Alex Agran and Tom Stewart discuss the changing strategy at UK distributor Arrow Films, which is beginning to take a more active role in the UK theatrical market.

In its 20th year, Neil Agran’s Arrow Films is ramping up. The UK distributor is best known for handling classic, world, horror and cult films on DVD and Blu-Ray, but is beginning to take a far more active role in the UK theatrical and new release market. Last year, Arrow, which remains a family owned company (Alex Agran co-owns with his father Neil), hired Tom Stewart (former General Manager of Home Entertainment at Metrodome) to head up its acquisition arm.

The company has already made a number of high profile acquisitions including Nikita Mikhalkov’s Burnt By The Sun sequels (bought from Wild Bunch), Lee Chang-dong’s Poetry (sold by FineCut) and Battle Royale 3D.

Why are you venturing into theatrical?

Alex Agran: We have relied quite heavily for a long time on catalogue titles. That was a boon for the last 7 to 10 years. But increasingly there’s price erosion on DVD, particularly on catalogue stuff. We took a view that we wanted to get into more first run titles. There is more opportunity now in the digital world. There are better materials. The theatrical side is something we want to develop too. It’s important to have those new films to support the main catalogue. This is definitely an era of change for us. For a long time, we’ve done a lot of catalogue titles and re-issues. The time came for us to realise that that business won’t last forever.

Tom Stewart: Arrow Films has been a very successful independent distributor on theatrical and DVD but has never really entered into the new release area. It was just never the business model. They were so concentrated in going through the archive, finding those classic films like Cinema Paradiso and Tin Drum, that they didn’t have the time to focus on looking for those new films. They are two very different markets. It (moving further into theatrical releasing) was something Alex had considered very much as a new area of growth for the company.

This must require a heavy investment in p&a

Agran: It’s a huge commitment. I don’t see it as a gamble, so as to speak. We believe we’ve got a really strong slate. Film is going to be consumed, whether it’s on DVD, digital or theatrical. It will always have an audience…as long as we secure the correct rights.

Stewart: It’s certainly a major investment for our films to enter into the new release, all rights business. We are investing heavily in 2011 in this area as well as continuing to acquire films on the library side. We’ve put a lot of thought and planning into the films that will be very commercial on DVD and the ones we’ll release theatrically and not see the revenues come through till 2012.

How many titles are you aiming to pick up for theatrical each year?

I’d say that it would be between four to six for theatrical. On the new release side (on DVD), it will be 20 to 24 films – two films a month.

What is the thinking behind your new Arrow Academy label?

Agran: The Arrow video label is a label dedicated to cult cinema. The idea was to bring cult exploitation titles and video nasties to DVD and Blu-Ray with the ultimate packaging and the ultimate extras in the best versions ever seen. That has been a runaway success. We’ve done 20 or 30 titles now. We just put Battle Royale out on a limited edition Blu-Ray and it sold out even before it got to the shops. These are collectors’ items. We decided this was the way we had to go on DVD. This is what people want. They look on line and they talk. We are generating PR because of the quality of releases we’re putting out. We looked at this model and asked if there was something similar we could do with arthouse and world cinema stuff. The idea of “Academy” is (from) the old arthouse cinema (on Oxford Street). We’re bringing out titles like Les Diaboliques and Bicycle Thieves on Blu-Ray.

Stewart: It’s about really focusing on those classic films like Tin Drum and Cinema Paradiso and creating real special editions.

The UK marketplace is very crowded. Is there room for so many distributors?

Agran: People have been saying that for years. There is always talk that there are too many and that there will have to be consolidation but somehow everyone seems to survive. It’s a challenge. The last three or four years have been tough because of the lack of specialist retailers,  HMV closing more stores now, price erosion – all the usual stuff makes it so hard. Yet, when you go to the markets, there is such competition for film.

Alex, did you grow up with the business?

Alex: I was always around it. The business was at home – it was basically my mum and dad in the front room.

How are you planning to mark the 20th anniversary?

Alex: We’ll have a party in the summer to give a big thanks to anyone who has supported us along the way.