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As Wellspring Closes, Examining The State of the Art House Distribution

By Eugene Hernandez | Indiewire February 24, 2006 at 5:01AM

The Weinstein Company would rather not characterize the closing of Wellspring's theatrical distribution division as a shut down, but for the eight people who will be leaving Wellspring in the coming weeks, the decision marks the end of a company that had engendered tremendous loyalty among its employees and respect from competitors in the art house distribution business. "It is really, really sad that this is ending," Wellspring's head of acquisitions and distribution Marie-Therese Guirgis told indieWIRE Wednesday, the day after an emotional evening in which the company celebrated its final film premiere and officially acknowledged the news of the major changes taking place inside the company. "I have always been aware that this is an incredibly volatile industry," Guirgis added, "I've watched a lot of really good companies come and go in my only seven years of working in distribution."
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The Weinstein Company would rather not characterize the closing of Wellspring's theatrical distribution division as a shut down, but for the eight people who will be leaving Wellspring in the coming weeks, the decision marks the end of a company that had engendered tremendous loyalty among its employees and respect from competitors in the art house distribution business. "It is really, really sad that this is ending," Wellspring's head of acquisitions and distribution Marie-Therese Guirgis told indieWIRE Wednesday, the day after an emotional evening in which the company celebrated its final film premiere and officially acknowledged the news of the major changes taking place inside the company. "I have always been aware that this is an incredibly volatile industry," Guirgis added, "I've watched a lot of really good companies come and go in my only seven years of working in distribution."

The Challenges of Theatrical Distribution of Art House Films

With this week's news, Wellspring joins the list of companies -- like The Shooting Gallery, Lot 47 Films and Cowboy Pictures -- that faded away following a run at creating a business distributing art house films theatrically. Companies such as Sony Pictures Classics, Zeitgeist Films, Strand Releasing, New Yorker Films, First Run Features, and Kino International, among just a few others, still remain committed to distributing a mix of smaller independent, foreign language, and documentary films in theaters and on DVD today.

Wellspring will remain the moniker of a home entertainment arm of Genius Products, according to the company, which is controlled by The Weinstein Company and run by Genius CEO Trevor Drinkwater. While Drinkwater has not commented beyond a short statement issued Tuesday afternoon, Genius is understood to be pursuing primarily the DVD distribution of any independent film titles, along with its exclusive deal to release Weinstein Company movies on DVD, among its other labels. The company said Tuesday that TWC would handle any theatrical distribution, but Genius is understood to favor DVD releases because of the high costs associated with theatrical distribution. It is also understood that while Wellspring's theatrical distribution division was facing financial challenges after a run of low-grossing releases, on the whole the company was as successful outfit.

Wellspring, The Library, and Ownership Instability

The core of Wellspring, which was formed in 2001 after Winstar TV & Video (formerly Fox Lorber) spun off following the bankruptcy of its parent company, is its valuable library of more than 700 feature films and even more shorts. "What started out as a classic library company," explained Guirgis in the conversation with indieWIRE, "In the last three or four years grew into a significant new release theatrical company." Guirgis joined Winstar in 1999 as both an assistant to then company head Richard Lorber and an acquisitions coordinator. Al Cattabiani ran the company for a number of years, working to extricate Winstar TV & Video from its parent and re-branding it Wellspring. After he left the company, and it was purchased by American Vantage Media, Guirgis ran Wellspring's theatrical division with Ryan Werner until he left to join IFC Films last fall.

Guirgis was promoted to run both acquisitions and distribution at Wellspring following Werner's departure, leading a tight knit group within the larger company that maintains a significant DVD business. This month she learned that Genius, acquired by the Weinsteins in a deal last fall, would shut the existing theatrical division. The entire theatrical distribution team including Dan Goldberg, Marisa Keselica, Courtney Ott, Sophie Bouchart, Josh Strauss, and Joey Colista will leave, as will -- from the acquisitions side -- Vanessa Arteaga, and of course Guirgis. Acquisitions exec Rob Williams will stay with Wellspring to secure films for DVD release. Insiders expect that other departures may follow. Despite her feelings about the decision to close Wellspring's theatrical distribution business, Guirgis praised Genius CEO Trevor Drinkwater for having "an amazing relutation" in the video business, and strong relations with distribution outlets, like Best Buy or WalMart, which are important outlets for DVD sales.

