Small DVD Firm Takes on Majors In Marketing Rap

By SHELLY GARCIA
San Fernando Valley Business Journal

In "The Lost Tapes Circa 1989" album, Tupac Shakur rapped,

"As real as it seems the American dream

Ain't nuthin' but anotha calculated scheme."

While their faith in the system is far more steadfast, the lyrics likely struck a chord with the folks at Image Entertainment Inc., a Chatsworth-based DVD distributor that will launch a series of documentaries about the lives of rappers, including Shakur, who was gunned down in 1996.

Though one of the earliest to hitch its wagon to the DVD format, the independent distributor has had to battle not only the big record labels, but also the fickle entertainment industry and the vagaries of popular culture to eke out a living. And despite the meteoric rise in DVD sales in recent years, Image failed to turn a profit for the first six months of 2001.

In a bid to boost its fortunes, Image is turning to a largely untapped segment of the market. The company inked a deal with QD3 Entertainment, a company formed by Quincy D. Jones III, to license and distribute a series of 12 DVD documentaries exploring some of hip hop's most celebrated and controversial names Notorious B.I.G. (aka Biggie Smalls) and Eazy-E, along with Shakur and others.

"The consumer and the retail accounts are asking for this sort of product, and we're looking to fill this demand," said Barry Gordon, vice president of sales for Image, a publicly held company with annual sales of $100.8 million. "We're looking to fill this demand."

Image lost exclusive licensing deals last year with Orion Home Entertainment Corp. and Universal Studios Home Entertainment Inc. that resulted in a net loss of $1.2 million, for the six months ended Sept. 30, compared with earnings of $3.1 million for the like period a year ago. Revenues dipped 16.1 percent to $41.5 million from $49.5 million in the year earlier period.

So Image is turning to producing its own programming with an emphasis on music-related DVDs.

"The one area of music that we were not creating a market for was hip hop and urban," said Gordon of the company's current 26-percent share of the music DVD market. "And the hip hop and urban business in audio and clothing is a multibillion-dollar industry. However, in video and specifically in music-related video, it's completely underserved, until now."

There are only a handful of documentaries in the hip-hop genre, but some of those produced have been highly successful, Gordon said, among them "Welcome to Death Row," about Suge Knight and the record company he built.

The programs will feature documentary footage and live concert performances, along with interviews from friends and associates. The first in the series, "Thug Angel: The Life and Times of Tupac Shakur," is set to launch in April.

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