Cineplex is celebrating two anniversaries in 2024: the 45th anniversary of the opening of its first cinema in Toronto, and the 25th anniversary of Galaxy Entertainment, a company whose merger with the Canadian subsidiary of Loews Cineplex Entertainment (2003) gave birth to the cinema chain in its current form.
This anniversary year is also shaping up to be quite lucrative for the Canadian giant, with the opening in August of a multiplex at the new Royalmount Centre in Montreal, after its revenues in the first quarter of 2024 totalled $125.1 million, which is up from $123.3 million in the first three months of 2023.
This success, however, is not going down well with smaller theatres, who say they are on the brink of collapse. They deplore the fact that the company enjoys a quasi-monopoly that is unprecedented in the world, monopolizing, according to the Canadian Independent Exhibitors Network, 75% of the country’s box office receipts. The network also believes that Cineplex is multiplying unfair strategies, guaranteeing itself exclusivity in the distribution of the films it presents in certain sectors and charging online reservation fees deemed misleading by the Competition Commissioner.
A look at the keys to the success of a company that is far from unanimous.
Constant expansion
In 1979, Cineplex made a spectacular entrance into the industry. Nathan “Nat” Taylor, a former manager at the Famous Players Canadian Corporation and considered one of the inventors of the multiplex, founded the very first Cineplex Corporation cinema with Garth Drabinsky, in the basement of the Toronto Eaton Centre. With 18 screens and 1,600 seats, their establishment became the largest cinema in the world and was part of the Guinness Book of Records.
In the years that followed, the two men managed to break up the duopoly between Famous Players and Canadian Odeon Theatres, opening new multiplexes and acquiring theatres in the United States. In 1984, they bought Canadian Odeon Theatres, with the help of the Bronfman family, forming the Cineplex Odeon Corporation and acquiring 143 theatres, 383 screens and 29 drive-ins.
However, in 2001, the company, which had now merged with Loews Cineplex Entertainment, was on the verge of bankruptcy. Meanwhile, in 1999, Ellis Jacob and Stephen Brown, two former directors of Cineplex Odeon Corporation, founded Galaxy Entertainment. It was this company that would become, after its merger with the Canadian operations of Loews Cineplex (2003) and the purchase of Famous Players theatres (2005), among other changes, the Cineplex Inc. that we know today. Ellis Jacob is still its president and CEO.
“Fierce competition”
If Cineplex has become, in nearly 50 years, the largest theatre operator in Canada, it is because its management “has always been attentive to the needs of its customers,” says Daniel Séguin, the company’s senior vice-president of national operations. “In recent years, it has been a lot about diversifying formats, such as 4DX, UltraAVX and IMAX,” he says. “And it is not only since the arrival of platforms that we have been trying to create an interesting experience with our theatres.”
Sonya William, director of the Canadian Independent Exhibitors Network (NICE), says that Cineplex has been able to establish itself in growing markets, often outside major centres, but that today, the company “is benefiting mainly from the fierce competition it imposes on smaller theatres.”
This includes a system of “zones” established between theatres and distributors, where independent exhibitors within a five-kilometre radius of a Cineplex theatre must wait until the latter has finished showing a film before being able to offer the same one. According to NICE, this system affects 67% of its members, many of whom say they are operating at a loss. “For small theatres in remote areas, it is essential to be able to show both independent films and blockbusters that Cineplex would show,” adds Mme William. But too few of them have this chance.”
Cineplex has not confirmed Duty that such a system was in place, but responded by email that “it is up to distributors to decide where they show their films.”
Easier in Quebec?
Jean-François Lamarche, director of programming at Cinéma du Parc in Montreal, says that his establishment is subject to “this unwritten rule,” although he has found a way around it: “If the Cineplex du Forum shows a film in English, we can show the same film, but only with French subtitles. It’s the same for a Quebec film that would be shown at the Quartier Latin. We have to offer it with English subtitles.”
Moreover, most of the cinemas that suffer from competition from Cineplex are in English Canada, Sonya William points out: “The Quebec market is more diversified, with a strong presence of Guzzo and Cinémas Ciné Entreprise.”
In fact, none of the Quebec cinemas contacted by The duty does not say it faces unsustainable competition from Cineplex, but all still deplore the “zone” system, from which Guzzo and Ciné Entreprise can also benefit. This is the case of Joël Côté, co-owner and programmer at the Le Tapis Rouge cinema in Trois-Rivières, who regrets “not being able to present a Quebec film” when a Ciné Entreprise cinema offers the same one: “It’s David against Goliath.”
In other words, although this system is not specific to Cineplex, the Canadian giant benefits from it more than anyone else in the country and does nothing to abolish it or make life easier for small theatres, according to the latter. “It’s the law of the market,” summarizes Jean-François Lamarche, “and the market is not very regulated.”
“Misleading” prices
Last February, it was also revealed that the chain had raked in nearly $40 million from online booking fees, which were at the heart of allegations of deceptive practices. The Competition Bureau had sued Cineplex for a $1.50 fee that was deemed “deceptive” and charged for each ticket purchased online, and which was not always clearly displayed. Since then, Cineplex has responded that the allegations were “unfounded.”
At the same time, the company continues to rethink the movie experience, focusing increasingly on arcades. Its new cinema at the Royalmount Centre, which is scheduled to open in August, will notably feature a “Rec Room” complex, including a bar, arcade games and bowling alleys.
“We are constantly looking at how to maximize our activities,” concludes Daniel Séguin, “by presenting films targeted to specific clienteles based on regions and by offering the best possible technologies.”