Apple’s iTunes Canada seemed to be the frontrunner in the race for Hollywood’s digital content, but in what could be a sign of the times, Bell Mobility recently signed short-term contracts with Disney and Sony that will allow subscribers to download movies such as Spider-Man and Pirates of the Caribbean: Dead Man’s Chest to handsets for a limited viewing time. The Internet movie distribution pipeline is still wide open in Canada. So what, you say?

It is perhaps the greatest single opportunity the Canadian feature film industry has ever seen in its young life.

As Canadians, we can’t rent or download-to-own from iTunes, BitTorrent, Xbox, Vongo, Google Video or Amazon – you name it. We’ve been geo-blocked from them all. Why? Does our pocketbook vote really matter that much? Well, not really. Is there a major holdup with digital rights holders’ issues? That’s not it, either.

The majors make a ridiculous amount of money from DVD at a margin of 80% to 90%. Roughly half of both revenues and profits come from this stream. And in Canada, as in the U.S., home video sales at Wal-Mart account for 40% of that bounty. Hence we haven’t seen iTunes Canada loaded up with movie content. It occupies the same sell-through window as DVD, and the Big 5 – Disney/ABC, Time Warner (Sony), Fox/Twentieth Century, NBC/Universal and CBS/Viacom/Paramount – would be playing with fire if they cut into their biggest client’s market share.

Every content producer and distributor in this country should be spitballing ways to secure online partners right now while the window is still open and Hollywood has opted not to climb through it into our digital living rooms. Better yet, distribs in this country should unite to create and brand an online portal exclusively for feature films made in Canada. Take the promotional and distribution strengths of YouTube and MySpace to create a Canadian feature film hub. Call it Our Pipe. (Or not).

You may not immediately see the connection to the mobile deal, but the logic gets clearer when examining VOD and user-generated content sites. Studios like the on-demand option because it reduces physical costs and retains high margins. Comcast and Time Warner Cable are currently doing VOD testing smack in the DVD window, and the majors have had a presence in Canadian VOD since 2003, when Rogers inked a deal with MGM.

Among all telephone and cable providers, the Canadian VOD market had revenues of $130 million in 2006. But industry estimates peg the growth of VOD upwards of $340 million by 2009, and apart from some lip service to Cancon in the original 1997 VOD Policy, the Rogers and Bells won’t be encumbered by the CRTC in the VOD space. Nor in the mobile environment, as per the February CRTC decision that effectively exempted Bell, Telus and Rogers from regulation of their mobile television services.

So not only are the big studios not focusing their energy on downloadable content in Canada at the moment, but the most appealing infatuation after VOD is You Tube. When Google acquired it, Viacom (CBS/Paramount) sued for copyright infringement. Rupert Murdoch then partnered with News Corp./MySpace so that he could have his very own youth market accessory to play with.

How long exactly do we have before Hollywood turns its Hydra head back north? Likely as long as it takes for the consolidation in the multimedia landscape to shake out and the majors to realize that user-generated content sites do not mean more revenue for Desperate Housewives downloads – not to mention that online advertising is a penny to a dollar of traditional TV.

But as a savvy industry consultant said to me recently, ‘TV is safe. But movie downloading is coming – because who wants to climb in their car on a night in February when you can click one button and watch a high-definition feature without leaving your couch?’

Canadian HDTV subscribers rose to 800,000 at the end of 2006 and will be at a projected 3.1 million in 2009. And we’re on the hockey stick as far as broadband fattening up to accommodate a true HD pipe. We need to find a way into the minds, headsets and digital living rooms of Canadians.

As a staunch nationalist who would like nothing more than a healthy feature film industry – not to mention a cinephile who yearns for my country to make great movies – I repeat the time is now. Google Canada and MSN are getting 18 million unique users every month, while AOL and Yahoo manage 15 million. That’s too many eyeballs in Canadian digital territory for Hollywood to ignore for very long.