Stacy Spikes, founder of the Urbanworld Film Festival, and Chairman Emeritus of Urbanworld Film Group — a multi-faceted cinematic enterprise spanning the festival, a film production company, an international distribution company, and a non-for-profit, film-preservation foundation — speaks to creative.destruction about the entrepreneurial value of faith, bravery, and surprisingly enough, failure.
CREATIVE.RECONSTRUCTION: Let’s begin by assuming that the readership is unfamiliar with Urbanworld. Can you briefly describe what it is and what it is that you do?
STACY SPIKES: Urbanworld is the largest minority film festival in the US. It’s both a non-for-profit and a for-profit enterprise: the non-for-profit is focused on increasing [film-making] opportunities for people of color, focused on the [filmed] works of people of color, and focused on helping people of color remain a part of, and increase our involvement in the contemporary cultural landscape; the for-profit is a distribution company that’s driven by the same mission, but more as a business — one trying to find commercial avenues to achieve our goals. The driving idea was: Instead of waiting for others to do it, why not just do it yourself.
Do you recall what the initial investment was? What, by way of capital, did you initially raise?
Zero. Basically, for the first five years there was no outside investment; anything that happened came out of my pocket. The Sony [sponsorship] deal, netted us $2.5M dollars. Soon after that, Black Enterprise came in with another $2.5M dollars. But the company was born right before 9/11 and we couldn’t continue to raise the capital we needed. Immediately after 9/11, you had to be a cash-flow positive company. People weren’t putting money into start-ups anymore. The Internet bubble had burst, and the Wall Street bubble burst at the same time. So we kind of put that on ice, we released four films, and then when the landscape righted itself, we got back to the festival.
Do you feel comfortable discussing revenue numbers?
The festival itself ranges roughly from $300K–$1.2M; that’s about the range.
And what are some of the factors that determine those returns?
…Multiple events. If we do quarterly events, we can get into the higher range. So we can do the film festival, the college tour, a film series and lecture series, a traveling version of the festival; it creates many more opportunities to create income. And largely the money is made from underwriters and sponsors — that’s the number one revenue source. Ticket sales, merchandising, etc., they’re a distant second.
When did you decide, or realize, that it would be valuable to Urbanworld to diversify and form the Group?
We saw that there were no urban distributors. The festival was a means of saying to the market “Hey, aren’t these movies great?! You guys should put them out!” But they didn’t get put out. So we decided that we should do it, instead of waiting for Hollywood to catch on and do it.
Why do you think the industry seems to be so resistant to releasing urban-themed films?
One part is the myth that there is no foreign market [for those films]. If you think of [potential returns] as a whole pie, and you take half the pie away, I’m half as interested. It’s also important to realize that publicly traded companies have a job to drive stock price. Hollywood appreciates money just like everybody else, but it’s often more dimensional than that; it’s also about the time and effort invested. When you’re an independent, private company, you really get all of your bread and butter out of the US and you’re not as concerned with foreign sales. You can live and die in America. If you’re a publicly traded company that focuses on your stock price, you’re almost driven by hype more than anything else. So what are you gonna do? You’re going to release the “Matrix” trilogy, the “Harry Potter” movies, “The Lord of the Rings” trilogy, because they raise studio awareness and generate international sales. You don’t care as much about nurturing marginal or unheard stories — grassroots initiatives. With the “tentpole” events, you can literally make money before film is even screened. You can decide to make a billion-dollar trilogy and pre-sell it before it’s even done. Niche-focused ethnic films don’t interest anybody, or rather, they don’t interest everybody. Big movies with ensemble casts, however, can and do attract everybody. Building an entire community project — malls, schools, etc. — is less risky and proportionally less expensive than providing loans to build individual houses.
But that being said, there still seem to be many niche-focused independent films being made that have little or no legitimate chance of becoming blockbuster ventures. Where’s the disconnect there?
That’s the benefit of knowing — or being — mom’s dad’s uncle’s friend. It’s the trickle-down effect. Most communities don’t have that kind of money or that kind of risk tolerance. It’s not that others aren’t innovative and don’t finance movies via credit cards, etc., but….
