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Independent cinemas accuse Cineplex of shutting them out of market for top films

If you’ve been wanting to watch some of this season’s critically acclaimed movies at your local independent cinema, you may be out of luck.

Independent movie theatres across the country say Cineplex Entertainment, which owns about 75 per cent of the screens in Canada, is shutting them out of the market for top films like Oscar winners Parasite and Little Women.  

The recently formed Network of Independent Canadian Exhibitors (NICE) alleges Cineplex keeps distributors from providing films to other theatres while they’re playing at a Cineplex in that city — even if it’s several kilometres away, for months at a time. 

“It’s frustrating,” said Corinne Lea, owner of the Rio Theatre in Vancouver, who started an online petition to bring attention to the issue. “The way they’re doing it, the small businesses can’t compete.”

Lea says NICE plans to file a complaint with the Competition Bureau of Canada — and one expert says theatre owners could have a strong case. 

Industry insiders say the practice of exclusive runs at certain cinemas isn’t new. But independent theatres say that exclusivity has become excessive and keeps them from showing award-winning movies for longer than ever. 

Independent owners say the issue is all the more pressing because of UK-based Cineworld Group’s pending takeover of Cineplex, which has already prompted concerns about limiting choices for consumers. 

Fighting for moviegoers

Jessica Smith, director of programming at Paradise Theatre in Toronto’s Bloordale Village, says Cineplex’s exclusivity zone extends several subway stops from her venue. 

“Why should you have to travel all the way downtown if you want to see a film when there is a cinema on your doorstep?” Smith said. 

Toronto’s Paradise Theatre reopened in December 2019 after it had been closed since 2006. (Paradise Theatre/Facebook)

Mario Fortin, general manager of Cinémas du Parc, Beaubien and du Musée in Montreal, say Cineplex’s restrictions limit moviegoers’ choices. 

“We will continue fighting to get the best films from all over the world for our customers so that they discover what good cinema is all about,” Fortin said. 

Cineplex denies allegations

Distributors like Fox, Universal and Warner Brothers own the rights to the films and make them available at theatres. 

In a written statement, Cineplex said, “It is up to film distributors where they play their movie.”

Last December U.K.-based Cineworld bid to purchase Cineplex Entertainment, prompting concern that less Canadian content will be shown on the big screens. (Michael Wilson/CBC)

But independent cinemas say Cineplex’s clout empowers it to pressure those distributors from showing films elsewhere. 

Fortin and others say distributors don’t tell them in writing that Cineplex won’t let them provide films to their theatre, but they admit it over the phone or let it slip over drinks. 

Fines up to $15M

The Competition Bueau says it’s aware of the Rio’s petition and the allegations, but by law it can’t confirm if it’s investigating. 

Tom Ross, a professor at the University of British Columbia’s Sauder School of Business, says if the allegations are true owners like Fortin and Smith could have a pretty strong case. 

“We do have rules because we think that the economy will function best if markets remain competitive,” Ross said. 

“Telling suppliers not to deal with your competitors when you’re a big firm is kind of one of those bully sort of tactics that kind of crosses the line.” 

Ross says most often the bureau settles disputes without punitive damages, but it can issue fines up to $15 million. 

‘Different cultural appetites’

UBC film professor Ernest Mathijs says the distribution market has long been governed by “gentlemen’s agreements” over territory and exclusivity that change over time. 

Traditionally, Mathijs says, theatres have had exclusive access to films for four to six weeks. 

But Mathijs says applying that exclusivity across an entire city, for months, “seems a bit exorbitant” — especially given how quickly films become available through streaming and online rental services.

Part of the issue, according to Mathijs, is that Canada has relatively few regulations to ensure business practices don’t trump consumers’ rights. 

“It’s definitely important that the voice of the independent theaters gets heard,” he said. “It caters to different cultural appetites.”