Mr. Chairman, committee members, Alliance Films is a leading distributor of feature films in Canada. Our company also distributes films in the United Kingdom and Spain. Alliance Films distributes feature films to entertainment theatres, on DVD, online and to television broadcasters.
There may be the belief in some circles that film piracy only affects American studios. However, nothing could be further from the truth. Although I do not have a lawyer's skills to analyze Bill C-32, I am sitting in the front row where I can see the growing impact of piracy on our industry. I'm here today to express the wish that Canada become a leader in the fight against piracy.
According to the Ipsos/Oxford Economics study released today, piracy's impact on the film industry, including cinema owners, distributors, producers and retailers, is an estimated $895 million in sales losses. Government tax losses alone are estimated at $294 million. Online piracy, the most prolific method of piracy, has eaten into the revenues of all the films that Alliance has distributed over the past several years, including such noted Canadian films as De père en flic, Les amours imaginaires, Polytechnique and Bon Cop, Bad Cop.
Like independent films from around the world, Canadian films are financed from a variety of sources. One of the critical components in a film's financing are presales to film distributors. The amount the distributor will put up as an advance for an individual film is determined by expected revenue. This makes it more difficult for the producer to get the film made.
New digital distribution models are emerging and being embraced by consumers both in Canada and around the world. Netflix, Apple iTunes and Cineplex's recently launched digital service are examples.
Like most industry executives, I believe that digital distribution of feature films will replace DVDs in the next few years. Other innovative digital distribution models will provide consumers with a much greater range of choice than currently exists.
However, if piracy continues to flourish, these endeavours will be undermined. This will mean fewer films will get made, a weakening of Canada's production and distribution companies and significant reduction in jobs for the creative and support industries that make these films happen.
Thank you.