Sturla Gunnarsson, Part 2: Distribution and the role of Public Policy

Interviewed by Evelyn Ellerman at Toronto on March, 2012

Ellerman. In the 1980s, there was a lot of passion amongst the young filmmakers that took that nation-building approach. But, we live in a very strange country, where most Canadians don't see most Canadian made films. How were filmmakers thinking about the problems of distribution at the time? Did people having notions of what could be done about that?

Gunnarsson. To start with, we were just excited to create something. It was just that simple. And then things like the TIFF (Toronto International Film Festival) came into being, and the Vancouver Film Festival and the Atlantic Film Festival. So that became a big part of our reality. And there was always television, although there was always a strange disconnect between the National film Board and the CBC, which is actually one of the tragedies of Canadian public policy. I made the first CBC-NFB coproduction, After the Axe (1981). And then I followed that with Final Offer (1985). But they were both anomalies. But that is a subject really worth exploring: the role of the public broadcaster in this whole experiment.

Distribution was challenging, but it was possible if they were breakthrough films. There were films like Nobody Waved Goodbye; there were a handful of such films, and there was always Québec that you could look to and say, “See? It is possible.” But back in the 80s, it was an era of independent filmmaking; and I think you always have to remember that when you're talking about the Canadian project. Essentially, we were, and still are, making niche films. These films are not mainstream Hollywood movies. Judging them against those movies in terms of box office performance is a mug’s game. The only sane way to judge the performance of the Canadian film is relative to other films made in the same budget range with the same aspirations. Now, you're talking about independent American films, independent European films. Canadian films penetrate the Canadian market in a fairly competitive way relative to those films.

Back in the late 70s, early 80s, Canadians had an appetite for independent films. If you made a good film, you stood a good chance of landing some screens in a climate where you had it for more than a weekend and where, if the film performed, and even if it didn't, if people believed in it, they would keep it going for a while. A lot of films built a career in that climate. That all changed in the 90s when both Canadian and North American viewing habits changed and we moved into an era of more conservative governments that wanted to see measurable returns on investment. So, the fact that you were making something that had intrinsic value didn't cut it anymore.

The big distribution disaster was that we almost achieved screen quotas. That would have been Brian Mulroney's era. Flora MacDonald was the culture minister. The whole industry had lobbied; we just wanted a little piece of the screens dedicated to Canadian film. I say we, but I was just a kid. In any case, I identified with it. And it came very close. The Bill was in its second reading on the floor, when Jack Valenti who represented the American movie industry, came and explained the facts of life to Brian Mulroney. And all of a sudden the Bill was withdrawn. And the quid pro quo at the time was that they said, “Here's how we're going to solve this problem. We are going to create a distribution sector.” Creating a distribution sector that's viable will create a market for Canadian authors and Canadian filmmakers. So, resources shifted into the protection and promotion of distribution companies. They separated the Canadian market from the American market for all but the majors, who had been grandfathered in. (Now, of course, there are a lot of mini majors). So, they created these companies whose stated purpose was to solve the problem of nation-building, but the law of unintended consequences was that they created companies whose business model was built on distributing American films in Canada. They really just became replicants of the problem that we had in the first place, which was that they thought Canadian film as a nuisance, something that they had to deal with as a cost of doing business.

Those are the roots of the era in which we find ourselves now, where.... I keep thinking of the Cuban film Memories of Underdevelopment (1968), because we have this bizarrely colonized cultural mindset. And now we have this idea that Canadian feature films need to achieve a certain amount of box office in order to validate themselves. That's a real challenge, because if you look at the films that have achieved box office, it's all relative to what's spent on releasing them. So now you have a system where theoretically the marketplace is determining what's happening, but in fact it's a very small group of people that decide which films are going to get the resources to put them out there, to spend $2-3 million releasing it in order to get $2-3 million back. And that we call success!

E. What do you think of the role of public policy in Canadian filmmaking. Around the world, public policy is very important. But we happen to live next to a country where, as you say, there's more of an entrepreneurial model. It's very difficult to live beside the elephant. But Canada has been quite proactive over the last 30-40 years in trying to develop public policy to ensure that there is a film business. Talk about that nexus between public policy and filmmaking.

G. The basic business model for screen-based industries everywhere -- this is not just a Canadian problem -- the business model is that you have to return your investment in your domestic market. Then, whenever you sell abroad is the profit. Screen-based entertainment is sold at a deep discount abroad. American films are sold at a deep discount in Canada; Canadian films are sold at a deep discount where we sell them. That's the business model. Were not manufacturing cars. The cost of manufacture is all in the creation of copyright, the creation of the artifact. The reproduction is a negligible cost. Therefore, you recoup your costs in your domestic market and then you export it. That's what the United States does, that's what India does.

The countries that can't achieve a return on investment in their domestic market either decide not to have audiovisual industries, or they decide to invest in them; it's in the national public interest to have those sectors. And the governments invest. Either way, whether it's in the form of the public investment, or in the form of a public policy that creates investment, or in red meat capitals like Hollywood and Bollywood and China... these are really the only three countries that have genuinely free market audiovisual sectors. All the other countries have public policy in place.

Canada borrowed much of its approach to public policy from studying the UK and France. We had a lot of visionary policymakers like Pierre Juneau, who just passed away. So, that's what we've built. And I always like to say that people who work in our sector that deny the value of public policy are like beet farmers who have a few acres of land at the base of the Hoover dam. Every now and then, they look up and say, “I wonder what's behind that.”

Sturla Gunnarsson, Part 3: The Role of the Directors Guild in the Struggle to Secure the Rights of Content Creators