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Wellspring Catalog Under Genius Wing

23 Feb, 2005 By: Jessica Wolf

Genius Products isn't just for the kiddies anymore.

The company that began five years ago as a classic music supplier for the children's market, announced it will acquire America Vantage Media Corp., which owns the Wellspring media film library and the Video Home Collection direct-response catalog.

The deal effectively puts 1,000 Wellspring titles — which include critically acclaimed foreign films as well as performance, exercise and children's product — into Genius' coffers.

“We are now a fully integrated entertainment company,” said Genius CEO Trevor Drinkwater in an investor call the day the deal was announced. “We are in the music business, we are in the video business and with American Vantage we also pick up competency in theatrical releasing.”

The deal marries Wellspring's catalog with a slate of other brands under the Genius Products umbrella, including IFILM, Sundance, Bazooka, TV Guide and others.

Drinkwater said Genius plans to use the Wellspring acquisition as a tool to expand the company's retail base, find new content partners and boost margins.

Genius will take Wellspring's catalog and reposition titles under existing Genius brands, launch them on their own or re-market the titles.

“We think of the $20 million [AVMC] did last year as fuel for our engine to drive profitability,” Drinkwater said.

Terms of the deal were not disclosed, and the companies are still in the due diligence review process.

Wellspring representatives were not available for comment at press time.

Genius is moving from a value-based business into a more proprietary-product business, Drinkwater said.

Genius Products Inc. predicts a net revenue shift for 2005, with value product dropping to make up 34 percent of the company's net revenue compared with 62 percent last year. The company expects revenue of branded product to grow from 24 percent last year to 42 percent in 2005 and predicts revenue from proprietary content to nearly double to 15 percent this year over 2004's 8 percent.

Genius also announced a merchandising campaign to help retailers leverage product and promote consumer impulse buying.

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