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Six Questions: Inception Media President David Borshell

1 Jul, 2010 By: Erik Gruenwedel

David Borshell

Inception Media Group, the Santa Monica, Calif.-based distributor co-founded by former Image Entertainment president David Borshell, in June reported closing its first revolving credit facility with City National Bank.

Inception said it would use the funding for operations and acquisitions, including distribution rights to cast-driven, below-the-radar movies for physical and digital distribution. Key acquisitions to date include feature film 2:22, starring Val Kilmer, as well as two Hallmark Channel Original films, Growing the Big One, starring Shannen Doherty, and Mrs. Washington Goes to Smith, with Cybill Shepherd.

Home Media Magazine caught up with Borshell to ask about bowing a new supplier at a time when traditional channels for packaged media are undergoing evolutionary change.

HM: Is the home entertainment market bypassing packaged-media sales in favor of rental, or does the 28-day window imposed by several major studios keep the retail component viable?

Borshell: I don’t believe there is a studio or independent distributor out there trying to bypass any revenue streams. Sure, past decisions had a negative effect on the rental market, but recent changes implemented at the studio level have provided boosts to rental where there was recently weakness. The 28-day window will help the retail component of our industry, but it’s probably a bit premature to determine its long-term success. Ultimately the viability of the retail part of the business will be determined in many ways by the ongoing support, or lack thereof, that retailers provide in the way of shelf space to the packaged-media format.

HM: What do you think of $1 rental kiosks? Can the industry put the lid back on that Pandora’s Box?

Borshell: The kiosk business has become a significant revenue stream for many content suppliers. Unfortunately, it has also decreased the perceived value of the DVD. Can that be changed? Probably not. Consumers will continue to become far more selective as it pertains to what product is deemed a ‘must own.’ Unfortunately, as time goes on, the number of titles that fall into that category will inevitably diminish, thus putting additional pressure on the retail market.

HM: How important is the growing high-definition format Blu-ray to Inception?

Borshell: The Blu-ray Disc format is important to Inception and the home entertainment industry as a whole as it provides growth and sustainability of the packaged-media format. With that said, independent suppliers like us are faced with an economic decision, as all aspects of releasing on Blu-ray, in addition to a DVD, are often at times a financial challenge. As sales and rental of Blu-ray product grow, so will the number of titles our company releases in the format. We will, however, continue to be selective with the genres we support in the format.

HM: Are Inception releases earmarked for simultaneous distribution or windowed channels? Would you go exclusive with kiosks if properly compensated?

Borshell: We have to take advantage of every opportunity to sell our product. We treat each release as a unique property and opportunity. If one particular account or distribution channel sees greater inherent value in our product then we will do whatever is necessary to maximize that title’s potential. Although our primary objective is to get our titles into all classes of trade, if sufficiently supported by one particular segment of the marketplace we will consider all approaches, up to and including exclusive distribution.

HM: Is it a buyer’s or seller’s market for below-the-radar, cast-driven content? Are film festivals bursting with unsold product?

Borshell: There always has been, and will continue to be, consumer demand for independent, cast-driven content. However, it will likely never be in as much demand as the bigger-budgeted, higher-profile releases. The film festivals have plenty of content for sale. One can say the festivals are bursting with unsold content, but that’s because so much of the content is not commercially viable, especially in a recessed market. What was once a likely sale in a booming market is now a tough, if not impossible, sale at retail. It’s more of a buyers’ market when it comes to such content, but there’s still a fair amount of competition among independent suppliers for the better films.

HM: Several national retailers are fielding digital distribution segments, notably Best Buy, Walmart and Sears. Are you working with any chains for distribution?

Borshell: Inception Media is pursuing digital distribution with all retailers and will look to support all current and emerging business models. In the end, it will be the consumers’ buying habit that determines the preferred business model.

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