…and how to turn this situation around.

The first time I ever set foot on a movie set was back in 2001 (working as a boom operator on a Sarah Polley short film). Since that day my passion for making movies has only grown and intensified. But one underlining question that continues to run through my mind is…why do most (95% or more) Canadian films tank at the box office.

Ask any Canadian filmmaker this question and you’re sure to start up a very long and never-ending conversation that might leave you wonder what made you want to open that can of worms. Well, I’m going to open the can of worms…just for this article. I’m so proud to be Canadian and our industry produces world-class movies year after year, however, these films just don’t seem to make any money (profit).

I found a great article by Canadian actor, writer and producer, James O’Regan that explores this matter in further detail:

Over the last year or so, a great teeth-gnashing has broken out within the Canadian Movie industry. Producers and their public sector confreres at Telefilm Canada sat down to wonder why no-one saw Canadian movies in the theatres. And now Telefilm has unveiled new money to throw at the problem.

In case you don’t know, Telefilm Canada is an arms length crown agency that has no public accountability via a “value for money” audit unless its own board of directors thinks it needs one – wow, get me on that gravy train, quick! It has generated, over the last 30 years, an industry wholly ignorant of Canadian theatrical film markets and wholly dependent on cultural welfare in the mistaken belief that you just can’t make any dough here a mare usque… I and every American film distribution company on the planet know different. I know because I’ve made money in the Canadian box office, in fact more money on one film than all Telefilm films on average. My short comedy, Edsville – about an innocent young couple that stumbles upon a town of Ed Sullivan impersonators – has a recoupment rate of 20% while the average recoupment rate published in Telefilm’s annual report, year after year, hovers at 2%-ish. I’ve also observed what our Yankee cousins actually do. All you have to do is ask them and they’ll actually tell you – hey, who knew?

So let’s see what it takes to make money and sell movies in Canadian moviedom. Here’s the top 12 for anyone who wants to make $8M on a movie in three weeks in Canada:

Rule # 1: No one knows what sells

Rule # 2: See Rule # 1, no, seriously, memorize Rule #1. I’m not saying this only to make the list apostolic, really. I could make something else up.

Rule # 3: Anything that helps sell is good

Rule # 4: The public will pay to see things or people they really like

Rule #5: Exploit people or things that the public likes

Rule #6: The Canadian Public doesn’t care who directs, writes or produces movies

Rule #7: The Canadian Public pays to see “people” on the screen. Actors are the Product

Rule # 8: The Canadian Public loves Stars

Rule # 9: Make sure you have a story

Rule #10: Comedy Sells (Canadians are masters of comedy)

Rule #11: Do everything you can to ensure the Canadian Public knows about the movie

Rule #12: To the risk taker goes the reward. All else is bunk.

To manufacture and market a Canadian movie to the Canadian market, you have to invest $3.5M. Making the movie costs CDN $2.5M. Marketing the movie for a 100 screen three week release costs CDN $1M.

Let’s take a look at how much money you can make. A 100-screen release can generate up to $16M in revenue. If you control the marketing with your $1M, you get $8M back from your $3.5M investment. Isn’t math for fun and profit great?

If you don’t spend that $1M, you are guaranteed to make nothing at the Canadian box office. Telefilm Canada and its producers don’t spend the money and the results are predictable. Movies funded by Telefilm Canada don’t earn a profit from Canadian box office; they don’t even recoup. Telefilm Canada data shows that Canadian distributors have an average marketing budget per Canadian film of $30,000 – about $970K short of what they need; that this average results from a blend of a majority of films released with an actual budget of less than $10,000. Hoo boy, why aren’t these films making the big bucks, eh?

Let’s say it again for the benefit of Telefilm and its Canadian producers, you must spend $1M regardless of a movie’s budget to have a chance at success.

Had the recent Egoyan opus, The Sweet Hereafter, received $1M in Canadian marketing highlighting the divine Sarah Polley, it might have made some bucks. After all, Polley has a following in Canada – more of a following than Egoyan. Yet it was Egoyan that the producers tried to market, not Polley. The little money that was spent was spent foolishly – see rule #6.

Even a American B movie like Nurse Betty gets the full $1M marketing treatment. Learn the lesson from American distributors who know better; who do spend $1M for each film they release in Canada.

Here’s the best part about making sacks of cash in Canada. Manufacturing, distribution and marketing infrastructure are all 100% in place. All you have to do is come up with a movie to market and some cash to market it with. Hey, pinch me!

Why isn’t it working now? Why is Telefilm’s record so dismal? Public policy has intervened in the movie business only at the level of manufacturing – dolling out wallops of cash to make movies. The new funds maintain that approach. This is simply bad policy and we have bank vaults full of unseen films to prove it.

The only successful public policy intervention on the books are Canadian Content (CanCon) rules for the Canadian music industry. There, public policy told the radio stations (the exhibitors) that they had to play a percentage of Canadian music or else they would be shut down. Today, we have a thriving music industry with big Canadian stars.

Before CanCon in the music industry, Canadian Radio stations played about 3% of Canadian content. After CanCon, it became 30%. Can-con drove the business of the Canadian music industry. It supported the early market-driven development of Canadian music stars. It allowed financial and artistic success in the small Canadian market. Remember there was no success before Can-con rules for the music industry. That Canadian-based market success worked as a springboard to world success for many Canadian performers. It took a while to work but work it did.

Marketing is simple. It just costs money. With its new infusion of funds, it appears that Telefilm will try to mystify the process per usual, read the entrails and divvy up the dough without recognizing rule # 1 – no one knows what sells. That is the mystery and joy of movie selling – ya just don’t know and no-one can give you the magic bullet, i.e. previous box office records, e.g. think how many major studios have hit rock bottom with a series of losers only to bounce back “unexpectedly.”

If public policy is going to intervene, it should get out of movie production and into the marketplace with CanCon for Canadian cinemas. Set a quota, step out of the way and voilà: in five years, we will have a thriving movie business with big Canadian stars. Movie producers are much better at making movies than cultural bureaucrats. I know, call me crazy, but it’s true.

CanCon rules for the Canadian movie business are one means of helping create movies and movie stars without spending a lot of tax dollars. That’s all they do. Canadian movies don’t need it to succeed but if government is to intervene to help reward risk, then that’s the best way and means of intervention, and cheaper too.

For public policy, how bad could it be to issue an “initiative” to exhibitors across the country, insisting that 10%, 20%, 30%, 40% of product viewed in Canadian cinemas must be indigenous Canadian product over a period of years. Then stand aside and let the industry do what it does best: sell movies.

Hey, it ain’t that hard. After all, no one, not even Hollywood, knows what sells. Remember rule #1?

How to turn this situation around?

Now, it’s time for me to add in my two cents worth. We (the Canadian film industry) need more film studios here in Canada. I’m not talking about some glorified soundstage like Filmport but a full-fledged independent movie studio that has 100% control of the financing, development, production and worldwide distribution of their movies. These Canadian movie studios should have only two objectives:

1)     To make movies that will entertain millions of people around the world. Focus on giving moviegoers what they want and according to the current all-time North American box office stats…people want to see movies with Action, Animation and Special effects. Success leaves clues.

2)   To maximize profits.

That’s it. When that day happens, then we’ll definitely see a lot more Canadian films reaching the #1 spot at the box office. Both domestically and overseas.

Ian Agard
Filmmaker & Author of “Stop Waiting and Make Your Movie” 
http://www.ianagard.com 

P.S. Get info about my new ebook at:

http://www.ianagard.com/how-to-finance-your-movie