Discover more from regs to riches
🍿 cineplex's monopolization
🎥 changing the channel on fair access to film
I just devoured “Chokepoint Capitalism: How Big Tech and Big Content Captured Creative Labour Markets and How We’ll Win Them Back,” by Rebecca Giblin and Cory Doctorow.
It’s all about how culture has been captured by “exploitative businesses creating insurmountable barriers to competition that enable them to capture value that should rightfully go to others.”
🍿 Maybe we have a Made-in-Canada chokepoint of our very own: Cineplex.
It is fascinating to note the legislative attention to the threat and implication of streaming services occurring right now in Canada that totally ignores this mighty monopoly. Regulators are thinking deeply about whether requirements for digital streaming services can be brought into alignment with obligations that exist for radio and television.
In considering the most appropriate parallel to broadcasting standards for streaming services - to the extent that one exists in a context of limitless content - we are making the mistake of overlooking the channel of movie theatres.
Instead of a tech policy agenda focussed on new accountabilities for big tech along the digital economy trifecta of data, content, and competition, Canada is having deep - and important - conversations about culture. That’s okay, but ignoring the current terms of competition for Canadian cinema is not. Thinking about Cineplex helps link these concurrent conversations in an important way.
Put simply: Canada has a Cineplex problem. A quasi-monopoly that is throttling film releases and challenging the business viability of independent cinemas across the country. Cineplex is a [major, big box] “gatekeeper.”
It is the number one distribution vehicle for studios and has ~75% of the Canadian movie theatre market (400+ screens), but arguably controls all of it. No comparable exhibition monopoly elsewhere in the world. This means that Cineplex decides whether and when independent cinemas have the ability to screen a new film. THAT’S why you can basically never see new indie stuff at your local cinema (even the TIFF Bell Lightbox is subject to the whims of one firm). That said, while smaller indie films can often be opened at local cinemas, studio crossover films are not.
The distributional power of Cineplex is amplified by additional pressure from shorter windows between theatrical releases and streaming services and the fact that there are fewer films available/made overall every year.
Overall, this kind of market power tilts us towards monoculture. Canadian cinema is broken in a very particular way. It fundamentally hurts consumers if a couple of guys named Rob are making filmgoing decisions for the country. Seriously - check LinkedIn and meet the “ROBber barons of Canadian film.” I’m not naming The Robs as this isn't about them as people, it's about their collective power under Cineplex as a chokepoint.
All of this is hiding in plain sight - the data is there via comScore (formerly “Rentrak” - here is how it works). Now, a caveat: not all cinemas in Canada have played each film. E.g. Toronto’s Revue Cinema didn’t play “Elvis,” but that doesn’t mean that they were actively excluded though it is likely they would have had to wait quite some time to get it.
We invest government funds in the creation of Canadian content and fuss endlessly over its definition, but then sort of forget about whether and how anyone is actually going to see these films. We should care more about the distribution prospects of these films even though streaming is becoming more and more popular.
What else? For all the Conservatives’ invoking of “gatekeeping,” here’s an actual example that they would help change. You want to “get rid of” the gatekeepers? Cineplex is right there.
As a nation that prides itself on multiculturalism, we should do more to ensure consumer choice across art films, European releases, South American cinema, Indian cinema, and other cultural communities that are under-served by Cineplex’s puppetry of the marketplace.
We go to the movies to escape, and to immerse ourselves in new worlds. Public policy can help independent cinemas escape how Cineplex determines distribution allocations and timing, and allow movie-goers to immerse themselves in a new world where they enjoy a greater variety of films and more choice. Eliminating Cineplex’s ability to enrich itself at the expense of independent cinemas will continue to erode the financial viability of independent cinema.
Canada is anticipating a comprehensive review of the Competition Act. Taking competition seriously in this country demands more of an all-of-government approach like the one exemplified by the Biden administration, where we can more competently examine competition issues that fall outside of the core legislation.
All this invites the question of whether a healthy, vibrant film culture is already dead in Canada. It’s a perfect moment for Cineplex’s monopolistic curation - they are taking as much as they can amid streaming's growing popularity. Maybe supply and demand would work differently if Canadians had the capacity and the courage to demand more. It’s worth remembering that the Canadian film distribution business was “blown wide open” in the 1980s by a court settlement between the majors under the Combines Investigation Act (which preceded the Competition Act). In the press release, the Government of Canada trumpeted that, “market forces will now be able to determine which theatre will play a picture rather than long-standing arrangements.” The Ontario government also tried to break up the Famous Players monopoly. I learned about this in a library book, and then read the “Investigation into an alleged combine in the motion picture industry of Canada” (1931). Plot twist: the investigation was a result of an application initiated by a then-fledgling Canadian-owned theatre chain called Cineplex Corporation.
🎞️ So, a firm that historically opposed concentration in cinema has now used a different playbook to become an exhibition monopolist.
When discussing the future of Canadian content, we can’t continue to ignore or discount the channel of cinema. We *could* change this chokepoint so that great independent films can actually come to a theatre near you - soon.
We have a bunch of government programs to create Canadian film, but have not intervened on the distribution side (see: Canadian film tax credit, this of Certified Independent Production Funds, and more).
Cineplex’s market share and vertical integration have made it the de facto gatekeeper of Canadian cinema - they are curating what Canadians can see;
The firm controls and constrains the schedule of film releases - disallowing independent cinemas from being able to exhibit mainstream films at the same time as Cineplex (starting with opening weekend) and delaying from there;
Just because a great Canadian film gets made, doesn’t mean you will see it at the box office. Telefilm used to have a 5% of the Canadian box office target for Canadian film grosses, which seems to have since been abandoned.
“Market forces alone cannot achieve Canada’s sovereignty objectives in the…cultural industries” (that’s from Compete to Win).
Most movie-goers are most motivated to see a film around the time of opening;
The fees raised through popular cinematic releases can offset the comparative losses from indie films that may have more niche audiences, though there are plenty of profitable indie releases. The fact that Cineplex limits distributors’ ability to access smaller films at a reasonable price is the larger issue;
Without fair access to every film, independent cinemas struggle to survive and are forced to make difficult decisions that may further skew viewing schedules;
Streaming services are gobbling away at all of this, and there are less theatrical releases every year (due to a mix of pandemic delays and the growing popularity of direct-to-streaming).