Genius Consolidates Wellspring Distribution22 Feb, 2006 By: Erik Gruenwedel
Genius Products Feb. 22 announced it would relocate distribution operations for the 700-title Wellspring Home Entertainment unit to its Santa Monica, Calif., headquarters, thereby saving about $1 million in annual overhead expenses.
It is unclear how many employees of New York-based Wellspring are affected by the transition or if the unit would maintain an office there.
Genius, which last year became the U.S. home entertainment distributor for The Weinstein Company (TWC), also announced all domestic Wellspring theatrical titles would be distributed by TWC, which owns a 70 percent stake in Genius.
“This realignment supports an aggressive acquisition campaign to build on the Wellspring brand with critically acclaimed films that celebrate intelligent cinema, while at the same time, supporting our strategy of … focusing on the sales and distribution of higher margin, packaged entertainment products at retail,” said Trevor Drinkwater, Genius' CEO.
Speaking at an investor conference Feb. 21 in Dana Point, Calif., Drinkwater reiterated plans to distribute 20 TWC theatrical films on DVD in fiscal 2006 and generate upwards of $16 million in net revenue per title. He also expects to generate between $20 million to $30 million in net revenue from an undisclosed number of direct-to-video releases, including content from the Independent Film Channel.
Drinkwater expects to double 2005 annual net revenues of $15 million in fiscal 2006 based on a “retail-centric” business model.
When asked why TWC namesakes Bob and Harvey Weinstein — co-founders of Miramax — chose to partner with Genius, Drinkwater said he believed the brothers were looking for greater control of their home entertainment content, which the major studios didn't offer.
“Here they can decide which HD format they want to be in and which release window they want,” Drinkwater said.