OBSERVATIONS OF A CANADIAN MULTINATIONAL: THE U.S. EXPERIENCE
Garth Drabinsky Chairman, President and CEO of Cineplex Odeon Corporation
Chairman: Nona Macdonald President
Garth Drabinsky is a phenomenon. To prove the use of this superlative, let me define first the word then the man. Phenomenon means many things: prodigy, wonder, marvel, miracle, manifestation. Drabinsky means many things: business, law, films, theatre, author, publisher, young, Canadian.
Thus Garth Drabinsky is indeed a phenomenon-and for those skeptical about superlatives, let us begin thirty-seven years ago when Garth Howard Drabinsky first entered the world with the help of a physician who was, as fate would have it, related to another movie mogul, David I. Selznick. Did Providence play a part or did a childhood bout with polio motivate the determination and achievement that marked his development? He completed high school as president of the student council of North Toronto Collegiate, and after Commerce and Law studies at the University of Toronto, he was called to the Ontario Bar with honors.
Simultaneously, he had been publishing cinema journals and producing television programs. By 1967 he had written his first book, entitled, Motion Pictures and the Arts in Canada, the Business and the Law. Together with his mentor, Nathan Taylor, he founded Pan-Canadian Distributors, now Canada's largest film outlet.
His first film productions won awards and featured Hollywood stars. Both The Silent Partner and The Changeling garnered the Canadian vote for best picture of the year. George C. Scott, Melvyn Douglas, Elliott Gould, Christopher Plummer, Susanna York, Lee Remick and Jack Lemmon are among the talent employed. Numerous Canadian and American film productions are made at his International Studios, Canada's largest film studio complex.
But all this doesn't deter him from being a good corporate citizen. He volunteers his expertise as a board member of the Academy of Canadian Cinemas, the Toronto and Vancouver film festivals and the National Theatre School of Canada. As befits a phenomenon, Garth Drabinsky has been an "angel" backing theatrical ventures in Canada and the United States, but it is his business enterprise that is truly phenomenal, indeed mammoth and colossal!
Through acquisitions both here and in the U.S., Cineplex Odeon is now the largest motion picture chain in North America with 1,400 theatres in 460 locations. Teams of architects and designers have restored and renovated old movie houses or built new ones. They feature luxurious interiors, many enhanced by works of many of our own Canadian artists.
Incidentally be it known that our popcorn table treats today are from another division of Cineplex Odeon. And so, a showbusiness welcome is due a man who is a "multi-talent" in himself: lawyer, impressario and entrepreneur. Will the real Garth Drabinsky please stand up and come to center stage?
For the past two years, not by choice but because my business life so dictates, I have been travelling almost constantly throughout Canada and the United States. I have spent literally hundreds of hours, most often all by myself, in a small jet, flying to and from obscure communities the scheduled airlines have never heard of-from Kingston, Ontario, to Kingsville, Texas, from Prince George, British Columbia, to Petersburg, Virginia, from Ocala Springs, Florida, to Odgen, Utah.
I have found these long periods of enforced isolation conductive to thinking, and I have found myself comparing these two countries. Of course, every Canadian worth his salt devotes time and energy to trying to understand their similarities and their differences-it's the great Canadian indoor sport-but the subject fascinates me even more than most, because my company operates theatres and distributes pictures in both countries and so relies heavily on the inhabitants of both to support its continued growth and vitality.
It is, therefore, not surprising that I often find myself using these really precious quiet moments to ask myself basic questions and to reflect on their answers-questions such as: What factors mould the soul of a country and the inner fibre of its people. What factors result in a country's striving for greatness. Is it pride in what has already been achieved? Is it awe at what remains to be done? What is it that forms the vision of a nation at a particular time in terms of what it wants to accomplish. What leads its constituents to act with vigour and enthusiasm? What moves them to talk joyously, rather than dolefully, about the quality of life?
What can be learned from people's attitude to discipline, or their commitment to hard work, or their determination to improve their standard of living, or their will to develop an intellectual climate in which creativity can flourish in every field of human endeavour? In other words, what brings about an age of renaissance, when minds are flourishing and the tides of inspiration are running high?
Clearly no single factor, no one combination of factors, can provide the answer. There is no general theory of economic or creative growth to which all case histories conform, whether one is trying to account for an industrial revolution or a new movement in the arts.
But certain factors are advanced again and again and must be considered as any country's basic minimums-a favourable natural resource position; a religion that stresses dynamism rather than contemplation, and sees nothing wrong with either capitalism or hard work; a stable and rational legal system.
