Toronto cinema says it was forced to cancel screenings over decades-old, unofficial ‘zone’ system

A downtown Toronto cinema says it was forced to cancel screenings of a new movie after the film’s distributor unexpectedly withdrew access — citing a decades-old practice in Canada that limits which theatres can show movies first. 

The Carlton had already sold tickets for its first week of screenings of ‘Tony,’ a new movie by Canadian director Matt Johnson, when it got word that distributor A24 would no longer be providing the film. 

“They ended up telling us that they were pulling the film because of a clearance issue,” said Stefan Kern, director of operations for Imagine Cinemas, which owns the Carlton. 

Clearance, Kern explained, “typically revolves around the fact that another theatre is playing it in a close proximity geographically and so [the distributor is] going to hold that film and not provide it to us.”

Independent theatres have long complained about the unofficial ‘zone system’ in Canada, in which distributors give only one theatre in a given area access to a new release.

 This is far from the first time this has happened, Kern added.

“This was the third film that we’ve had recently that was pulled from us,” he said. 

A decades old system that ‘privileges Cineplex’

According to Sonya Yokota William, director of the Network of Independent Canadian Exhibitors, the zone system has its roots in the pre-digital era, when studios would produce limited film prints of a movie, leaving theatres to jockey for who would get access first. 

Now, she said, “this practice has lingered, and you’ll find that it predominantly privileges Cineplex.” 

In Canada, Cineplex takes in about 75 per cent of the country’s box office revenue, she said. Of the country’s approximately 2,700 movie screens, more than half belong to the cinema giant. 

Yokota William says that Cineplex’s market concentration has “twisted the incentives” for distributors deciding which theatres to prioritize for new releases. 

“In some ways it’s like it only makes good business sense for you to keep your number one customer happy,” she said. 

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In 2024, her organization surveyed the independent cinemas that make up their membership, finding that more than half said they had to wait for a nearby Cineplex to have a complete run of a new release before they were given permission to play it. 

As Vancouver’s Rio Theatre described it in a 2020 petition calling out the zone system, “this kind of underhanded business practice has made it very difficult for independently owned theatres to survive.”  

Cineplex says that film distributors hold the power 

Cineplex, meanwhile, wouldn’t comment on the zone system in Canada or on the cancellation of the Carlton’s ‘Tony’ screenings, writing to the CBC that “it is up to film distributors to decide where they play their films.” 

At present, the movie is playing at two Cineplex locations near the Carlton. 

A24 did not respond to questions from the CBC about why it initially promised the Carlton access to ‘Tony’ — or what triggered its decision to pull the film.  

Kern, too, did not name Cineplex in his interview or in a release put out by Imagine Cinemas about the ‘Tony’ cancellations. 

Instead, the release encourages patrons to direct their comments to A24, film director Matt Johnson or to the Competition Bureau to “lodge a complaint about unfair business practices being used in theatrical distribution in Canada.” 

The Competition Bureau would not confirm whether it’s reviewing any complaints related to the zone system, and said it has never issued any guidance in relation to theatrical distribution in Canada. 

Though she supports looping in the Competition Bureau, Yokota William also hopes that raising awareness about the existence of the practice will help bring it to an end. 

“I would love for filmmakers, producers, funders and the government to start making noise about this, even if they can’t or don’t make legislation,” she said.