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Going It Alone

23 Nov, 2009 By: Billy Gil

David Borshell, former president of Image Entertainment, started a new home entertainment distribution company, Inception Media Group, during the worst U.S. economy in decades. But Borshell, who started the company along with home entertainment veteran Andy Reimer, believes his nascent company, which will manage distribution internally and without the help of a larger company, has “nowhere to go but up.”

“Going it alone certainly has its challenges,” Borshell said at the American Film Market (AFM) Nov. 9, where he was meeting with content providers about two weeks after debuting the company. “You’re not going to have the direct access to retail. But with that said, a lot of retail customers still enjoy working directly with independents, if you bring quality programming.”

Some independent distribution companies have continued to function without the help of a larger distributor, while many have had their home entertainment release functions absorbed by other companies. In September, Vivendi Entertainment acquired the home entertainment distribution rights to titles from Genius Products, while E1 Entertainment is now distributing product for family label PorchLight Entertainment. Meanwhile other companies strive to continue solo, such as Monterey Media, whose video division the company says is the second- oldest independent video manufacturer and distributor in the United States.

“Monterey’s unique strategy of finding quality product that can cross over to a variety of audiences has always been foremost,” said Jere Rae-Mansfield, CFO and managing partner of Monterey Media. “We operate a fairly horizontal corporate structure, so ideas come from all departments, which enables us to capitalize on the input from sales, marketing, production and even the admin area — all of which are consumers as well.”

In those respects — focusing on delivering quality programming and maximizing corporate structure — Inception is following along the same lines. Borshell said the company, which he hopes will eventually release three to four titles a month, will avoid costly infrastructure and avoid getting into costly bidding wars with large studios. Without the expense of a legacy infrastructure from the old days of home video, Borshell said Inception can be more “flexible and nimble,” and ultimately net more money for content providers.

“It’s important to us that we’re proud of what we represent,” Borshell added.

U.K.-based Revolver Entertainment recently started U.S. operations as well. EVP Sebastian Marciano said the company, which was founded in 1997, always intended to start operations in the United States, and he’s not daunted by the economic downturn.

“I think that downturns in the economy do not really hurt the video business,” Marciano said. “Some argue that business actually increases during bad times in the economy. Consumers have more time on their hands and less money to spend on going out.”

Marciano said a key to Revolver’s success has been that they acquire both U.K. and U.S. rights to release films. He said the company began with a partner for releasing content on home video but soon found that situation did not work in Revolver’s favor.

“It was always our plan to be in control of our own destiny, and as such we have gone alone since July of 2009,” Marciano said. “When we had a partner, we needed their support on the films that we wanted to release, [and we could not] control how our product was sold. We are in a much better place to choose and sell our own films than any partner could ever be.”

A recent trip to a Target store in Costa Mesa, Calif., showed strong placement of the company’s Robsessed documentary on the life of Robert Pattinson, teen heartthrob and star of the upcoming The Twilight Saga: New Moon.

Indie distributors, however, acknowledge the difficulties of releasing content in a market hit both by saturation and economic woes.

“As an independent distributor, Osiris Entertainment faces what seems to be a consistent reality in the marketplace: competing for shelf space and budget dollars,” said Doug Dohmen, VP of sales and marketing for Osiris Entertainment, which launched less than a year ago. “What has changed is the nature of the challenges, fewer brick-and-mortar outlets and the decline of space devoted to DVD product at retail.”

Alex Cohen, president of Synkronized, agreed.

“I would say that the biggest challenge we are facing as an independent distributor is to get the attention of big retailers like Blockbuster or Wal-Mart,” Cohen said. “If you are not one of their usual vendors, their procedure of picking their releases is very demanding in terms of advertising plans and deadlines.”

But, Cohen added, star-driven indie films and movies that should have been studio films previously are starting to fall more toward smaller studios and distributors. Borshell said that’s because studio independent arms have largely folded, leaving a void for indie distributors to fill.

“Physical DVD sales are more challenging, but distributors also are more careful in picking their acquisitions,” Cohen said. “That’s when movies that should have fallen into the hands of bigger actors of the industry are now knocking on our doors, which clearly raises our level of star power in our releases.”

Incremental revenue from electronic sellthrough and Blu-ray Disc has also helped indies tap into niche markets looking for independent titles through those venues. Wolfe Video VP of sales and marketing Linda Voutour said the women’s and gay/lesbian content distributor has released titles extensively through video-on-demand. Inception’s Borshell said releasing titles physically is almost like “riding a bike,” so there will be extensive focus on digital delivery.

“We clearly understand there’s a technical shift going on in the way people enjoy their entertainment,” Borshell said.

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