Given such basics as these, a nation ought to be positioned for experiment and innovation, and ready for economic growth. This, in turn, should lead to the appearance of an entreprenurial group, men and women of unusual moral energy and exceptional boldness and determination, under whose charge new sectors of the economy can be developed, and new products and services, and new methods of producing and delivering them, can be introduced. Such men and women are the shock troops of economic and cultural change.
There are other factors, too. Some, like Japan's prime minister, Yasuhiro Nakasone, say that a monoracial society has an advantage-apparently because everyone thinks alike and can work together more efficiently. Others think a multicultural society is best, with each group stimulating the other on to greater achievements. The supporters of this latter view, of whom I am one, point to the fact that the Japanese have won fewer than ten Nobel prizes and the Americans more than a hundred.
Some think that climate is of great influence, and that those who are lucky enough to live where the seasons change from bitter cold to suffocating heat benefit from the stimulation that comes from having to battle the elements, while those who live where the seasons vary little, and the comfort level is generally higher, tend to get lethargic.
And some think it is all a matter of time. Nations and empires rise and fall. History records that they gradually ascend from their primitive stage through to their age of grandeur-and then, ineluctably, they fall back to mediocrity and impotence.
One thing is certain: no society whose people can be described in the words of Goethe as "specialists without spirit, sensualists without heart," can be expected to advance itself. Rather, such a society will languish in the doldrums forever.
We who are fortunate enough to live in Canada at this very moment would seem to be poised for greatness: we are second to none in the heterogeneity of our racial mix; no country has a more rigourous climate; and all agree that we have not yet reached our ultimate potential.
Many used to say that the twenty-first century would be
Canada's. Can we still expect to attain this goal with any measure of confidence? Collectively, we seem all too ready to give up our dreams of greatness and settle for a comfortable existence. The very factors that should urge us on to the top are those we seize upon as excuses for remaining where we are.
As to climate, we say that the country is livable only within a one-hundred-mile strip along the American border. No one mentions former Prime Minister John Diefenbaker's Vision of the North any more, though it gained so much political currency in the sixties. As to our mixed races, instead of revelling in the richness and variety of the cultures we can draw upon, we deplore the difficulty and expense of making the country bilingual for its two founding language groups, each more concerned with preserving its linguistic privileges and prerogatives than in working together in the interest of Canada as a whole.
And if, as Shakespeare said, "There is a tide in the affairs of men which, taken at the flood, leads onto fortune'-well, we seem to have missed that tide. Although Canada emerged from World War 11 as the second-richest of nations, with a considerable industrial base, we have now been overtaken by at least half a dozen others.
But what most stifles our creative initiatives in this country is surely our negative attitude towards ourselves. Unlike Americans who revel in their successes, our successes tend to embarrass us. Unlike Americans who exalt the human spirit, we tend to repress it. Americans love a winner. They unabashedly applaud vision and boldness. Canadians prize those who conform to the norm.
On every hand, and with respect to every phase of our lives, you hear Canadians talk about their inferiority complex. Nay, more! They talk about themselves, without any real cause, not as if they have an inferiority complex but as if they were really inferior.
There are, of course, reasons (or are they excuses?) for this national state of mind that stem from the way the country developed.
One is that Canadian society, as we now know it, was created by a large number of immigrants moving into vast, vacant geographical areas. These Canadian immigrants were never absorbed into the Canadian psyche so as to bolster national esteem and a distinct Canadian identity. Many came to Canada as a less-desirable alternative because their first choice, usually the U.S., was not open to them. Although their new country was preferable to what they had left, they did not let go of their roots-they clung to them. In the United States immigrants dissolve into what June Callwood has called "a melting pot of bubbling assimilation." In Canada, the respective cultural elements remain distinct; they never merge into a strong coherent whole.
Then, there is the almost overpowering influence of the United States. The American example of economic success unparalleled in history has exerted an enormous gravitational pull on the people of Canada. It urged them to emulate the American example, to attempt to mimic the methods that had made the U.S. a leviathan. It also generated in Canada a loss of identity, a fear of eclipse, a fear of being overwhelmed by American economic and cultural imperialism, so that our ancestors began to betray that curious negative psychology that is characteristically Canadian. They struggled to build a northern nation that was almost by definition anti-American in response to American predominance on this continent. Yet, at the same time, they felt driven to attempt to gain access to American markets and to copy the American success story. And so that dichotomy that has always marked our approach to life was established.
