Universal Ends Distribution Agreement With Alliance
Alliance is now setting up its own distribution network in Canada.
Universal’s home entertainment division has ended its two-decade-long distribution agreement with Alliance Entertainment in Canada, which is now setting up its own distribution network there. Canadian customers have already been notified of the separation, which takes effect July 1, sources close to Universal say .
Insiders say the change also was prompted by a steady decline in revenue generated from the sale of Alliance product, which at one point was responsible for upwards of $250 million a year. But with some of Alliance’s top sources of product, including New Line (now part of Warner), no longer with the distributor, sales in recent years have been under $100 million.
In light of the separation, Universal also is restructuring its Canadian operations to be more in line with those of other studios, the source said. Universal is reportedly the only one of the six U.S. majors to still maintain an expansive Canadian operation instead of just a smaller, sales-oriented team, but effective May 26, that is changing to accommodate the decrease in Alliance product. Workforce reductions will be staggered and begin June 30, continuing through the end of the year. About 40 positions will be eliminated, the source said.
When contacted for comment, Universal officials offered the following statement:
“Universal Studios Home Entertainment has terminated its long-standing arrangement with Alliance Films to distribute home entertainment products in Canada. This move best satisfies Universal’s current business needs in the territory. As a result, we are adjusting our workforce in Canada to accommodate this transition. Going forward, Steve Dorman will remain Executive Vice President and Managing Director and will continue to effectively lead Universal’s Canadian home entertainment operation.”
Universal is coming off a strong fourth quarter, led by Despicable Me. The studio also has three major theatrical features in the home entertainment pipeline, including Hop, Fast Five, and Bridesmaids.