ‘effectively operating (in Canada) in some sort of semi-darkness.’

(Polygram has an active marketing department in Toronto, but the physical distribution of its films in Canada is handled by Cineplex Odeon Films.)

‘Obviously this is something that is worrying and will put many companies in difficulty.’

On Telefilm Canada’s Feature Film Distribution Fund, Loewy says Telefilm’s budget has been cut more than double other Canadian cultural agencies, including the cbc and nfb. He says the Canadian Association of Film Distributors and Exhibitors will fight on this point.

‘Without a Feature Film Fund,’ he says, ‘the distribution of Canadian feature films becomes impossible. Otherwise, Canadian films will play in one or two major cities and will not be promoted. The first challenge is to overcome the apathy of the Canadian public towards its own cinema, the lack of stars and the love story between the public and American cinema.’

The investment community is anxiously awaiting news on a renewed deal with New Line (Turner).

That agreement, which includes features from Fine Line and Turner Pictures, terminates at the end of 1996. Loewy says negotiations are in progress and should conclude soon.

As for Miramax Films (Walt Disney), the final film (The Pallbearer) in the first 50-film deal was released this month. Alliance announced a new 50-film or five-year agreement (whichever comes first) in February.

Upcoming and current Miramax titles under the new agreement include Jane Eyre, The English Patient, based on Michael Ondaatje’s award-winning novel, The Crow: City of Angels and Marvins’ Room starring Meryl Streep, Diane Keaton, Leonardo DiCaprio and Robert DeNiro.

Alliance has a reciprocal four-year deal for tv product with Australia’s Southern Star and an output agreement with the u.k.’s Film Four.

‘I can tell you that for the first and second deal with Miramax we had a lot of competition from various Canadian distributors who publicly claimed they had no interest in Miramax,’ says Loewy. ‘I think the second time around, Miramax had no desire to discuss this with anybody else.’

Alliance has also performed well with less costly, quality indie and foreign product such as Shallow Grave, Farinelli, The City of Lost Children and Bandit Queen. Homegrown titles of note include the ’95 Golden Reel winner Johnny Mnemonic, over $3 million at the box office, Atom Egoyan’s Exotica, Charles Biname’s Eldorado and Robert Lepage’s Le Confessionnal, $800,000 nationally.

With exhibitors Cineplex Odeon and Famous Players building new theaters across Canada, Loewy says the number of release prints for major features will top 250 in the future.

Loewy has commuted weekly to Toronto for the past 10 years and recently moved his family there.

Besides running Alliance Releasing he also runs (the theatrical part) of Alliance International.

‘This is the division we are hoping to grow the most over the next little while, so I have to spend more time on it.’

Alliance’s theatrical slate is managed by Tony Cianciotta, vp/gm in Toronto, and Pierre Brousseau, Alliance Vivafilm Quebec vp based in Montreal. Ancillary activity (tv and home video) is managed by Patrice Theroux, executive vp in Montreal. Mary-Pat Gleeson, vp marketing, Anna Maria Muccilli, vp publicity and promotion, and Ted East, vp, round out the division’s senior staff.