We Canadians have always thought it bad form to talk about our achievements; not only that, we have never seemed to want to hear about the achievements of other Canadians. We especially have difficulty in according praise, however well merited, to young men and women who have not yet become part of the Establishment, but who manifest zest and passion in pursuance of their entrepreneurial objectives. Envy of
success remains one of the most evident of Canadian social traits. Although a growing number of Canadians know when something is good or excellent, for the most part the recognition, or at least the confirmation, of excellence must come from a portfolio of laudatory foreign press clippings.
There has always seemed to be less optimism here, less faith in the future, less willingness to risk capital or reputation. Contrasted to the U.S., Canada has been a country of caution, reserve, and restraint. Canadians have been riskavoiding financiers rather than risk-taking entrepreneurs.
I take great exception to the fact that all too many Canadians still feel reassured and nod knowingly when some Canadian businessman gets outfoxed in a foreign deal. It sometimes seems to me that every Canadian knows about and takes perverse satisfaction in these sorts of business events:
1. That Canadian Tire dropped $44 million on its U.S. chain, White Stores.
2. That Daon and Nu-West, having purchased substantial U.S. real estate interests at inflated prices, were compelled to sell out in a market of depressed prices, with, of course, horrendous economic consequences.
3. The Maislin Trucking bankruptcy.
4. Hiram Walker's $200-million miscalculation on the purchase of the Davis Oil assets.
And with all the conviction I can muster I say that there is no reason to perpetuate this national pessimism that has inhibited our imagination for decades.
I have had ample opportunity to study American attitudes, work habits, mental process and-finally-their accomplishments. It is not mere chauvinism that leads me to the conclusion that Canadians have not the slightest reason to feel inferior. One admires the Americans for their exuberance, their self-confidence, their willingness to take risks, their bland assumption that some country must lead the world and theirs just happen to be the one to do it.
But wait a minute! There are many things Canadians do better, and many Canadian attitudes that are more conducive to higher achievement.
All over the United States, Canadian real estate developers are reshaping the urban architecture of America. Olympia & York has become one of New York's largest landlords and has devised remarkably imaginative plans for rejuvenating that city. Cadillac Fairview has repeated its unparalleled Canadian success south of the border in creating the ultimate in shopping centre environments. Canadian architects such as Arthur Erickson, Eberhart Zeidler, Raymond Moriyama, and Boris Zerafa, are demonstrating to America inspired new approaches to redeveloping city blocks.
Other Canadian corporate success stories that have brought lustre and glory to our country spring readily to mind:
1. Rogers Cable and Maclean Hunter, who control U.S. cable enterprises serving hundreds of thousands of subscribers.
2. Bombardier, which has developed a new design of diesel locomotives and is competing head-on with the goliath of North America, General Motors.
3. The Four Seasons Hotel Group, which builds major luxury hotels and operates them to impeccable standards throughout the United States and Europe.
4. Northern Telecom, which has become the secondlargest supplier of communications equipment in North America.
5. The Thomson Newspaper Group, whose holdings continue to proliferate in the United States.
6. Magna International, a diversified manufacturer of parts for the North American automotive industry.
7. George Weston Limited, a huge wholesaler and retailer of food right across the continent.
8. Moore Corporation, the largest producer of business forms in the world.
As a result of the efforts of the successful businessmen who run these corporations and the new generation of young men and women like Alfred Sung, Lise Wattier, Michael Bregman,
Peter Nygard, and Michael Budman, who exemplify youthful confidence and verve in all that they do, we in this country can now look to other Canadians as role models-men and women who are generating our own native brand of entrepreneurship-the link that has been missing so far in the Canadian equation of economic growth.
May I suggest several reasons for the success Canadians have achieved in the U.S. markets: by and large, Canadians take greater pains, set themselves higher standards of perfection, and then uncompromisingly work to those standards.
In everything they do, Americans cater to a much larger market than do their Canadian counterparts. This fact alone gives them a much greater chance of success. The limits of tolerance, the margins for error are much coarser and broader. They can therefore afford a greater degree of carelessness, even sloppiness, than Canadians can permit themselves if the latter are to sell their goods or their services into their much more restricted marketplace. Canadians seem to take this in through their pores at an early age-the fact that they must work more diligently and more skillfully. It also accounts for the fact that when Canadian corporations, having achieved success at home, take the battle to the Americans in their territory, they enjoy a competitive advantage.
