HispanicBusiness

Just as film directors and producers often pitch their projects by comparing them to blockbuster movies, Arenas pointed to the success of "mini-majors" like New Line and Miramax during its pitch. Both companies were started by entrepreneurs who identified a niche market in independent film, and both eventually outgrew their niche and were acquired by major studios. "Once you're successful, you're not 'independent' anymore - you're a success," says director Gregory Nava, who worked with Arenas to promote his films Selena and Mi Familia. "Now Arenas wants to try to do this. If they succeed, they'll become a major [studio]."

And what separates Arenas from the horde of small independent production houses is the company's Hispanic focus. Here the comparisons to Miramax and New Line end. "That's the Arenas dream - to reach the general Latino marketplace," says Larry Gleason, the company's president of distribution. "So far, no one has come up with a marketing campaign to reach the Latino audience."

But statistics indicate a growing market. According to Arenas, the average Hispanic goes to the movies 10 times per year compared to less than nine times for the overall U.S. market. Also, Hispanics tend to be "avid" moviegoers, meaning they see a movie when it first opens. More than 40 percent of Hispanic moviegoers attend during opening weekend. For movies that Arenas has marketed for major studios, 21 percent to 30 percent of the opening weekend attendance was Hispanic, while for Empire it was 51 percent, Mr. Gleason says.

Historically, Hollywood has addressed Hispanic culture through Spanish-language films or English-language crossover films. Neither genre addresses the English-dominant U.S. Hispanic. "The films that have done business - El Crimen de Padre Amaro, Como Agua Para Chocolate - reach the Anglo art-house market. They really didn't do business in the Latin market," says Mr. Gleason.

For Marco Polo, it is that potential opportunity that added to its investment interest. "The world of global entertainment is pretty fancy so you need to be careful to position your investment in terms of size and risks," says Mr. Galera. "Yes, Antonio Banderas is there [in the Arenas mix], but in the end the goal is to build a business. And we think that opportunity is better understood from the perspective of Latino culture."

Arenas plans to produce three films per year and acquire up to three more from foreign producers. Each project will carry a maximum budget of $5 million. Arenas also will produce up to four direct-to-video projects with a budget in the $1-million range. "Don't be surprised if five or seven years from now, Arenas becomes what New Line and Miramax are today," Mr. Pozo says.

Some of these films will ship overseas, trying to combine Hispanic subject matter with the style of filming in the U.S., the only country that consistently produces movies for the global market, according to Mr. Gleason. Other projects will aim for domestic distribution for English-dominant U.S. Hispanics. "The growth market is second- and third-generation Latinos, and they are a big chunk of the movie-going audience," says Mr. Acosta. "A lot of mainstream Hispanic agencies don't understand that market. They concentrate on the older, Spanish-dominant audience because that's where they [the agency people] came from."

But even in its niche, Arenas faces stiff competition. Besides the debut of Imagining Argentina, early 2004 will see the launch of SiTV, a cable network for English-dominant Hispanics; the start of VOY Network, a TV, print, and Internet initiative from StarMedia founder Fernando Espuelas; and the continuation of the TV shows George Lopez (ABC), American Family (PBS), and Urban Latino (syndicated). "Latino Hollywood will continue to grow," Mr. Acosta says. "Studios will put more projects in the pipeline. The trick is to pick the right projects."

And that's where the Arenas record, as well as Mr. Pozo's previous experience as an independent producer and director of special markets at Universal, comes to the fore. "We made money when the Latino market wasn't hot," Mr. Pozo says. "Why would we lose money now that it's the key demographic in the country?"