The Myth of Meritocracy: Ignoring the Political Economy of the Canadian Film Industry

Mike Gasher (Simon Fraser University)

Canadian cinema is plagued by the myth of meritocracy. This doctrine endorses the democracy of the marketplace, in which cultural consumers discriminate solely on the basis of universally accepted conceptions of artistic worth. Those cultural products which deserve to survive will survive. If Canadian films account for just 3% of screen time in Canadian cinemas, in other words, then that is their deserved share. Canadian films worth showing will be shown.

This popular line of argumentation discounts completely the political economy of culture, and specifically the political economy of the film industry in Canada, in which vested interest prevails. It does not ask "Which cultural products are on the shelf?" or "What choice do moviegoers have?"

Merit is not completely irrelevant to decisions about which films are produced, distributed, and exhibited, but it is greatly overstated. Thirty years have passed since Canadian literature and Canadian popular music initiated their struggle to earn a place in the Canadian mediascape. Canadian film now takes its turn to try to overcome concrete structural hurdles placed in its path in the name of meritocracy.

The Competitive Climate

Steven Globerman (1991) has subscribed most enthusiastically to the myth of meritocracy in his analysis of the Canadian film industry. His economic assessment concludes: the industry is highly competitive; because it is highly competitive, foreign-owned distributors cannot afford to discriminate against commercially viable Canadian feature films; and the way to ensure Canadian film's visibility is to produce more films that moviegoers want to see (Globerman, 1991, pp. 204-205). Globerman's argument responds to the conclusion by public policy-makers that foreign ownership of film distribution adversely affects the development of an indigenous film industry (p. 191).

To begin, Globerman argues that there is "no bias" on the part of film distributors "against distributing commercially promising Canadian films" (p. 191). He has described the production sector as "workably competitive" (p. 193) and, while conceding distribution revenues in the industry's theatrical sector "are largely concentrated among a few foreign-owned firms" (p. 199), the evidence is only "suggestive" of a market power problem and may in fact reflect foreign distributors' economies of scale. He cites data reflecting a "fairly aggressive rivalry" among the major Hollywood film studios for screen time in Canadian movie theatres (pp. 201-202). "In sum," Globerman writes, "it is inappropriate to link any dissatisfaction that policy makers might have with the commercial performance of Canada's feature film industry to the concentrated presence of distribution majors in the theatrical sector of the industry" (p. 202).

Secondly, Globerman argues it is in the major distributors' economic interest to handle commercially viable Canadian feature films (p. 193). "Commercially promising Canadian films will be distributed by the majors, since it is in the majors' self-interest to do so" (p. 204). He cites the example of the Canadian film Meatballs, which enjoyed "major commercial success" (p. 198) after its American and Canadian theatrical rights were secured in 1978. The film's box-office gross was $55 million (Pendakur, 1990, pp. 209-210). Globerman rejects the assertion that foreign-owned distributors underrate the commercial capacity of Canadian features and impose unfair terms on Canadian producers (p. 194). Besides, Globerman argues, economies of scale suggest "that concentrated ownership of the theatrical distribution sector can promote efficiencies" (p. 201). "In short," he writes, "it is simply not credible to argue that a reluctance on the part of the majors to invest in Canadian production is a significant determinant of the international competitiveness of Canada's feature film industry, when one is considering commercial feature films" (p. 203). Globerman encourages Canadian producers wishing to gain access to international film distribution channels to make concessions to Hollywood tastes because the "major distributors are for-profit organizations whose competitive advantage resides in the international distribution of mass appeal feature films" (p. 198).

Finally, Globerman reveals his subtext: make good films and your problems are solved. He quotes cultural critic Robert Fulford:

Are there good Canadian movies on the shelves, callously ignored by U.S. distributors? Every year I attend the Genie Award screenings and see most of the Canadian features, and every year I come away convinced that, with rare exceptions, the films that are not distributed do not deserve distribution. The problem is with the producers who make so many bad films, rather than with the distributors; when good Canadian movies are made they usually get into theatres and find appropriate audiences. (p. 204)

Globerman himself concludes: "Improving the competitiveness of Canada's feature film industry quite simply requires making more films that a greater number of people want to see" (p. 204).

