A wave of consolidation is hitting Canada’s distribution industry, forcing the few players left to react quickly in the wake Alliance Releasing’s volume domination of the market.

Cancon-friendly Cineplex Odeon Films, with October deal in hand, is poised to be swallowed up by Alliance, which already devoured Norstar and its nearly 200-film library earlier this year and which appears to have secured the Live/Artisan output deal with the release of Suicide Kings.

Former Miramax and New Line exec James Sherry is now on the Alliance payroll as a distribution consultant and is expected to take over the general manager duties vacated when senior vp Tony Cianciotta left in September along with Mary Pat Gleeson, Anna Maria Mucilli and Dave Forget to set up Red Sky Entertainment in Vancouver. (At press time, Alliance had not responded to requests for an interview.)

The diminished voice of the shrinking number of Canuck theatrical distributors has prompted the Canadian Association of Film Distributors and Exporters to suggest in its Film Policy Review submission that more distributors should be eligible for Telefilm Canada money and may be behind cafde’s intention to add television distributors to its current seven-member association.

‘I’m not alarmed by consolidation, I’m in favor of it,’ says Andy Myers, senior vp and managing director of Behaviour’s Toronto operations. ‘I think we’re going to see a lot more of it in North America and Europe.’

But Cianciotta, president of emerging player Red Sky, says ‘generally speaking, [consolidation] is detrimental,’ but he makes the point that mergers can offer an opportunity for smaller companies to find a niche.

Pointing out that no Canadian distributor is in a position to compete with Alliance’s volume of product from output deals with Miramax and New Line/Fine Line, Lions Gate Films president Jeff Sackman is wary of the perception of Alliance’s position in the market.

‘Whatever the Canadian version of the anti-trust commission is, they should take a look at them,’ says Sackman.

With Lions Gate’s u.s. operation giving Sackman the unique position of being able to acquire North American rights and distribute on both sides of the border, he says Lions Gate should release approximately eight films in both Canada and the u.s. this year. One such release will be Paul Schraeder’s Affliction, for which Lions Gate has North American rights.

Lions Gate will release about 10 films just in Canada this year, including a fall release of Accent Entertainment’s Dog Park, with hopes for strong box office like the recent positive run with the u.k. film Mrs. Dalloway.

And while some distributors appear to be focusing on volume of activity and product flow with franchise deals, Sackman remains skeptical about output deals where significant guarantees are paid on a per-picture basis. He chooses to receive most of his films from Lions Gate’s production operations and through independent acquisitions.

‘Our focus on Canadian theatrical is that we’re trying to be profitable,’ he says.

‘ We’re not trying to be number one in visibility, only in true profitability.’

On the West Coast, Cianciotta’s upstart Red Sky has quickly emerged as a visible contender with its current release slate of 25 titles and aggressive pursuit of deals. Red Sky distributes Equinox product in English Canada and recently inked a non-exclusive PolyGram non-proprietary deal away from cof, while PolyGram handles Red Sky video releases.

Cianciotta says Red Sky should have 30 films in theaters over the next year, including five or six Canadian offerings like Heart and Soul from Vancouver’s PennyCandy Productions, Imagex’s The Divine Ryans, currently in production, and Big and Hairy from New City Productions in Vancouver.

Cianciotta is actively seeking more franchises and is currently negotiating with two American companies to increase Red Sky’s volume.

‘We want to have enough steady flow of product so that we’re in the marketplace on a consistent basis,’ says the former general manager of Alliance Releasing. ‘When we do get those Canadian films we can mix and match with our other films and have a strong position in the market. A steady flow keeps me in touch with the exhibitors.’

And Cianciotta sees lots of opportunities for Canadian distribcos to pick up indie u.s. fare.

‘Contrary to what’s happening here in Canada where everybody is consolidating, in the u.s. it’s the other way around, the smaller distributor has the opportunity to be in the marketplace,’ he says.

‘October is a much bigger player, Miramax is a much bigger player, and that gives the opportunity for somebody to look after the smaller independent films,’ says Cianciotta, who cites companies like Trimark, Strand and Stratosphere as examples. ‘These guys will also acquire things,’ points out the distribution veteran, ‘so since we don’t have an international division, maybe we can exchange the Canadian films with American films.’

At the enigmatic Behaviour, Myers says he expects to theatrically release at least 30 films this year through output deals with Sony Pictures Classics, Trimark, The Shooting Gallery and Republic Pictures, and through the acquisition of worldwide rights to at least six pictures this season. While some industry sources have suggested that the Trimark franchise is in play, Myers says a firm two-year contract has been signed with the u.s. indie.

At Sundance, Behaviour was able to acquire the worldwide foreign rights for Lisa Cholodenko’s High Art while October took North America.

Behind its recent merger with mdp and its flow of product from Filmline, Behaviour is also backing two new Canadian projects from Cite-Amerique by acquiring worldwide rights to director Curtis Wehrfritz’s $3.3-million feature debut Four Days and Canadian rights to Charles Biname’s La Beaute De Pandore, starring Pascale Bussieres.

Meanwhile, new cafde head Richard Paradis has been wooing the country’s major television distributors, Atlantis, Nelvana and Cinar, to join the distributors association, which has been gaining a stronger voice in the industry as of late. After forming alliances recently with the producers associations in English and French Canada, cafde is aiming to represent all distributors’ interests in industry discussions in the wake of an expanding international market.

‘The distributors, especially the television distributors, aren’t represented in public forums,’ says Paradis. ‘When I sit on the board of the ctcpf and try to make a point for distribution, I’ll get told by the producers that I don’t represent television distributions.

‘Our objective is to get just about every medium and large television distributor in our organization by the end of the year,’ says Paradis, who expects cafde’s $30,000 initiation fee will likely be lowered with more members. ‘We’re looking at approximately 10 companies.’

Paradis says cafde is also aiming to make politicians and public-sector decision makers more aware that distribution is a sector in itself.

Look for Red Sky to join cafde soon, and for the associations’ television expansion to be rolled out at Banff.