Greetings HHSE Friends & Shareholders - As per prior postings and communications, Hannover House is in the process of adding a substantial new venture to our core business... steps that will "revolutionize" the Company's profile, stature and revenues.... a new venture so revolutionary to our business model that we've even considered using the word "Revolution" as part of the Newco-entity name that will be handling these new activities.
So what is this Newco entity? We will announce details at the SH meeting.
However, as previously alluded and disclosed, this is a structure to facilitate the generation and raising of outside capital and presales for the financing and distribution of high-profile feature films. For instance, we have already announced that one of the films - the mid-level budgeted "LEGEND OF BELLE STARR" - is being privately funded under a venture which will enable Hannover House to be the distribution agent (without being the investor or "on the hook" for the production & releasing costs). HHSE gets to handle the film's release with all upside and no downside. Take that formula and multiply it by five-fold and you'll understand why it's a revolutionary idea for a Company that otherwise has been operating in the lower-end "direct-to-video" arena.
We've always known that the path to big revenues was paved with big releases. What we did not have solved was a structure to finance bigger titles without unreasonably burdening the Company.
How did Artisan Entertainment grow from a Hannover House style video distributor into Lionsgate? They did it with "THE BLAIR WITCH PROJECT" followed quickly by "STIR OF ECHOES" and "PI" as theatrical releases. How did Summit Entertainment grow from a boutique international sales agency into a $500-million generating major independent? They did it with the "TWILIGHT" franchise, followed by three other credible theatrical titles in short order.
Those "in the know" might say that Hannover House is "one title away" from being a major independent studio. All it takes is a "Blair Witch" or a "Paranormal Activity" or even a "Big Fat Greek Wedding" and the Company is immediately in a different realm. Will it happen? Management thinks so, but management also knows that it won't happen without the support of significant outside capital. And it is within this model that our plan represents quite a revolution.
Meanwhile, HHSE will continue to churn out our core DVD and Book releases with greater frequency and stature... building a stronger foundation and library as we reach for the high-end winners. We think 2014 is our year for transformative growth... and we hope that our long-term supporting shareholders will enjoy the benefits of their prior support and enduring patience.