EXCLUSIVE: Along with everything else about the 2001 Toronto Film Festival, the launch of Magnolia Pictures was quickly forgotten on September 11, as co-founder Eamonn Bowles and other indie film execs scrambled to find ways to get home. Magnolia marked its 10th anniversary at 2011 Toronto. While the company still doesn’t carry the profile of some other indie distributors, Bowles and co-owner Todd Wagner said their model — mixing traditional indie theatrical distribution with emerging digital technology — has made them distinctive and profitable. VOD revenues now often outpace theatrical for Magnolia films, and they return profit to filmmakers because of low P&A spends. Bowles and Wagner have been honing the VOD model since they were branded charlatans by theater chains in 2005 when Steven Soderbergh’s micro-budget film Bubble was released simultaneously on movie screens, VOD and DVD. Wagner and partner Mark Cuban put Magnolia and other film assets under the 2929 Entertainment banner on the selling block earlier this year, but pulled them back when they didn’t get a high price. Wagner said he’s staying.
Magnolia releases 35-40 films each year now, with upcoming releases that include the 2011 Toronto title Melancholia (which got Lars von Trier banned by Cannes for making dumb pro-Nazi comments). Some Magnolia efforts follow a theatrical release cycle, others go direct to DVD. But VOD has increasingly become the distributor’s calling card and Wagner said proof of its viability came when Harvey Weinstein poached Magnolia execs Tom Quinn and Jason Janego to start a VOD venture for The Weinstein Company.
“Harvey’s been in the industry forever, and he thought it was a good enough model to hire some of our folks away,” Wagner told me. “I’m flattered. There are other people doing this now, from IFC to John Sloss. To me, it’s validation that we’ve hit on something. But we’ve got an advantage, a unique collection of assets in the Landmark Theater chain, a home video division, and HDNet. The big theater chains still absolutely won’t play Ultra VOD titles, so having a theater chain is helpful. As is having the television network for the relationships it has made us with all the MSO’s. These synergies allow us to be freewheeling in how we license content. And producers are coming back to us with films because we are cutting them checks. That rarely happens elsewhere because of all the P&A that stands in front of them.” (more…)