What does Cineplex have to do with keeping indie cinemas alive?

What does Cineplex have to do with keeping indie cinemas alive?

Today, Canadaland Commons published an episode about Cineplex and cinema in Canada in its Monopoly podcast series.

We’re always happy to share more from the experience of Canadian independents who have been unheard for far too long. We hope you will follow NICE on Twitter and Instagram as we grow.

“Cineplex is easily the most dominant company of any that we’ve covered on this season,” says Canadaland Commons host Arshy Mann.

“How exactly does Cineplex use that dominance?”

“Take this all in for a minute,” says host Arshy Mann.

  • “Cineplex has 3/4 of the cinema market outright.
  • They’re the only option in many places.
  • There are strong indications that they are using their market share to push around their competition.
  • They’re now vertically integrating their industry.
  • And just to top it off, you now have to pay an extra $1.50 for every Cineplex ticket you buy online; a classic example of a junk fee.

Now in my opinion, all of this taken together makes Cineplex the best example of a classic monopoly that I’ve come across in this country. But another indication is the fear that people in the industry have about speaking out about Cineplex’s power.”

“I often compare it to the Death Star and the Rebel forces,” says Corinne Lea, owner of the Rio Theatre in Vancouver, BC, in the Canadaland Commons episode. “I feel like indie theatres are the Rebel forces and we are not going anywhere. We’re always mobilizing and working together and figuring out, with other independent filmmakers, how to exist outside of the corporate dominance.”

Cineplex is easily the most dominant company of any that we’ve covered on this season.

Canadaland Commons host Arshy Mann
How this impacts you

Have you ever wondered why it takes so long for movies you’re interested in to make it to your local cinema? Have you ever come across a vibrant indie cinema in a foreign city and wondered: Why don’t I have something like this near my home? Or maybe you’re in Halifax, in which case you might think: Where did all the indie cinemas go?

There’s an illusion of choice here that NICE is trying to lift the curtain on. If you think your local cinema is doing something against its own best interests—perhaps it needs your help to make its circumstances known. Support your neighbourhood, advocate for your local cinema!

“What we are and what this industry represents is really Canada’s ability to tell our own stories to ourselves,” says Sonya William, director of NICE, in the Canadaland Commons episode. “All these little venues that we’re talking about […] cultivate a local audience, show more different movies and create more meaningful engagement with those movies.”

“And you have to start thinking about, if there’s one company who books the majority of the films and the majority of the grosses come from that company, they’re dictating what films open in Canada,” says Andy Willick, chair of the Board at NICE and owner of The Fox in Toronto, The Apollo in Kitchener and the ByTowne Cinema, Ottawa in the Canadaland Commons episode.

From coast to coast, many diverse stories and new voices would never reach their audience without these neighbourhood hubs. As at-home streaming, the tightening of theatrical windows and the continued effects of COVID-19 impact mainstream viewing habits, independent cinemas need more support than ever to play their important cultural role. 

Cineplex’s outsized presence

Cineplex is Canada’s largest film exhibitor with 75% of Canadian box office market share in 2019 (source: Cineplex Investor Relations deck, Third Quarter 2022).

For context, the largest UK cinema chain, Cineworld, has 24% of market share based on revenue in 2018 (source: Statista 2020).

In the US, AMC has the largest slice of market share with 23% in 2021 (source: IBIS World 2022 report ‘Movie Theaters in the US’).

Meanwhile, the largest Australian company, Event Cinemas, has 28.7% of market share based on revenue in 2017 (source: MPDAA). 

In short, Canada is not facing a standard state of affairs.

Cineplex is Canada’s largest film exhibitor with 75% of Canadian box office market share in 2019.

Source: Cineplex Investor Relations deck, Third Quarter 2022
Fair access to film

In a 2022 survey, 67% of NICE members reported that zone restrictions seriously impacted their ability to serve their customers in a timely fashion.

We recommend this great Twitter thread for more info from NICE member The Screening Room in Kingston, ON.

Many independent cinemas are forced into an unofficial ‘zone’ system, meaning they cannot play a film until it has ended its run at a multiplex cinema within a geographic area.

However, zones are inconsistently applied—even for the same cinema over the course of just a few titles—and don’t correspond to any official system. They are imposed as a way of ensuring market exclusivity on a film’s initial release.

As Corinne Lea of the Rio says in the Canadaland Commons episode, “There’s a whole network in our industry where you can look up and see what any cinema’s box office sales are. So we can look it up and go, oh what are they doing with this, let’s say Top Gun at International Village? And we’ll see, oh they had three tickets yesterday. So they can have a week where maybe only three people are coming and they will still hold it and the distributor will not let us show it, where we could get hundreds of people out.”

The application of zones routinely benefits Cineplex over independent film exhibitors; we argue that this is often not in the best interest of domestic box office and not a fair competitive practice.

67% of NICE members reported that zone restrictions seriously impact their ability to serve their customers in a timely fashion.

Source: NICE member survey, 2022
Cineplex as distributor

On January 5, Lionsgate revealed that it was entering into a theatrical distribution agreement with Cineplex Pictures to bring the studio’s entire 2023 slate of 11 movies to Canadian cinemas, including Cineplex venues and those operated by competitors.

As quoted in Barry Hertz’s Globe and Mail piece on this deal, Sonya William of NICE commented: “Indie cinemas across Canada are facing enormous hurdles, trying to rebuild their audiences and show the movies their communities will want to see. This decision turns Canada’s dominant cinema chain into the supplier for your local indie cinema. Does that sound like a fair marketplace?”

In sum—for now

There is much to be said on the state of film exhibition in Canada, and it can’t all be summarized in one blog post. NICE is here to celebrate and support independent film exhibition, and our dreams are positive ones with exciting new venues across the country. We want the world of cinema to be accessible and fun for audiences and venue operators.

“We’re talking so much about just preserving the cinemas and film exhibition spaces we have now, but the dream is: More of them,” says Sonya William of NICE in the Canadaland Commons episode. “More new people coming in, bringing the films that they love, the communities that they come from. And having those spaces within your neighbourhoods and cities.”

Ultimately, one company with 75% market share diminishes a consumer’s choice of how, where and how much they must pay to watch a film. The current marketplace weakens Canadian film distributors by limiting their ability to acquire, distribute and profit from their films. It limits independent cinemas’ ability to succeed by slowing down when they can open a film, the selection available to them at any given moment, and the cost incurred. It diminishes the value of government resources used to fund Canadian production, as many of those films never make it to Canadian big screens.

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