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SMALL BUSINESS: The Biz is in “B” Films

The Biz is in ‘B’ Films York Entertainment has found success by taking its films straight to the consumer. By JACQUELINE FOX Staff Reporter The direct-to-video film production business may not be the glamorous side of Hollywood. There are no star-studded red-carpet premieres, no pre-release junkets to create a buzz beforehand. But Tanya York doesn’t mind. Her Encino-based video production and distribution company, York Entertainment, has made a splash and a profit churning out low-budget films for the straight-to-video market. York has exploited a once-overlooked but now widely popular niche in an industry where few have been able to survive while competing with the big studios, who’ve managed to dominate the field of mainstream video acquisition for almost two decades. York produces and distributes “B” films with predominantly all-African American casts and titles like “Beverly Hills Bordello,” “Dirty Kopz,” “Blade Sisters” and “Thug Life.” These titles are made expressly for the urban-action film genre, fueled by the steady growth in popularity of the rap and hip-hop culture since the early 1980s. Stars include rap artists such as Ice T and Kurupt; a recent release called “Beverly Hood” stars the Grammy winning female R & B; band Destiny’s Child in their film debut. York calls them “testosterone-driven” films because they turn on themes of mayhem, sex and inner city vengeance, and appeal primarily to male viewers between 18 and 40. The genre has become a profitable staple in the rental market for retailers of late, primarily the top two, Blockbuster and Hollywood Video, and has gained even more steam since DVD’s came on the scene, providing a new format for the film collector. The success of hip-hop and rap has allowed York to expand into other markets. In January, York began skipping the rental chains and selling straight to the consumer via retailers like Wal-Mart and Circuit City Inc., unloading 1 million units the first 11 months on the sell-through side. Six months ago York launched an international distribution arm. “There is a huge demand for this genre in foreign markets and, although we don’t know what our numbers are going to be like for the year, we expect the international division to be an extremely important part of our growth,” said York, 32, a one-time aspiring actress. York said the rental and sell-through markets now produce the same amount of revenue, but it’s the sell-through side of the industry, particularly on the DVD format, that is poised for growth. York’s videos and DVD’s retail for between $9.99 and $19.99. Revenues for York in 2000 were $20 million and the company expects a 10- to 15-percent increase in market share in the next year. Kevin Hasslen, manager of VHS and DVD purchasing for Portland-based Hollywood Entertainment, which owns the Hollywood Video chain, said the York line is among the top sellers in the urban-action genre, primarily because of the packaging. “They do really well in our stores,” said Hasslen. “But what’s put them above the studios and other vendors is the artwork they put into the packages. It’s just superior, and that’s important to us because that’s our bread and butter. It’s the first thing the customer sees.” Hasslen declined to say what percentage of rental sales come from the urban line or what Hollywood typically pays for a York product. York owns all foreign and domestic distribution rights to the 350 titles in her library, releases an average of two titles a month and typically ships between 35,000 and 60,000 units per title. York began as a filmmaker herself. She launched her company, then York Home Video, in 1990 because it seemed like the best way to distribute her own movies. Her first film, “Odd Scores,” was made when she was 19. She dropped the production end of the business in 1992 and began distributing other filmmakers’ and vendors’ products. Even then, however, she admits she did not know how tough getting the films on the shelves was going to be. “I thought if we just came up with a jacket or a sleeve and put it out there, we would have a distribution company,” said York. “But there was a lot of competition at the time and a lot of saturation of the market. Fortunately, we focused on one genre, which has really opened a lot of doors for us.” Those doors opened even wider in 1997 when York partnered with Florida-based Maverick Entertainment president Doug Schwab, a former video buyer for Blockbuster. In 1999 York re-launched the production arm of her company and is now working both sides of the industry once again. For now, there are no plans to take the company public. However, York intends to launch a separate company in 2002 that will focus on production, leaving York Entertainment to once again focus on product acquisition and distribution. “We intend to have a new film in production every six weeks,” York said. York said staying small and flexible has been the key to her survival. To keep costs low, she limits acquisitions to the $1 million to $5 million price range. York believes the video rental market for her type of product may have peaked, but she said she can maintain her footing there while developing the new wave of sell-through VHS and DVD sales. Hasslen said she’s probably right on target. “When they first got in, demand was a lot higher than supply, so now it’s not as hot,” he said, “but quality products in that genre are always going to rent and we will continue to buy.”

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