From my own observations, Canadians try harder to cultivate such attitudes as pride in, and enthusiasm for, the organization, a livelier concern for how their customers will perceive the service and quality being provided, higher and purer standards of integrity, constant mindfulness of moral values. All of these characterize our corporate efforts in the United States and help us to attain excellence and achieve success in the U.S. marketplace.
I believe that the case history of my own company, and that of the industry it forms part of, will provide further evidence of the conclusion that Canadian entrepreneurs, professionals, and craftsmen are capable of performing higher levels of achievements than their opposite numbers in the United States.
The motion pictures on the screens of North America today are the end-product of a history of tumultuous development that is still taking place. The successes of Lumiere and Edison in photographing objects in motion in 1896 led to the first primitive movies, which were shown in the U.S. and France in what were then called Kinetoscope and Cinematograph parlours. Crowds in both countries flocked to see this new sensation.
As the technology developed, and cameras, film, and projection devices were swiftly improved, astute businessmen just as swiftly came to realize the money-making potential of charging the public modest amounts to see films. The early years of the industry were marked by attempts of a motion picture trust, established in 1908 by the holders of various patents, to create a monopoly that characterized the industry's relations among its members in a manner that persists right up to the present day.
This trust engaged in crude and oppressive business practices that fostered resentment and discontent. Eventually, its control of the industry was undermined by the growing number of independents that sprang up all over North America in production, distribution, and exhibition. From the ranks of these same independents emerged the founders of companies that were later to become Hollywood's giants: Carl Laemmle, founder of Universal; William Fox, founder of Fox Films, which later combined with Twentieth Century Pictures to create Twentieth Century Fox; Adolph Zukor, who came to dominate Paramount Pictures; and Marcus Loew, who formed MGM.
At about the same time, the production industry moved west from New York City to Los Angeles, although New York remained the industry's financing capital.
From the yeasty ferment of growth and change that was the movie industry in the first quarter of this century, emerged the motion picture palace, a creation of awesome beauty to all who beheld it.
Most of these palaces were built between the First World
War and the Great Depression, in the age of frivolity and naive optimism that ended so abruptly on a black Thursday in October 1929. The largest cities and the smallest towns soon boasted regally outfitted movie houses that spelled out fun, enjoyment, and escape to the millions of that era who wanted so desperately to lose themselves in make-believe.
The theatres ranged in style from those that were bewilderingly eclectic to those that were near-perfect replicas of European castles, Oriental palaces, and the Mayan tombs. Even the Hanging Gardens of Babylon were incorporated into theatre design. Paintings by the old masters lined the walls of the grand foyers.
Outside facades were set ablaze with electric lights flashing incessantly to attract the susceptible to these peculiar new emporiums where dreams were always for sale for a pittance. So elaborate were they that Marcus Loew, head of the largest chain of these remarkable structures, could truthfully state: "We sell tickets to theatres, not movies."
As the twenties came to an end, sound was introduced to motion pictures, on the eve of the Great Depression. During the time of economic collapse that followed the crash, the large sums required to install sound equipment could only be provided by the banking giants of the East Coast.
And it was no coincidence that the companies they most favoured were those that manifested the most vertical integration-those that controlled exhibition, distribution, and production. And those companies proved to be the ones that survived the depression period intact-Warner Bros., RKO, Twentieth Century Fox, Paramount, MGM, and the thensomewhat-smaller Universal and Columbia.
Under the financial constraints of the Depression, theatre owners and their architects had to modify their moregrandiose designs and the golden age of picture palaces came to an end. Art Deco was adopted, mostly as an economic measure, a respectable attempt to maintain quality of design without profligacy.
All the while the aforementioned eight major studios maintained a measure of control over the business that the organizers of the early trust would have envied. In 1938, and again in 1944, in response to complaints of disgruntled independent theatre owners, the Justice Department brought actions charging the studios with illegal conspiracy to restrain trade.
In 1948, a Consent Decree was signed that finally separated production and distribution from exhibition. It was this decree, as much as the emergence of television and the fragmentation of audiences caused by other media, that brought about the decline of theatre audiences and ushered the movie business into the modern era.
Once divested of their theatres, the studios realized that they didn't have to supply a new picture each week-the resulting shortage would not be their problem but that of their successors in ownership of the theatres they had been forced to sell-and the studios reduced production schedules substantially. Movie admissions began a steep downward slide.
