Todd Wagner: Groovy Geek

It's every tech geek's dream. Make a ton of money, head to Tinseltown and start making movies. Wave at all the cool kids from school languishing at the bottom of the creative ladders, grabbing coffee and answering phones, with their Harvard degrees and film school debts burning holes in their pockets while you swoop in, get invited to the big parties and see your executive producer credit light up the screen.

The movie business is littered with pulp fact of otherwise financially savvy investors who have thrown their hard-earned bucks at the silver screen quicker than you can say, "It ain't ever coming back, Bud."

Enter Todd Wagner, former corporate and securities lawyer, founder of Broadcast.com, philanthropist... and movie mogul.

Wagner's is a common story (wink). Grow up in Gary, Indiana (apparently without secret Napoleonic dreams of greatness), grind it out as a corporate and securities attorney for seven years, then start an Internet company from your back room with your college buddy who just sold a bar and is looking for a venture of sorts. The start-up happens to be the first company to broadcast audio and video over the Internet, and you sell it to Yahoo for, oh... $5.7 billion.

Your buddy, Mark, buys the NBA's Dallas Mavericks and you start yourself a foundation that connects underprivileged children across the nation to the glories of technology. (That Wagner is yet to be married and has no children himself makes the foundation even more extraordinary.) And after a couple of years of billionaire bliss, you and your buddy decide to join forces again, this time to launch yourselves on the entertainment industry.

"Initially, I was just trying to figure out what I wanted to do next, what my last career would be, because I no longer needed to do things for money And I really always loved movies, so I thought maybe I'd go out and finance a couple of movies and see if it was something that was interesting to me."

Fast-forward five years, and the digital media enterprise that Todd Wagner and Mark Cuban now captain includes:

• two production companies, 2929 and HDNet, shooting on film and digital High Def respectively;
• the largest art house independent theater chain in the country;
• a theatrical distribution company;
• a home distribution company; and,
• two TV channels.

Have they succeeded? Well, two of their movies, Good Night and Good Luck and Enron: The Smartest Guys in the Room, garnered seven Oscar® nominations. Not bad for another start-up.

"They certainly laughed at us when we first came out to Hollywood. There were lots of articles that said, ‘You'll be running out of town in two years with your tails between your legs.' But you know what? I didn't spend all this time making all this money to just give it away. I have a foundation. I give my money through the foundation, and I'm certainly not going to give it away to the movie industry."

So what sets Wagner apart from other celluloid-hungry thrill seekers? Research. Hard-core industry due diligence.

"Initially, I just went out [to Hollywood] to learn how movies got made and to see if it would be enjoyable. The problem is, the entrepreneur in me started saying, ‘Why is it like this? Why is it like that? Why do movies cost so much? Why do 50 percent of people on a movie set sit around 50 percent of the time?' And I took my time to find out. The first year or two out there, I literally just met people and took interviews. I asked them lots of questions: What parts of the system worked? What didn't? Why were things the way they were? And you'd get some really honest answers from people. And the truth is, they were very much afraid of technology and what it might mean."

What does technology mean? According to Wagner, technology means what he lovingly refers to as "cable on steroids." It means allowing the consumer to be in charge of precisely when and how they choose to consume their media.

In practical terms, it means a variety of tracking and screening strategies but, so far, it means the much-discussed "Day and Date" debate, the new distribution strategy whereby movies (such as Steven Soderbergh's Bubble) are simultaneously released in the theaters and on DVD - not a move to win friends in Tinseltown.

"I'm a realist. If we talk about a blockbuster movie in the U.S., it does what? Around 50 million in box office, which means you sold 5 million tickets. There are 300 million people in our country, so you reached less than 2 percent of the country. And that's with a blockbuster. So the point is, if 98 percent of the country isn't going to see the movie in a theater, shouldn't we try and increase our audiences by allowing them to have more choice in how they consume it?"

Are such thoughts welcome? Depends on where you're sitting. Wagner's own bottom is now firmly ensconced on the boards of the AFI and the Tribeca Film Festival. Fine recognition for someone who, five years ago, was merely toying with the idea of investing in a couple of films. But some, most notably the old schoolboys and girls at the studios, aren't quite so enamored with the proposed strategies accompanying his art-world ascent.

"We've got a lot of pushback because we're seen as being anti-theater. Nothing could be further from the truth. We own a theater chain, after all. But I come from technology, a world where you must innovate or you will die. Whereas the movie industry has fought change with every technology innovation of the past 80 years, literally from player pianos to the radio to television to the VCR. Is there any reason to think this is different? And in their defense, I would do the same thing. They control content, and if I control content and can go and lobby in D.C. and extend my copyright period or I can bully people out of a market, then I win.

But the reality is because things are now digital, there is a shift in consumer behavior that will not allow "the man" to dictate how I get something. The music industry learnt the hard way that people want choice, and so either we go with the flow or you're going to be fighting something that will inevitably move away from you. And I always prefer to be proactive and say, ‘How can we make it a better business?'"

Wagner believes it's his role to focus on the business aspects, and consciously leaves the directors to enjoy the creative parts of their jobs. "Just like in sports, hire your coach and let him coach the players. If you don't like the coach, fire him; but don't try and get into the huddle and make the play." However, that's not to say he's not involved in the creative process at all. Wagner personally green-lights each and every project under the Wagner/Cuban banners, and he's proudly instrumental in the shaping of the kinds of stories they choose to tell.