Theatrical distribution in Canada has long been plagued by problems of American domination. It’s not just the universal story in which American product hogs a huge percentage of available screen time, Canada has been sold off for years as a piece of the North American market. And with no legislative protection for our own territories, it’s been a tough struggle for Canadian distributors.

In the face of all this, Malofilm Distribution of Montreal and Toronto-based Alliance Releasing have climbed to the top of Canada’s film distribution sector.

The parent companies of both distributors went public in 1993 – Malofilm Communications in December and Alliance Communications in June – and in 1994 they posted record results.

Overall revenues for Malofilm Communications – which includes a major production arm, Malofilm Production – were up 63% over the previous year to $31 million in ’94.

The sell-through market tripled for Malofilm Distribution, amounting to $4.3 million in sales, and home video moved up to $17 million. Theatrically, Malofilm had a healthy year, pulling in $1.5 million in earnings.

Signing an exclusive deal to distribute Samuel Goldwyn product in Canada was a coup for the company. ceo Rene Malo says being a public company helped cement the Goldwyn deal. ‘We had to give a big cash guarantee to Goldwyn, so the fact that we are public helped us to be able to give that guarantee, although we have made that kind of deal before without being a public company.’

At Alliance, box office receipts for 1994 releases came in at $50.975 million, leading with The Mask at $15.8 million and Pulp Fiction at $9 million (and counting). Pulp Fiction came to Alliance for Canadian distribution through an exclusive deal signed in 1994 with Miramax Films.

Tony Cianciotta, vice-president of Alliance Releasing, says, ‘Going public has made absolutely no difference except the acquiring of Miramax titles, which brought an influx of films, the major one being Pulp Fiction.’ But Cianciotta maintains that deal was going to happen anyway. It’s a ‘pay-as-you-play’ deal, he says, so there was no need for a sizable cash injection up-front.

Fighting the good fight on the distribution front has relied on a solid reputation, and reputation is built on knowing where and how to place a film.

Canadian films – with their traditionally low budgets and limited commercial appeal – can be especially difficult to place in the theaters, says Malo.

‘When you come into the theaters you compete with the big American pictures that have budgets of between $25 million and $50 million, with $10 million to $15 million for (promotion and advertising in) North America. To come in with a small Canadian picture with a budget of $2 million to $3 million, you need to have a genius writer, director and producer, and it’s very tough to find the three of them at the same time for the same movie.’

Both Alliance and Malofilm had outstanding successes with Canadian movies last year: Alliance has pulled in more than $875,000 across Canada with the $2 million Exotica, while the Malofilm release, Louis 19, le roi des ondes (Louis 19, King of the Airwaves) broke Canadian box office records for the past two years with $1.75 million in Quebec alone.

Alliance’s promotion and placement investment in releasing Whale Music was the same as Exotica, but there the risk failed. Whale Music only managed $70,000 and closed after a short run.

There is four times more money in the video business as the theatrical business, says Malo. With the added consideration that releasing a picture in the theaters costs between $200,000 and $500,000, Malo believes 90% of the feature titles are not suitable for theatrical release.

‘I think that we have to change the way we are making movies here.’

Many of the pictures made here should be made for budgets of $1 million, says Malo, because that’s the maximum you can bring back from exploitation of those titles. Movies made for $2 million to $3 million should be aimed at the television and video markets and between five and 10 big pictures (over $10 million) should be made for theatrical release.

Highlander, a Canada/u.k./ France coproduction made for $13 million and being distributed by Malofilm, did $625,000 in its first week in Canada and $5.6 million in its first week in the u.s. Malo estimates the movie will do $20 million to $25 million in box office in the u.s. To make the movie even more lucrative, 100% of its financing was covered before it went before the cameras. It’s the sort of title Malofilm builds a theatrical strategy around.

Having films in the marketplace constantly is the only way to compete, from the point of purchase to place of exhibition, he says. ‘We buy carefully, we buy when things are on sale. And it’s easier to get into the marketplace through the sheer fact that we have so many films.’

In 1993, Alliance released in excess of 50 theatrical titles, last year it distributed close to 60.

Malofilm specializes in French-language films for the Quebec market. Malo says the Quebec market is not as lucrative as it used to be, since American pictures began opening in French simultaneously with their English releases. Abolition of the rule restricting American films to opening six to 12 months after they had opened in English is to blame.

‘Last year, the only picture that made money was Louis 19 and all the others died,’ says Malo, estimating the competition with American majors as now about the same for francophone and anglophones.

‘It’s not that we are not as good as the Americans, we are,’ Malo maintains. ‘If you give an American $2 million to do his picture, he may not do better than us with our $2 million. It’s just that they have $30 million to do the same project.’