LOS CABOS, Mexico – Just as seemingly everyone else is piling into content, Mexico’s Alex Garcia of AG Studios is pulling back. Citing the uncertainty of today’s film biz where SVOD platforms such as Netflix, Hulu and Amazon are more actively creating or acquiring content, and collapsing traditional windows in the process, Garcia said: “The only way for AG Studios to work was to produce films endlessly; I have decided to stop producing and focus on providing production services instead.” To that end, he has spun off AG Studios’ movie arm Itaca Films into an independent unit for Itaca CEO Santiago Garcia to manage as he sees fit.
“Producing movies is like betting the double 00 in a roulette, so the odds to win are 37 to one; I’m not sure I want to take the risk,” he said, adding: “It’s easier for me to stop, watch and see where it’s all going.” He likens the surplus of content today to the dot.com bubble of the late ‘90s, which famously imploded.
He is giving carte blanche to Itaca’s Garcia to continue producing films while he remains a ‘silent partner.’ [Santiago] Garcia has been actively producing films in Cuba and Mexico, the latter run by Andres Tagliavini. The other Itaca outposts in Colombia and Brazil will focus on providing production services. Last summer, Itaca Colombia, led by Rodrigo Guerrero, unveiled the film and TV production services collective Prose in partnership with Five7 Media and RCN TV in a bid to streamline and facilitate production services in locations worldwide. Other companies from Spain and Australia also boarded the initiative. “We hope to expand Prose worldwide,” said Garcia.
Other operations will continue in place such as Latam Distribution, run by Mineko Mori, who will continue to handle the distribution in Latin America of AG Studio’s catalog while exploring production opportunities “as long as the productions don’t need my investment,” said Garcia. AG Studio’s fantasy-horror cable network Morbido TV, managed by Eduardo Caso, just launched last week. In L.A., Garcia still owns BN Films and equity-backed fund AG Capital, run by former CAA film finance agent Laura Walker. “The industry is shifting but there are other changes that are making it even harder,” he said, hinting of the recent outcome in the presidential elections. “Alex has invested $400 million in content over eight years,” Walker said at the time of AG Capital’s launch in May last year. Meanwhile, AG Studio’s participation in the “Lucha Libre” reality series has paid off, now on its third season on Robert Rodriguez’s El Rey network. The holding company’s music arm ZZ Inc. is also doing well as the music business has again become profitable from the growth of a multiplicity of revenue sources.
Many film production companies have diversified into TV production.
AG Studios closed its studio in New Orleans, however, when Louisiana’s incentives dried up, with Demian Bichir’s directorial debut “Un cuento de circo & a love song” and Juan Curi’s comedy “Hypnotized” (aka “Mind Puppets) among the last to be made there.
“I don’t mind that much about making a profit or not, what I do mind is getting my investment back,” said the former banker.