By Michael E. Ross Reporter
msnbc.com
updated 7/10/2006 5:36:40 PM ET 2006-07-10T21:36:40

Dec. 12, 2002 — Buried in last weekend’s domestic box-office receipts for the top movies was a wake-up call from some of the country’s 36 million Hispanic Americans and a big indicator of the future of American movie-going — at least if Santiago Pozo has anything to say about it.

Pozo, the founder and CEO of Arenas Entertainment, knows from 20 years of experience in the movie business what makes a good story. A tale from his own company has all the elements of a David-takes-out-Goliath saga: the scrappy little indie movie made for little money on a theater for theater basis out grossing the big-budget picture starring two proven Hollywood A-list talents.

“Empire” did just that last weekend. The film, the first release in a new partnership between Arenas and Universal Pictures, did very respectable business when it opened Friday, grossing $6.3 million and ending its first week in theaters at No. 4. Showing in just 867 theaters, the film averaged a hearty $7,235 per screen, compared with a $4,288-per-screen average for “Analyze That” — the “Analyze This” sequel starring Billy Crystal and Robert de Niro — that opened more widely, in 2,635 theaters.

Pedigree with street cred
The film stars John Leguizamo as Victor Rosa, a drug dealer in the Bronx who looks to end his criminal activities and change his life through a shady Wall Street investment scheme. The film’s cast, a supple mix of pedigree (Isabella Rosselini, Sonia Braga, Denise Richards) and street cred (Fat Joe and Treach) has received positive notices. Many have called Leguizamo’s performance ”[his] best movie work so far, a subtle and richly internalized performance. ... By scaling back his over-the-top tactics, Leguizamo makes this dealer quite human.”

Pozo said the story of “Empire” is “something that young Hispanics will embrace, in the tradition of the best American gangster movies. What John Leguizamo has done is the 21st-century version of what James Cagney or Humphrey Bogart has played. You have a great story well told.”

Director's vision
Pozo credits first-time director Franc Reyes with imparting a special vision. “It’s something seen through the eyes of someone who was born and grew up in the Bronx, someone who’s been a witness to this,” he said. “You have those elements that are very powerful and make good entertainment.”

Not all the reviews were overwhelmingly positive, but the box-office reception for “Empire” has nonetheless put the entertainment industry on notice: There’s another market for films in America, an audience hungry for movies that speak its language, a potential audience bigger than the population of Canada.

For Spain native Pozo, 45, it’s been a gratifying ride. “This is one of those feelings where reality is bigger than your expectations,” he said in an interview from Los Angeles. “This is going to change things for Hispanics in Hollywood. It’s big news that’s going to impact the lives and careers of many Hispanic actors.”

Growing pains
Arenas is making its bid for a share of U.S. Hispanic purchasing power, estimated by Hispanic Business magazine at $500 billion a year. The Beverly Hills-based company began its life as something else — as a publicity firm catering to a Hispanic clientele.

It was smaller then. A lot smaller. “I started Arenas in 1988,” Pozo said. “It was me and a phone.” But Pozo had experience going for him. He started his film marketing career in 1985 at Universal Pictures. Over the years, Pozo assembled an impressive resume, working on Hispanic ad campaigns for films like Steven Spielberg’s “E.T.” and Sir Richard Attenborough’s “Cry Freedom.” His company created marketing campaigns for other top draws such as “Pulp Fiction,” “Gladiator” and “Erin Brockovich.”

“Yes,” Pozo said. ”Soy un veterano. I’m a veteran.”

What happened next was a classic case of a business with growing pains. “The company grew as a publicity firm,” he said. “Then we became a full-fledged ad agency and then added a division for talent management. At one point, I thought it was time to take the company to the next level.”

‘Stop, I'm in’
Requiring serious infusions of cash, Pozo contacted Marco Polo Investments, a Spanish venture capital firm, and Marc Shmuger, then president of marketing for Universal. The birth of a notion was imminent.

“I told [Shmuger] that the future isn’t more European films or art-house films, the future is in Hispanic films,” Pozo said. “He didn’t even let me finish my PowerPoint presentation. He just said, ‘Stop. I’m in.’”

Shmuger — responsible for Universal’s worldwide marketing, international distribution and Internet activities — was elevated to Universal vice chairman in December 2000. He brings a screenwriter’s sensibilities to the job; he wrote the 1987 film “Dead of Winter,” directed by Arthur Penn.

Pozo credits Shmuger with having what many others in Hollywood didn’t: the vision thing. “When he was president of marketing, he gave me latitude for my campaigns,” Pozo said. “Years later, all that hard work of working the Hispanic market when it wasn’t glamorous or chic or the flavor of the month — it paid off.”

The strategy
Pozo’s game plan for Arenas as an entertainment concern is relatively simple and, like many strokes of genius, no more than turning the prevailing industry wisdom on its head.

Rather than releasing “Empire” on a platform basis — on relatively few screens in selected cities — and counting on word of mouth from mainstream audiences, Pozo released “Empire” on a big scale, nationwide, relying on his deep connections in the Hispanic business world and the evolving demographics that have made Hispanic Americans the fastest-growing ethnic block of the U.S. population.

The risk of opening all his company’s films on a nationwide basis will be evaluated case by case. “That’s exactly what you have to evaluate in every single film — arriving at the meaningful amount of investment for the maximum return,” he said. “Sometimes, that’s by opening wider; sometimes it’s by opening in 800 theaters.”

Going forward, Pozo plans for Arenas to produce its films for “up to $5 million.” That amount might cover the catering budgets for major motion pictures, but Pozo sees no point in profligate spending. “You don’t need to spend $20 million or $30 million,” he said. “Those are obscene budgets.”
       
Identifying the market
Pozo practices as he preaches, keeping his staff lean and nimble. “We don’t have many professionals,” he said. “Out of 32 employees, I think 30 are Hispanics. They come from New York, Mexico, Puerto Rico; they are Colombians, Brazilians.... This is a kind of pan-Hispanic United Nations, and the beautiful thing for me is the chance to put Hispanics in the business.”

One historical challenge for the film industry in cracking the Hispanic market has been identifying just what that market was. “For one thing, the Hispanic audience represents such a fractured combination of different countries of origin,” Shmuger said. “There’s been probably an assumption that it would be a challenge, if not impossible, to find a way to bridge all of them — the Mexican population, the Puerto Rican population, the Spanish population. Some efforts early on to find the Hispanic audience were frustrating; you were sometimes speaking to one element of the Hispanic population at the expense of another.”

“It’s a demographic that has been woefully underserved by the Hollywood studios,” Shmuger said. “A focused undertaking such as Arenas, whose main objective is to create stories for that audience, goes a long way toward filling the gap that’s existed up to now.”

Next stop, ‘Argentina'
Next for Arenas are two projects Pozo believes will resonate for all audiences. “Imagining Argentina,” an adaptation of Lawrence Thornton’s novel, starring Antonio Banderas, Oscar winner Emma Thompson, Ruben Blades and Claire Bloom. The film, with some supernatural elements, is set in Buenos Aires during the Argentine “dirty war” (1976-1983), during which some 30,000 Argentines vanished.

An Argentinean playwright (played by Banderas) has the psychic ability to find the locations of the missing by looking at their faces in photographs. Ironically, his ability works on the images of “los desaparecidos” — the disappeared — but not on the picture of his wife (Thompson), swept up in the violence. The film, now in post-production, is due out next year.

Also in the pipeline is a film featuring Los Tigres del Norte, a Grammy-winning pop group whose distinctive norteña music has been a sonic staple of the American Southwest for years. 

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