Vertical and Mutual Integration

Globerman's argument ignores the political economy of the Canadian film industry; he makes no mention of the vertical integration of the principal Hollywood film companies. By treating feature films as exclusively economic products, Globerman subsumes their cultural value; government subsidies to Canadian film are based, not on its economic value, but its cultural value. Finally, his analysis employs the kind of meritocratic argumentation commonly used to discount the cultural production of disempowered groups: women, native peoples, blacks. Yes, Hollywood tastes prevail in the production, distribution, and exhibition sectors of the film industry, and that is the greatest impediment to developing an indigenous Canadian film tradition. But let me respond to each of Globerman's three points in turn.

The principal characteristic of the film industry in Canada is its vertical integration. The majority owners of the two major theatre chains operating in Canada, Cineplex Odeon Corp. and Famous Players Ltd. Canada, are American multinational corporations which also own Hollywood film production companies and film distribution companies. These interlocking empires, therefore, have a vested interest in using their theatre subsidiaries to show their own film product.

Further, the two Canadian theatre chains have a first-run film allocation policy between them "to keep intraindustry rivalry contained among competing theater chains" (Pendakur, 1990, pp. 98-99). Famous Players, that is, has exclusive first-run rights in Canada to all MGM, Paramount, United Artists, and Warner Bros. films. Cineplex Odeon has exclusive first-run rights to all Columbia and Universal Studios films. The two chains share Twentieth Century-Fox films: 66.66% for Famous Players, 33.33% for Cineplex Odeon (Pendakur, 1990, pp. 98-119; Weinzweig, 1987, pp. 173- 174). Canada's theatre chains, then, compete to attract people to their theatres, but they do not compete for film product.

Cineplex Odeon Corp. is 50%-owned by MCA Inc., an integrated film, television, broadcasting, and publishing company whose subsidiaries produce, market, and distribute motion pictures and home videos. MCA owns Universal Studios Hollywood and Florida (Moody's Investors Service, 1990, pp. 5920-5922). MCA is in turn owned by Japan's Matsushita Electric Industrial Co., which purchased MCA Inc. for $6.1 billion U.S. in November, 1990. Matsushita is the world's largest consumer electronics firm (Castro, 1990, p. 48).

As of March 31, 1991, Cineplex Odeon operated 1,686 theatre screens in 404 locations in the United States and Canada. Cineplex Odeon Films Canada is Canada's largest independent film distribution company (Cineplex Odeon Corp., 1991).

Famous Players Ltd. Canada is 100%-owned by Paramount Communications Inc., which is in the business of producing, financing, and distributing motion pictures, television programs, and home videos, as well as operating movie theatres and publishing. Paramount Pictures is one of the major Hollywood film studios (Moody's Investors Service, 1990, pp. 6060-6063). Famous Players owns and operates 487 screens in 136 locations across Canada, and owns approximately 25% of CFP Distribution, whose majority owner is Cinepix of Quebec (Gillian Shaw, director of public relations, Famous Players Ltd. Canada, personal communication, September 3, 1991).

The industry that Globerman describes as highly competitive, therefore, is in fact an industry dominated by two multinational corporations whose subsidiaries operate in all three industry sectors: production, distribution, and exhibition. Further, those two companies' theatre chains have a long-standing pact to share, rather than compete for, the product of the seven major Hollywood studios.

But MCA and Paramount are not merely vertically integrated; they are mutually integrated through joint ventures. Since 1981, for example, MCA, Paramount, and MGM/UA Communications Co. (which owns two Hollywood studios: MGM and United Artists) have been equal partners in United International Pictures, distributing films to theatres and pay television outside the United States and Canada (Moody's Investors Service, 1990, pp. 5920-5922).

In 1989, MCA, Paramount subsidiary Paramount Pictures Corp. and United Artists Communications Corp. announced a joint venture to acquire, develop, and operate cinemas in the United Kingdom and Ireland, acquiring American Multi-Cinema Inc.'s British circuit of 22 theatres (Moody's Investors Service, 1990, pp. 6060-6063).

Also in 1989, Paramount subsidiary Paramount Domestic Television and MCA subsidiary MCA TV agreed to form PREMIER Advertiser Sales, a joint venture to sell advertising in programs distributed by the two companies (Moody's Investors Service, 1990, pp. 6060-6063).

These so-called competitors, then, who share the film product of the major Hollywood studios, are business partners in film industry joint ventures.

