Genius Products Inc. (GNPR)

[fredman]

Vivendi to take over Genius distribution
PHYSICAL: Deal creates indie force with 3,000-plus titles

Vivendi Entertainment is taking over the core home entertainment distribution operations of Genius Products and acquiring distribution rights to Genius’ biggest DVD franchises, including World Wrestling Entertainment and Sesame Street.

As a result of the deal, the financial terms of which were not disclosed, Vivendi’s DVD catalog is expected to grow 200% to more than 3,000 titles, with the company becoming a much stronger force in indie distribution. Its first releases under the new arrangement include Sesame Street: 40 Years of Sunny Days and WWE Presents: Hulk Hogan’s Unreleased Collector’s Series, both bowing in November.

Vivendi expects to gain a larger presence at retail with its expanded lines, an increasingly important strategy as the major studios continue to crowd out indies on retail shelves.

“It allows us to expand our footprint at retail beyond our existing one,” said Vivendi president Tom O’Malley. “We are going to have very significant brands. We think we will be the preeminent home for independent content. We will be an ideal place for the best brands.”

In the deal, Vivendi, a division of Universal Music Group Distribution, also wins distribution of the Classic Media line, which includes faith-based hit Veggie Tales and RHI Entertainment, which includes Lonesome Dove and dozens of other TV movies and miniseries. Vivendi also will distribute Genius’ own DVD library, which includes the arthouse Wellspring line, and future releases for an unspecified number of years.

Genius until early this year was majority-owned by The Weinstein Co. and has distributed TWC titles to retail. Sources said Vivendi will assume distribution of TWC’s catalog and some new direct-to-video titles, but TWC’s new release theatricals, such as hit Inglourious Basterds, are expected to move to another DVD distributor.

TWC, Vivendi and Genius all declined to comment on distribution of the TWC titles.

Prior to the deal, Vivendi already distributed Shout! Factory, Palisades Tartan, Codeblack, Eebee’s Adventures and other lines. Last year, Vivendi added a theatrical distribution arm to handle eight to 14 films per year.

As part of the deal, Genius will remain in operation and will continue to oversee distribution of its non-DVD products, such as videogames, albeit as a very different company from its high-profile peak, when it housed about 200 employees and was majority-owned by TWC. Early this year, GNPR Investments took a 60% ownership stake of Genius, which had struggled with few TWC hits. In the last several months, Genius has reduced its workforce by about 60 and will likely further streamline with its Vivendi alignment.

As the DVD category matures, Genius is eager to diversify into new products, such as its upcoming new game release Scratch: The Ultimate DJ.

“We see an opportunity to expand beyond DVD in videogames and music,” said Genius CEO Trevor Drinkwater. “And a lot of indie content owners need help beyond DVD. We want to help content partners maximize their business.”

He believes Genius’ former DVD lines will be in good hands at a vastly expanded Vivendi. To help manage the influx, Vivendi has hired several Genius executives, including naming Mitch Budin executive VP/general manager of Vivendi Home Entertainment.

Source: http://www.videobusiness.com/article/CA6696421.htm