"For the majority of the time I have been here, we have been a small core group of people who are incredibly loyal to each other," said Guirgis, who worked with the rest of the team to maintain a steady release schedule amidst the many changes in ownership over the past few years. "More than I think most companies." She continued, "We feel really lucky to be doing what we do and feel really strongly about what we do. We sustained each other, more or less running the company on our own."

After being acquired by Genius Products last year, Wellspring continued to acquire art house fare, including "The Beat That My Heart Skipped," "The Intruder," "Dear Wendy,"Gabrielle," and "Unknown White Male." The group also worked with Ira Sachs on his Sundance grand jury prize-winning film, "40 Shades of Blue."

A Range of Reactions and Praise from Colleagues & Competitors

"Wellspring as a company was much like the films they distributed, in that it defined itself through both its vision and integrity. This is why filmmakers loved working there," Sachs told indieWIRE this week, "Marie-Therese and Ryan weren't afraid to make decisions based on what they loved, and believed in. And they weren't embarrassed to proclaim in their choices that they still saw cinema as art." Continuing he added, What made them great, however, was the sophistication that they brought to getting the films out there..I find the story of Wellspring very inspiring, because like in great filmmaking itself, it was through ambition, passion, and hard work that they created something beautiful."

To many of the company's competitors and colleagues, the Wellspring team was a quirky, passionate group of likable, young cinephiles. Hanging out with the Wellspring team at a festival, or at one of the many film events in New York City, typically involved heated discussions about new movies, and occasional jokes about the company's eclectic taste in film. A host of friends dropped by Libation on the Lower East Side Tuesday night to toast the Wellspring gang and celebrate their final release, "Unknown White Male," a documentary about amnesia that has drawn controversy and is positioned to be one of the company's highest profile, and most challenging, releases due to the national attention it has already received. Before Tuesday night's premiere screening of "Male," VP Dan Goldberg acknowledged company staffers by name and thanked those in the audience for their support of Wellspring over the years.

"When Marie Therese Guirgis and Ryan Werner (now at IFC) ran that division, they were great colleagues and friends that I admired for their taste and keen eye on great films to bring to the US marketplace," expressed Marcus Hu, co-president of Strand Releasing. "I am sure both of them will continue to bring their vision to another company."

"They had exceptional taste and would often take risks on brilliant films, like 'Palindromes' or 'Tarnation', that may not have otherwise had a strong chance in American theaters," offered Matt Dentler, the conference and festival producer of SXSW. Touting the Wellspring team's bonds, he added, "You felt like they were family, working together with such enthusiasm and passion for cinema. And they seem to have a close, brother-and-sister bond. It was like that TV show 'Party of Five', but with subtitles."

"I felt most days that I was lucky," Guirgis told indieWIRE, "I worked somewhere that I could work on films that I completely believed in."

Weinstein Concerns and The Realities of the Business

While this week's announcement indicated that The Weinstein Company would handle Wellspring theatrical releases going forward, the company has not shown a commitment to distributing the sorts of films that Wellspring has released. Independent films, non-genre foreign language titles, and documentaries are not among the movies seen on the slate of the $1.2 billion Weinstein Company.

Film critic and longtime industry columnist Amy Taubin faults the Weinsteins for the demise of Wellspring. "Of course distribution is in a big transition, and Wellspring has been struggling, as have all small distributors of great, foreign language films," she told indieWIRE yesterday, "This, however, is another example of the pernicious Weinstein approach to competition: just don't let those pesky great art films (the kind that the Weinsteins would never distribute unless their directors allowed them to be mutilated, and these days, probably not even then) get released in any theaters whatsoever."

