Canada's independent film distribution business is in a state of flux as two companies -- TVA International (TVAI) and Blackwatch Communications -- seek buyers for their distribution operations.

Montreal-based TVAI has confirmed it is looking for a buyer for its film and television distribution arm. TVAI has output deals with Fox Entertainment in television and a theatrical deal with France's Studio Canal. The Fox deal is understood to net the company a one per cent commission from Fox while the Studio Canal deal has borne little fruit at the box office.

Meanwhile, Andy Myers, former general manager of Toronto-based Blackwatch Releasing, is close to a deal to buy the business from Montreal-based Blackwatch Communications, which filed for bankruptcy protection in May. Blackwatch has an output deal with Sony Pictures Classics, which included such films as Crouching Tiger, Hidden Dragon and The House Of Mirth. Myers told Screendaily that "a deal would come to fruition in the next few days."

The Canadian independent distribution market is a tight space in which to do business. Indies hold about 20% of the local theatrical marketplace, with dominant Alliance Atlantis holding more than 75% of that share. But even that figure belies the lack of product available to a Canadian company without a sub-distribution pipeline like Alliance Atlantis' deals with Miramax, New Line and Artisan. The consolidation in distribution south of the border is making things worse. Blackwatch had an output deal with the recently-shuttered New York production and distribution company The Shooting Gallery.

As for TVAI, the writing has been on the wall since January when long-time distribution executive Jean Bureau left the company. At the AFM, the company announced it was winding down its international sales operations.No one from the company was available for comment.

The company is a subsidiary of TVA Group, whose takeover by Canadian publishing and communications conglomerate Quebecor was recently approved by federal regulators. At the AFM, industry sources had suggested the distribution business would not survive long under Quebecor's watch, given that Quebecor would be looking to cut costs following its $3.3bn acquisition of cable company Groupe Videotron, TVA's original owner, in September 2000.