Canada will be the next self-sustaining movie market, Lategan Media Group President Stephen Lategan has predicted, which would mean a proportionate share of North America’s $10.5 billion box office for domestic films.
“This will happen by applying the strategies that created self-sustaining film markets like those in the United States and India,” he said, “Canada has proven to have production resources equal or better to those locales and can duplicate their success.”
According to Lategan, the “gold standard” set by Hollywood is that the marketing budget should be equal to that of the production budget. Because of the accessibility of films through an ever greater number of venues (Netflix, DVD, pay-perview), there is a larger demand for such entertainment. But the demand for individual films is still driven by the marketing of their theatrical release through billboards, TV spots, theatrical trailers and print ads.
Based on past Canadian box office statistics, namely the return on the P&A investment, Lategan believes it is possible to predict the response that one can “buy” at the box office. He states the average as 3:1 on the marketing dollar, such as Canadian examples like “Mambo Italiano” ($5.5 million box office return on its $1.6 million P&A) and “Men With Brooms” ($4.2 million on $1.5 million P&A). Some perform even better, like “Bon Cop, Bad Cop,” which saw a $12.7 million return on its $2.75 million P&A spend, but no one can accurately predict those kind of numbers.
Lategan’s strategy lies in the problem with films like those referenced above being that their production budgets exceed what can typically be recouped in the Canadian market. Technology today allows filmmakers to create a professional product on an affordable budget. By keeping the overall spend (production plus P&A) well below projected returns, the company removes what Lategan refers to as “gambling” on the movie being a hit. What’s more, the box office take need only be a fraction of what big studio pictures require to make a profit.
CHCH has signed a licence agreement with LMG for a behind-the-scenes special looking at the financing process of an independent film. Cal Millar, President and COO of Channel Zero, owner of CHCH, embraces the new business model.
“When I was presented with Stephen’s business plan for Lategan Media Group,” says Millar, “I was immediately impressed by the thoroughness of his research and his commitment to change the way feature films are produced, marketed and distributed in Canada.”
“We want to help a variety of independent pictures reach their box office potential,” says Lategan, “We think this will become the model for the Canadian industry and Lategan Media Group intends to get there first.”