Well, the word cartel actually means "a combination of business firms to control production and marketing and to avoid competing with one another." With this in mind, Javier C. and Alex Ladd, the principals of DVSX, joined forces with Empire Video Distributor President Roy Karch, and XCartel was born.
"XCartel is the perfect name for us," Javier C. said. "It's all about independent individuals coming together, united in a common cause. In this case, it just so happens that the cause is porn." It was no coincidence that Karch (not to be mistaken for the director with the same name) Javier C. and Ladd came together on the project.
Karch had decided to start a production company to complement his wholesale distribution company, Empire Video. About the same time, Javier C. and Ladd toyed with the idea of venturing out to build on their own empire. The trio knew each other through the industry, so when Karch suggested teaming up, all three had that "aha!" moment, realizing that their shared goals meant it was more than just a passing conversation.
They didn't waste any time improvising a business model that defies industry standards. While many directors sell their own product, the scenario creates huge responsibilities, often in areas that lie outside a director's expertise. Marketing and distribution take time and energy away from focusing on production. According to Adam Jay, XCartel's head of production, it puts directors in a position of constantly working overtime to get the job done right and cover all the bases. In the end, the product suffers.
XCartel takes care of the problem, Jay says, by doing all the grunt work for its directors.
"Our combined experience, in all aspects of the industry, allows our partner filmmakers to concentrate on making movies and leave the heavy lifting to us," Jay tells XBIZ. "The three partners are very connected with the whole distribution stream from distributors to retailers to even the end user. So I think we have a nice grasp of what is salable — from concept to packaging — and that we have the ability to take that information and put it to good use on the filmmaker's behalf."
The premise is simple: With veteran Ed Kail heading the sales staff, a warehouse to store the movies and the ability to ship out easily, XCartel can move more of a director's product than he could alone. To make the setup even more appetizing for filmmakers, they are allowed to keep ownership of their own work. This bottom line is less headache for more pay.
"We've run into a lot of extremely talented directors who want to control their own destiny," Ladd said. "But they don't necessarily have the expertise in sales, marketing and distribution. With XCartel, they can concentrate their energies on doing what they do best — making movies."
Getting the company off the ground hasn't been a breeze. In particular, the company faced one major struggle along the way — finding reliable directors who can afford to produce their own movies on a regular basis. So Javier C. and Ladd worked overtime to seek out talented directors and content providers, introduce themselves and build relationships.
With that hurdle cleared, XCartel can now concentrate on putting the same effort into sales and support of the DVDs it distributes as its directors put into creating them. "It's important that the quality of the packaging reflects the quality inside," he says.
The three principals also are trying to make a difference in the industry in other ways; for example, by treating directors with honesty and respect.
"If we can become known for that and become a haven for filmmakers who want a fair shake, then we would be very proud," Jay says. "Hopefully that kind of business practice would reflect well on the industry as a whole."