An Exhibitors' Market

Globerman argues that because the film industry is so competitive, distribution companies operating in Canada cannot afford to ignore Canadian films with commercial potential. While this is a logical argument when presented in abstract economic terms, it is not the case when we examine the structure of the Canadian film market.

To begin, we must acknowledge that it is an exhibitors' market. There are a finite number of screens, the same film plays in several theatres within the same market at the same time, many screens are limited to two screenings per day, and the same film can play on the same screen for weeks or months at a time. Theatres, therefore, cannot handle all the films produced in a given year.

If Cineplex Odeon theatres and Universal Studios are owned by the same parent company, then clearly Universal's films will have privileged access to screen time in Cineplex Odeon theatres. After that, Cineplex Odeon is contractually obligated to Columbia Pictures and Twentieth Century-Fox. Similarly, if Famous Players theatres are owned by the same parent company that owns Paramount Pictures, Paramount's films will have preferential treatment in Famous Players theatres. Famous Players has further contractual obligations to MGM, United Artists, Warner Bros., and Twentieth Century-Fox. Already the screens are getting crowded.

A further complication in what Globerman would have us believe is a competitive market for first-run films is the practice of "block booking." Certainly, theatre operators would prefer to exhibit one blockbuster after another, no matter the source. But in order to win exhibition rights to commercially prized films, through the practice of block booking theatre chains are also obligated to buy the studios' flops. As Manjunath Pendakur argues, this practice creates a minimum market for the studios' "lower-grade pictures" but also occupies screen time that might otherwise be available to Canadian independent films. Pendakur writes: "Through their block-booking policy, the leading American producer-distributors controlled almost all of the screen time available in the Canadian first-run market" (Pendakur, 1990, pp. 119-120).

Pendakur argues that the theatre chains' debt to the major studios leaves few holes for independent productions. Independent films are used primarily to fill scheduling holes, with no choice of theatres, dates, or publicity (Pendakur, 1990, pp. 154-157). Globerman cannot accurately claim that Canadian feature films are not commercially viable when they cannot even find room on the shelf.

The Universally Good

Charges of discrimination by the foreign-controlled distributors and exhibition chains have long been met with the kind of response Globerman forwards: the theatres will show "good" Canadian films if and when they are produced. Pendakur dismisses the argument by referring to the record. Canadian films such as Don Shebib's Goin' Down the Road (1970) and Claude Jutra's Mon Oncle Antoine (1971) only received commercial distribution after having won international awards. None of the seven top-grossing Canadian films between 1968 and 1978 were released during prime exhibition times. Canadian films that are performing well in the theatres -- Pendakur cites the example of George Kaczender's In Praise of Older Women (1978)--are sometimes pulled to accommodate a major distributor's film (Pendakur, 1990, p. 155).

Besides, in what is acknowledged as a high-risk industry, it is unfair to demand that Canadian feature films perform commercially at a standard that Hollywood itself cannot meet. Gaëtan Tremblay notes that the accepted wisdom in the United States is that one film in ten makes money, four or five others meet their expenses, and the remainder lose money (Tremblay, 1990, p. 287). Must Canadian features promise to consistently outperform the industry average to have any hope of commercial distribution?

Patricia Rozema best addresses the myth of meritocracy in her 1987 feature film I've Heard the Mermaids Singing, the video diary of Polly, a 31-year-old photographer who lives alone with her cat and finds fantasy in the darkroom of her apartment (Rozema, 1987). Even though she is "organizationally impaired" and cannot type, Polly's goofy charm wins her a job as part-time secretary to Gabrielle, curator of the Church Gallery. A Swiss whose European sophistication contrasts with Polly's social inadequacies, Gabrielle becomes a mentor figure; a smart dresser who presents herself with assured professionalism, she is at ease with such requisites of urban chic as sushi and art criticism.

Gabrielle's fear of aging is matched by her romantic desire for artistic immortality. She asks rhetorically: "To make something beautiful is to be beautiful forever, isn't it?"

"What do you wanna make that's so beautiful?"
"One painting. That's big. That's good. Undeniably. Unequivo- cally. Universally. Good."
"A painting?"
"I hate resenting someone else's talents."

Despite her surface strengths, Gabrielle has well-founded insecurities. Samples of her painting are rejected by an adult art class as "simple-minded." When Polly asks to see her work, Gabrielle deceptively shows her some paintings by her lover, Mary Joseph, instead. The canvasses emit a kind of fluorescent glow.