The multi-thousand-seat palaces of the 20s began to slip into the red. Dozens of once-prosperous landmarks, like the Roxy in New York, were demolished all over the continent, in solemn witness to the passage of an age. The list of theatres taken down to make way for office blocks, hotels, or that great menace to all historic structures, the parking lot, grew long and heartbreaking. The once proud Granadas, Strands, Rivoli's, Tivoli's, and Orientals stood no more.
Perhaps one of the most significant aspects of the 1948 divestiture, and one that has not been heretofore recognized as such, is that the businessmen who purchased the circuits from the eight major studios were a much different breed from the flamboyant but knowledgeable characters who had built them. They were not impresarios. They had little appreciation of the kind of ambience a theatre must provide to maximize the effect of a motion picture. Make no mistake, the almost chemical effect with which a good motion picture alters the mood of its audience can be dissipated or destroyed if it is shown in the wrong physical setting.
These new, and, in many cases, inexperienced owners, failed to realize that the fun of movie-going includes more than just seeing the film. It is the subtle blending of a series of pleasurable stimuli-the initial anticipation, the feeling of elegance, the congeniality of the surroundings-these are what establishes the final satisfaction, the total experience.
The day of the entrepreneur and showman in the motion picture exhibition industry had passed-at least for a time. These new owners were, at the outset, concerned almost exclusively with extracting the maximum cash flow, notwithstanding the depletion of assets, and, as they grew older, they became more and more preoccupied with planning their estates. Such new theatres as were constructed in North America were either inferior and ill-planned splits of properly proportioned auditoriums, or brand-new multiplexes with drab, antiseptic, uninspired interiors.
Few owners had the perception to envisage re-designing the surviving palaces of the golden age in aesthetically satisfying ways to create a new form of multiplex without surrendering the glorious features of the original. For almost forty years, the same dead concepts and designs were reproduced slavishly whether or not they served the true needs of theatre patrons.
It was this atrophy of the U.S. exhibition industry combined with my company's urgent need to expand in the U.S., because we had reached virtually to the end of possible expansion in Canada, that provided Cineplex Odeon with its window of opportunity.
Today, we are the largest theatre circuit in the world. We recognize that motion pictures represent the greatest cultural revolution since the invention of the printing press and that we are in many ways the custodians of an important part of the social fabric of the two countries in which we operate.
We take very seriously our responsibility for the long-term viability of our industry, and for making sure it remains an important part of the life of North Americans. And so we are
heavily engaged in an expansion and refurbishing program in nineteen American states and six Canadian provinces.
In this, we are guided by our determination to engender a renaissance in theatre design and construction that will bring back to our patrons the rush of excitement, anticipation, and curiosity that should be theirs when they leave the technoregimented world of their daily lives for the fantasy world of escape that is the movies.
We are striving for originality and new approaches-to demonstrate to our patrons and our industry that there can be a sharp sensory pleasure in going to the movies, a perceptible thrill that has been missing, at least in part, for the last forty years. Whether we have achieved at least some measure of success can perhaps be best judged by the awards we have won, the favourable notices and comments that have appeared in the most influential newspapers and magazines of both countries, and the votes of the audiences to whom we are appealing, registered in great numbers every day at the box offices of both our new and our renovated theatres.
To sum up, a new day has dawned for Canada. In view of our obvious accomplishments, there is no need for us to lack confidence, drive, and national verve. If we continue to do so, we will condemn uncounted future generations to limited horizons with no alternative but to leave the land of their birth for more challenging opportunities elsewhere.
And we simply cannot afford to keep on losing our excellent people in all fields of creativity. We must not allow a slow internal erosion to develop through a narrow-minded outlook. We must not retard either the economic or the psychological development of Canada. We must ensure that this unique country realises fully its economic destiny and its unlimited ability to contribute to the whole world's development. We must keep on proclaiming our confidence in our ability to compete internationally. We must believe more and more profoundly in ourselves.
Former U.S. President Franklin D. Roosevelt once told his countrymen
"The only thing we have to fear is fear itself."
I say to you today: the only thing we Canadians need feel inferior about is our well-known inferiority complex. It saps our will and stands in the way of our achieving all those wonderful things that are well within our capabilities.
Let us rather, revel in and speak proudly of our recent accomplishments, not only in business but also in the humanities and sciences, let us cheer mightily at the recognition accorded Canadian co-winner of the 1986 Nobel Prize in chemistry, John Polanyi; let us aspire to greatness; let us go on to ensure that the next century really is Canada's.
The appreciation of the meeting was expressed by Miss Lindsay Shaddy, policy analyst, Canadian Bankers' Association, and a Director of The Empire Club of Canada.