It’s a script Canadian filmmakers are only too familiar with. They spend years making a low-budget film. They get good-to-great responses on the festival circuit. And then comes the anti-climax: the film’s theatrical release, which is invariably met with little fanfare, an occasional ‘drive-by review’ – in which a Canadian critic lambastes the entire Canadian film milieu on the basis of this one feature – and the movie closes after a maximum of two weeks.

That was the scenario facing the makers of These Girls, John Hazlett’s 2005 sex comedy (made for just under $2 million) that picked up some great notices at the Toronto International Film Festival, and then was released through Seville Pictures only to fizzle at the box office. In its opening week, it took in under $20,000 on 21 screens and disappeared soon thereafter.

But a funny thing happened on the way to obscurity: These Girls found an enthusiastic audience on DVD.

‘We all know the story with Canadian films,’ says Andrew Noble, the film’s coproducer. ‘We have this tiny market spread out over a huge territory.’

Noting that Quebec is its own special case – a distinct culture and enthusiastic public support for local films has helped the province build up its industry in the past decade – Noble says the rest of Canada remains a tough place to sell a movie – that is, until the DVD release.

‘When the theatrical [release] happened for These Girls, no one knew it was opening,’ Noble recalls. ‘That market – where you’re competing with all of these American films that have Entertainment Tonight and Access Hollywood behind them – is very difficult to penetrate.’

But, he adds, ‘the DVD market is much more open. When we came out on DVD, suddenly we were in several thousand stores across Canada. Canadian distributors of DVDs are often working with larger U.S. distributors: Alliance Atlantis works with Universal, and Seville works with Warner.’

In the case of These Girls, Seville’s title was released along with Warner’s other releases of that week.

‘Having the Canadian distributor piggyback with the larger American distributor makes good sense,’ says Noble. ‘It allows the smaller distributor to reduce costs while increasing their market power.’

This means that in major DVD rental outlets – from Blockbusters to mom-and-pop operations – small Canadian films have the placement their creators have so longed for in the cinemas: a spot right beside big-budget Hollywood fare.

These Girls has the benefit of a supporting performance by U.S. actor David Boreanaz, who, due to his work on the TV series Buffy the Vampire Slayer, had a built-in cult following.

‘When the film came out on DVD, fans were talking about it online, which created a new buzz around it,’ says Noble. ‘Three months after the film came out in cinemas, no one had heard of it nor seen it. But when it was on DVD, people were coming up to us and saying they’d seen it and commented on how much they’d liked it.’

Although Canadian distributors rarely release DVD sales numbers, Seville Pictures president John Hamilton maintains that the DVD release well outperformed the theatrical release.

South of the border, Hollywood has adapted to the new reality for some time: that a DVD release can be as lucrative – if not several times more lucrative – than a theatrical release.

The average time between the two platform launches has been shrinking, and studios have now begun doing press junkets strictly for DVD releases.

According to consultant Howard Lichtman of the Lightning Group, the average window between theatrical and home video has shrunk from five months and 16 days in 2000 to four months and eight days in 2006.

In a further sign that ancillary markets are no longer so ancillary, director Steven Soderbergh released his 2005 feature Bubble in theaters and on cable simultaneously, and on DVD just three days later.

But for Canadian filmmakers who have faced an uphill battle at cinemas, the potential of DVD is relatively more significant. Noah Segal, SVP of home entertainment at Alliance Atlantis, characterizes DVD sales as the ‘saving grace’ for many releases. Although AA does not make its DVD sales numbers public, Segal points to examples of DVD’s power to find an audience.

‘Trailer Park Boys The Movie did well theatrically [$3.7 million], but on DVD, it hit a home run,’ he says of the feature inspired by the popular Showcase series. The home video release landed the foul-mouthed trio at number two on the Nielsen VideoScan sales chart back in February.

Segal also cites the doc Metal: A Headbanger’s Journey, which he executive produced. ‘On DVD, it did unbelievably well. People were lining up at HMV to get their DVDs signed.’

And yet, Noble points out, Telefilm Canada’s system of financing still rewards distributors for their theatrical releases of films, with less emphasis on home video.

Douglas Chow, deputy director of strategic communications for Telefilm, acknowledges that there is currently no financing specifically for DVD releases, but rather ‘that would be part of the film’s overall marketing plan. Our main mandate is theatrical release, but there is also support for ancillary releasing, and under that falls DVD releases.’

Chow concedes that DVDs have proven a massive force in the overall movie marketplace, but says Telefilm ‘has no plans to change its policy at the moment.’

But by the time it does, the public funder might be facing another entirely different landscape. Segal notes that overall sales for DVD have flattened in the past year or so in the interactive world.

‘Now people have TiVos, they have the Internet… That means it’s harder for those distributing to control the supply chain,’ he says.

It’s all part of a future predicted by the likes of Microsoft’s Bill Gates, who believes that in a few years everyone will simply be ordering movies online, rather than bothering with rentals or purchases, even with the rise of the superior quality HD-DVD and Blu-Ray formats.

On the other hand, Lichtman says, home video shouldn’t be written off any time soon. The industry was taken aback by the initial sales boom for the format, and consumers are still drawn to them, he says. According to his figures, DVD sales and rentals have been up 2.5% since 2005. That’s not much of a jump, but given the massive growth DVD sales had shown in previous years, he says a slowdown was inevitable.

Lichtman also points to several Hollywood films that earned far more on DVD than theatrically, including Napoleon Dynamite (US$140 million vs. US$45 million in North America), The Notebook (US$168 million vs. US$81 million) and David Cronenberg’s A History of Violence (US$50 million vs. US$32 million).

But as the DVD market continues to become more crowded, Canadian features will face the same challenges many Hollywood films do. ‘Plenty of films,’ he says, ‘just don’t catch on with an audience, in Canada or the U.S.’