Polly pities the curator's sudden lack of self-assurance. She steals one of the glowing canvasses and mounts it in the gallery, unaware of Gabrielle's plagiarism. At the same time Polly is inspired to overcome her own timidity; employing the "pseudoname" Penelope, she submits to Gabrielle some of her photographs. Gabrielle dismisses Penelope's portfolio as "simple-minded" and asks Polly to send Penelope a rejection letter. Polly is shattered by Gabrielle's callousness and by her personal failure to live up to the artistic standard of the undeniably, unequivocally, universally good. She ritually burns her photographs and pushes her camera off the ledge of her apartment balcony.

But Polly's real sense of self-discovery is achieved in two phases at the film's conclusion. Accidentally, she learns that Gabrielle is a fraud and Mary Joseph -- who scolded Polly for mimicking Gabrielle's dismissal of Penelope's photographs with the question "What's good?" -- is the true creator of the glowing canvasses. More significantly, Polly gains the insight that Gabrielle's artistic pretension, too, is misplaced. Rozema's use of Biblical referents -- characters' names, their immaculate conceptions, the gallery set in an old church -- emphasizes Polly's reverence of art as a great cathedral, to which blessed practitioners of this most sacred religion are called, and in which mere mortals like herself may only worship. Gabrielle's fraudulence demands Polly rethink the role of art and the artist.

Rozema's film challenges persistent conceptions of a universal, objective standard of quality by which all artists are confronted. Who would be more sensitive to this than a Canadian film-maker, whose work is always measured against Hollywood's "universal" standard? It is a subtext which informs all discussion of Canadian film, television, music, literature, theatre, sport, and the struggle for a distinct Canadian voice. If it is good, the argument goes, undeniably, unequivocally, universally good, then it will find its audience. But, as Mary Joseph asks, "What's good? And who decides?"


The meritocracy argument grossly oversimplifies Canadian cinema's struggle to assert its voice in the mediascape and ignores significant structural impediments in the industry. Competition in the Canadian film industry is severely restricted by the vertical integration of the production, distribution, and exhibition sectors of MCA Inc. and Paramount Communications Corp., by the first-run film allocation agreement between the Cineplex Odeon and Famous Players theatre chains, by block-booking practices, and by joint ventures in other cinema projects which make MCA and Paramount industry partners. These practices may make the Canadian film industry economically efficient, as Globerman argues, but they do not render it competitive.

The Canadian film industry is more than an economic sector: it is a cultural sector and must be analyzed as such. The strongest argument undermining Canadian cinema's purely economic viability will prove nothing in terms of its cultural value. It is Canadian cinema's cultural potential which has prompted Canadian governments to promote and protect indigenous feature film through subsidies to the industry. To encourage Canadian film-makers to make concessions to Hollywood tastes may or may not assure the commercial viability of their films, but it most certainly compromises their cultural merit.

The Canadian feature film industry must maintain its integrity as an expression of the Canadian people's way of life and world view. A branch-plant industry devoted to the imitation of Hollywood films offers neither cultural merit nor economic prosperity.


Castro, Janice. (1990, December 10). Let us entertain you: Matsushita rattles American nerves by paying $6.1 billion for a Hollywood dream machine, but the giant MCA is likely to be stronger as a result. Time, p. 48.

Cineplex Odeon Corp. (1991). 1990 Annual report.

Globerman, Steven. (1991). Foreign ownership of feature film distribution and the Canadian film industry. Canadian Journal of Communication, 16(2), 191-206.

Moody's Investors Service. (1990). Moody's industrial manual (Vol. 2). New York: Moody's Investors Service.

Pendakur, Manjunath. (1990). Canadian dreams and American control: The political economy of the Canadian film industry. Toronto: Garamond Press.

Rozema, Patricia (Producer, Writer, and Director), and Raffe, Alexandra (Producer). (1987). I've heard the mermaids singing [Film]. Toronto: Cinephile, Les films du crepuscule.

Tremblay, Gaëtan. (1990). Les Industries de la culture et de la communication: Au Québec et au Canada. Sillery, Que.: Presses de l'Université du Québec.

Weinzweig, Daniel. (1987). The domestic market: Feature film distribution. In Barbara Hehner (Ed.), Making it: The business of film and television production in Canada. Toronto: The Academy of Canadian Cinema and Television.

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