Movie Supplier Finds Success Catering to the Black Market

When Leigh Savidge ditched his rinky-dink wholesale video operation in 1986 to tap the upstart African American film market, his motive was largely Darwinian: He figured the only way to survive in the increasingly glutted marketplace was to find a niche.

And based on industry feedback, black cinema was an untapped segment of the business with enormous potential on video.

For a blond-haired, blue-eyed white guy from Seattle with not a lick of experience marketing the genre, turning that elusive dream into Xenon Entertainment Group--now the leading supplier of low-budget, independent films aimed at black consumers--it’s been a long road trying to overcome retailer skepticism.

But thanks to black cinema pioneers such as directors Spike Lee and John Singleton, the critical success of films such as “Menace II Society” and “Eve’s Bayou,” and the reemergence of 1970s “blaxploitation” doyennes like Pam Grier in Quentin Tarantino’s “Jackie Brown,” black cinema is expanding.

“I don’t think anyone at retail understood just how potent the black consumer base is for video rental and sell-through,” Savidge, 39, says. “It was clear to me there was a big need for black-audience content that was not coming from the studios or indies.”

From its 35-title line of 1970s blaxploitation chestnuts such as Melvin Van Peebles’ “Sweet Sweetback’s Baadasssss Song” to Hong Kong action films to current independent projects like “Black Spring Break,” Xenon has built a unique video library of 250 titles. And retail demand for the supplier’s product is swelling.

In fact, Xenon made more money in 1997 than in any other year in its history. Revenue hit $7 million--up 300%--driven in part by a strong sell-through market and its recent documentary “Thug Immortal,” a tribute to slain rapper Tupac Shakur. Savidge says the title, which was released in May 1997, shipped 250,000 units.

Although that title was more the exception than the rule--50,000 units is a more typical haul--it did signal a new era for Xenon.

“It took us 10 solid years of trying to convince retailers and distributors of the viability of independent black cinema,” Savidge says. “But you just don’t go away; there is a tremendous advantage to sustaining yourself in a market where other people tend to go out of business.”

To be sure, Xenon is not the only supplier of black cinema. Trimark Pictures, New Line Cinema and Universal Pictures, among others, have released titles ranging from “Booty Call” to “Boyz N the Hood.”

And although Xenon has a lock on the blaxploitation market and was one of the first suppliers to rescue the titles from the dustbin, the genre is engendering a new breed of peddlers. Orion Home Video released a five-title “Soul Cinema Collection” in May.

What differentiates Xenon, Savidge says, is that most of its titles have “an authentically black point of view,” primarily because they are written and/or directed by African American filmmakers outside the Hollywood system who make films in which the prevailing aesthetic is bone-dry realism “more reflective of black life.”

“Black consumers tire of black images bandied about by white-run studios that are framing stories for a mass audience,” Savidge says. “They’re hungry for portrayals that are more authentic.”

Although some Xenon product does have crossover appeal, such as its 75 Hong Kong action flicks that Savidge says account for 40% of the company’s releases, the majority of Xenon’s titles appeal to a specific audience.

“I firmly believe our customer is Nike’s customer,” Savidge says. “Our audience is the hip hop audience--the age-14-to-25, mostly male, Tommy Hilfiger-wearing kid drinking Sprite and watching MTV.”

For Savidge, being white and owning a company that appeals to a young black audience is at times a difficult dance. Even with Xenon’s long track record, some competitors grumble.

“Xenon is not black-owned; there’s a lot they don’t understand about” the black experience, says Billy Wright, president of Bill of Wrights Entertainment Inc., an African American-owned distributor that specializes in “the black urban genre.”

“It bothered me a lot at first, but [running BOWE] is my way of doing something about it. And this [market] is growing. I’ll bet there will be 10 more black distributors by the end of next year.”

Savidge concedes that his skin color fuels a running debate and that the racial gulfs are sometimes impassable.

“Clearly, there are people who will not do business with us because we are white,” Savidge says. “But we offer a service to black filmmakers; this is where they can get a deal. The fact that we’re white--most people get past that quickly if there is a decent economic deal on the table. When you are focused and motivated to deliver good product, the race part of the equation becomes immaterial.”

How does a magna cum laude Boston University graduate with a major in film and a minor in English come to own a black cinema label?

Savidge says that after college, he came to California, where he spent 2 1/2 years in the stand-up comedy circuit with then-unknowns such as Sam Kinison, Arsenio Hall and Jim Carrey.

In 1986, he decided to take a gamble on the burgeoning home video business. With $17,000 in his pocket, Savidge went to the Consumer Electronics Show in Las Vegas and blew it all on prerecorded tapes. Within two days, he had become an instant wholesaler, having sold off his entire inventory.

Savidge knew he needed a niche, and he believed there was a demand for more black films. But as a start-up company trying to market a new genre, Xenon was mired in credibility problems. “We were a joke for years,” Savidge says. “People didn’t know what to make of us.”

Indeed, Savidge says he was so desperate for buyers that he once hired a ranch hand to take a donkey to an Omaha retailer, whose corporate headquarters neighbored a farm, as a joke. “After 65 unreturned phone calls, the guy bought $3,000 worth of product,” Savidge says. “He got a kick out of the time and energy we put into getting his attention.”

What makes the market easier to tap now than 12, or even three, years ago?

“The video retail world has a weird collective consciousness,” Savidge says. “Many of them arrive at the same conclusions at the same time.”

While he says Spike Lee’s “She’s Gotta Have It” in 1986 was “the dawning of the modern era of black cinema,” it was the sudden explosion of the sell-through market in the mid-1990s that ultimately paved inroads for Xenon into retail. A title selling at $19.95 carries a lot less risk to a retailer than a $70 rental title.

“It’s hard to take a chance on something [at a rental price] that doesn’t have any built-in star power or a franchise,” says Cliff MacMillan, video buyer for Tower Records/Video, which started buying Xenon product two years ago.

A few video retail chains, such as Blockbuster Video, have been providing what Savidge calls “crucial support” for the company since the late 1980s.

“We carry a tremendous amount of Xenon product,” says a Blockbuster spokesperson, “a combination of martial arts films, 1970s product and some of the newer titles. There’s a definite audience for this, and it very consistently rents.”

And thanks to the growing popularity of soundtrack-driven direct-to-sell-through titles such as Xenon’s “Soul in the Hole” and “Black Spring Break,” Savidge says big chains such as Musicland Stores Corp. and Best Buy are ramping up their buying.

“We did a line review and saw some positive sales trends” on Xenon titles, says Joe Pagano, music and movies merchandising manager for Best Buy, which has sold 9,000 units of “Thug Immortal” in the last year. “So we both broadened and increased our commitment to these offerings.”

Xenon’s market penetration is not just growing domestically. The company is expanding its operations overseas, eyeing Europe and South Africa. An important peg in those expansion plans is Xenon UK, launched in February.

“I see London as a window to Europe,” Savidge says. “Black films have not been marketed overseas correctly. Specific distribution infrastructures haven’t been laid in.”

Xenon also is planning to market its first children’s title, “C-Bear and Jamal,” in June.

And although Xenon will consider carrying “non-ethnic product” in the future, Savidge says the company’s chief focus will be the continued expansion of independent black cinema--the genre it wagered on more than a decade ago.

“There were times when I thought, ‘Am I nuts here or is this really going to fly?’ ” Savidge says. “But like any entrepreneur, you have the assumption you’re onto something and you’re just ahead of the curve.”