Others in New York's film business offered a different perspective. "The company was bought for it's extraordinary library but, along with the sale to TWC, the theatrical division of Wellspring became redundant," explained Mark Urman, head of distribution at ThinkFilm. "The library carries on and contains some of the most important films of all time. While it is always sad to see a quality theatrical distributor disappear, and to see good people lose their jobs, let's not forget that a few months ago there was no Weinstein Company. One company comes, another goes. This is the way it is and has always been. Logos change; Renoir, Bergman, Godard, and the like are eternal!"

"The closing confirms what many of us have long understood," explained attorney and rep Steven Beer of Greenberg Traurig. "The marketplace for smaller theatrical distributors is vanishing due to the increased costs required to compete. Media costs continue to escalate and it is too difficult to breakthrough against well-financed, indie-themed, star-studded studio financed product."

Howard Cohen, partner in Roadside Attractions, added, "The closing of companies like Wellspring are a loss to the theatrical distribution business." He continued, I did always wonder how Wellspring got away with releasing lots of (wonderful) foreign-language films theatrically. Theatrical is expensive and mostly a breakeven proposition. DVD is the payoff -- but subtitled films perform largely pathetically on DVD -- the vast majority do something like 10 - 15% percent of English-language films!! So it is inevitable that their business model would come crashing down some day."'

"From what I remember about Wellspring's history, the parent company has always had an educational market division," explained Amy Taubin, "But the films that made Wellspring such a valuable distributor in terms of film culture (films by Godard, Denis, Hou, Assayas and at least two dozen illustrious others) need a theatrical release in order to generate interest in the home market. Thus whether or not Wellspring continues as a DVD, educational market distributor has no bearing on them...it will be even harder for future films by such directors to reach the U.S."

The Future of Foreign Language Films

"There is not a great incentive to buy foreign films today," explained Marie Therese Guirgis, in the conversation with indieWIRE this week. "That could change with video on demand." A leading international film industry figure, who requested anonymity, expressed sadness at the end of Wellspring as a theatrical buyer, but remarked that these sorts of situations have proven common, especially in the U.S. art film business. "I don't think it is a sign, particularly," the individual added, "I think the wave of the future might be VOD, not DVD, but who knows. We are not ready to hang ourselves. Yet."

"Fewer and fewer subtitled films will now get released theatrically in the United States, that's the future. Specifically now 6 or 7 fewer a year with the loss of Wellspring, most likely films that no other distributor will take on," noted Roadside's Howard Cohen. "This slide will continue until Americans can be persuaded to watch subtitled films in some ancillary media that will throw off enough cash to the theatrical distributor to offset the high cost of theatrical release. Maybe that will be in the digital download future, that's all we can hope for." Continuing he added, "I think a large cable or internet company with a real mission will need to subsidize downloading and heavy promotion of subtitled films for a year or two to try and get the audience used to and liking watching them in real numbers. Then maybe a new and viable business model can emerge."

"I think, no matter what, the kind of films that Wellspring is famous for will always need a theatrical run," explained Matt Dentler from Austin, TX. "You look at two of their biggest hits of the last year, 'The Beat that My Heart Skipped' and 'Red Lights', and I doubt those films would have done anywhere close to their business if they hadn't scored with a New York and L.A. run initially." Continuing he added, "There's tremendous value in those slow roll-out openings, and I don't know if a somewhat obscure foreign-language film stands a chance without it."

Praising Sony Pictures Classics as the "Rolls Royce of film distribution," which has a long track record in art house releasing, Guirgis said Wednesday, "I believe that you can sustain a business and make a small profit. If you want to make a lot of money and get rich...no." But, she explained that the path to success for art film today is a relatively modest one. It's only for those people, she said, who truly "want to be in the business of releasing quality movies." She added, its essential that those involved have a passion for the movies themselves, noting that the future for these movies will probably involve films being made available directly to the consumer, involving a mix of VOD, rental services like Netflix, that cut out the middleman and allow viewers choices. But such releases are fueled by a theatrical component as well.

"I really, firmly believe that there is an audience for these movies," reiterated Guirgis, "That there are people who want to see these movies."





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