Q&A: Charles Layton


Charles Layton is used to being the power behind the throne. He worked at Harvey Weinstein's side first as executive vp of Miramax Films and then at the Weinstein Co. Before Miramax, Layton was COO of Douglas/Reuther Prods., Michael Douglas' Paramount-based shingle. Now he's come to Canada as president of Montreal-based indie movie distributor Alliance Films, led by veteran local player Victor Loewy as executive chairman. Layton took the job in August 2007, soon after the company was acquired by Goldman Sachs & Co. He talked to THR about his latest challenge: to get Alliance through an industry shakeout and the market downturn as a bigger, diversified player.

The Hollywood Reporter: Alliance has looked beyond a mature Canadian market to Europe to build out a multi-territory distribution network. After Britain and Spain, you're in the running for TF1 International. What other European markets are you looking to enter?

Charles Layton: We are no longer looking at TF1, although we remain interested in France. With regard to expansion generally, our focus is on Western Europe. In the worldwide financial upheaval, we think there are going to be some interesting opportunities for stable companies, so we are going to be selectively looking for opportunities in the coming months.

THR: You've turned the credit crunch to your advantage by buying back about $400 million in debt at a discount. How did that deal come about?

Layton: As everyone knows, there is a worldwide hunt for liquidity. So market conditions made it possible for us to buy the debt at a discount. We have a supportive board and shareholders who believe in the business plan and are happy with the results we are producing. They agreed to provide the wherewithal for the buyback. It puts us in a position of great strength in this time of upheaval, which is without precedent in our lifetime. We're very grateful.

THR: Are you competing more with Canadian rivals Entertainment One and Maple Pictures as domestic rivals or with the major studios and their releases in Canada?

Layton: Everybody competes with everybody. It happens every weekend when every distributor competes with every other distributor for boxoffice.

THR:What is your market share in Canada, and how will you grow it?

Layton: For 2008, in Canada, we have 14% boxoffice market share through November. That's fairly consistent with our 16% in 2007. I can't really say that we're looking to grow our Canadian boxoffice market share per se. Our share has been in the rank of the top two or three distributors, including the major studios, for many years. I would say that what we are looking to do -- and again, this is not unique -- is to continually improve our profitability and to distribute the best pictures available in the marketplace, in Canada and in other territories.

THR: Has the production slowdown caused by the threat of a SAG strike helped or hindered your release plans?

Layton: Neither, really. Between Canada and the U.K. and Spain, we expect to release about 100 pictures theatrically in 2009. And I don't notice the theatrical marketplace getting any less crowded yet. Do you?

THR: As film distribution increasingly moves online, is Alliance moving into the multiplatform world of releasing?

Layton: Of course. We will exploit our films aggressively on every available commercial platform. We're the first Canadian film company to make a deal with iTunes, as one obvious example. In marketing, we have been moving an ever-increasing portion of our media buys and grassroots promotions to online environments.

THR: Is Alliance doing any service deals, where you take a fee for distribution services to hedge your risk against paying out for a boxoffice bomb?

Layton: Yes, of course, but it is not a hedging strategy on our part. At Alliance, as it was at other places that I have worked, it's a response to a producer's desire (and financial ability) to work with a particular distributor and participate as fully as possible in the upside when the picture performs.

THR: Is Alliance all about theatrical distribution to drive ancillary sales, or do you do straight-to-DVD or straight-to-VOD deals?

Layton: Most of our business is theatrical releases, but we release a significant amount of product direct to video each year. We have 235 DTV releases scheduled for 2009 across our three territories. We have not done anything direct-to-VOD and have no plans to as the market doesn't support it. Yet.