Homevid’s biggest Cinderella story has a happy ending — so far.
Six months after the Weinstein Co. bought a 70% interest in Genius Products, the niche player has proved it can play with the big boys.
The homevid company won the rental crown with “Derailed,” the first Weinstein title to hit DVD, and recently notched a surprise sales victory over Fox’s “The Family Stone” with “Hoodwinked” in the week both debuted. Thanks in large part to “Derailed,” Genius generated more revenue in its first quarter than it had in all of last year. Shipments have already increased sixteenfold over 2005’s tally.
“We felt like we were going to be able to do this, but there were a lot of naysayers — there still are — that thought we would stumble and fall on our faces,” said CEO Trevor Drinkwater.
Bob Weinstein says Genius’ strong showing under TWC’s interim ownership — the deal closes this quarter — vindicates the decision to invest in a homevid company instead of forging a distribution deal with a major.
“With the right product and marketing, it doesn’t matter whose name is on it,” he said. “If it’s great product, it will do well.”
The Weinstein Co. talked with several majors about a distribution pact, “but we wanted to maintain as much control as possible,” Weinstein said. Although he insists he and his brother experienced “no frustration whatsoever” in their vid dealings with Disney, quirkier Miramax fare often appeared to get lost in the shuffle at the Mouse House.
The arrangement, Weinstein notes, allows TWC to acquire other product for homevid distribution. At Cannes, the Weinstein Co. unveiled a new Dragon Dynasty homevid label that will be distributed by Genius. And in the past month, Genius has inked deals with Tartan Video, Peace Arch Entertainment and Grodfilm.
Genius also has rights to the Wellspring library; it sold the Baby Genius brand back to the creator of that line in January but still distributes the DVDs Stateside.
Drinkwater says Genius was able to ramp up to handle higher volume due to its long courtship with the Weinstein Co., noting they first started talking about a deal in February, some 10 months before the pact was announced.
“We spent much of last year building up the infrastructure, so once we flipped the switch, we were ready to go,” Drinkwater said.
The impact of the TWC deal was clear in Genius’ first full quarter since it was brokered. Genius generated net revenue of $28.6 million in the quarter ended March 31 compared to $2.6 million a year earlier.
Genius generated $22.3 million in 2005. Since January, the company has shipped 8 million units vs. 500,000 in 2005.
However, this growth wasn’t enough to push the company out of the red in the quarter. Genius widened its first quarter loss to $5.7 million from $2.2 million a year earlier. Company attributed $1.3 million of this loss to costs associated with the Weinstein deal, including shuttering its theatrical division.