You mentioned that, in part, the film festival was inspired by the fact that previously there was nothing like it. Would you say that there was also a pro-social inspiration as well? Were you mindful of the possibility that building the festival might inspire others to make films?
I think the [filmmaking and film-going inspiration] was already there, and the business model came second. When you’re at the festival and you see thousands of patrons come out to see these — and their — movies, those same people will by tickets at the movie theaters or buy the DVD. It’s important to grow where you’re planted. Become a hit in your own neighborhood, and then go on the road.
How was the idea initially perceived by the forces you approached, and by the industry at large?
The festival was helped a lot by timing. The idea was floated at precisely the right time; it was almost easy.
Your “insider” status helped, presumably. 
[Nods] Here I was the Vice President of Marketing at Miramax, doing business with all the brands and resources that I called upon to become part of the initiative. I can’t minimize that at all; it gave the festival an automatic leg up. Whereas many people started their festivals out of passion, but they weren’t in the business, per se.
Remember, there were other “black” film festivals out there before ours, so the concept wasn’t new. But never before in the history of the industry were black films being made in that volume, so you had that effect. Then here’s Vibe [magazine], here’s BET, here’s the hip-hop movement that itself is moving into film, and all of those things come together at the same moment in time — and there’s Urbanworld. We were just standing there.
What are the capital outlays required to mount the festival?
We never give those numbers out, but roughly several-hundred-thousand dollars a festival. Not quite a million dollars, but in the high hundred thousands. …
Can we backtrack a bit? Can you talk a little about your career trajectory?
I was supposed to go to Grambling University, like both of my parents. And I said to my mother and father “I want to take off the summer, travel, and move out to LA and just try it.” My father said “How much money do you have in your pocket?” I said “300 bucks.” He said “Well good; that’s all you’re getting, ‘cause I’m not financing it.” “You want to go to college — fine. But if you’re going to do this — you’re on your own.”
So I went out to LA [from Houston], with some friends. I get out there and — this is the shorter version, because I kind of floated around for a while — Berry Gordy had just sold Motown to Universal, and so Motown got moved to Los Angeles. They were in the process of staffing up, and they needed everything. I got a job in the art department, as a gopher. A position opened for something called a “product manager.” So I walked into the president’s office and told him that I wanted to try out the job. He said “well, I’ll give you a shot, but we’re going to fill your current position in the interim. So if you fail, you’re out.” “I’m gonna give you a group and let you start on them, and we’ll see what happens.” The group was Boyz II Men….
I then proceeded to do soundtracks for “Do The Right Thing,” and for “Jungle Fever.” Eddie Murphy joined the label after we did “Boomerang.” And then we ended up breaking Elvis Presley’s record by lasting 52 weeks at Number 1 with the [Boyz II Men] song “End of the Road.” So soon enough I had Stevie Wonder, Boyz II Men, Spike Lee, Eddie Murphy. Queen Latifah joined the label. I helped her win a Grammy for “Queen.” And I was all of 21 years old! Needless to say, I never made it to Grambling.
I then went to Sony and did “Bad Boys” with Will Smith and Martin Lawrence, and a bunch of other films like [Robert Altman’s] “Pret-a-Porter.” Miramax then called me up and said that they wanted me to be their Vice President of Marketing. I said “…of music?” They said “…of everything.” They give me a script and they tell me that they want an answer in 24 hours. That script was “Scream.” I did “Scream”; I did “The Crow”; I did “Trainspotting,” and “Don’t Be A Menace in South Central While Drinking Your Juice in the ‘Hood.”
At around that time, October Films was getting off the ground, and I jumped over there to become Head of Publicity. Miramax’s marketing department had a very high turnover rate. In marketing, you can’t really win: if the movie’s a success, it’s because production made a good movie. But if the movie’s a failure, it’s your fault. Unfair, considering how essential marketing is to entertainment, but there it is.
Talk a bit about the obstacles you encountered in mounting the festival and growing the Urbanworld enterprise.
The biggest challenge is the courtship of sponsors every year. Some sponsors return, but by and large we have to sell our usefulness to a new sponsor pool each year. Also, our ups and downs and effected by the kinds of films being made, so when a “Collateral” comes out — great! But there really wasn’t much in the way of urban content produced this year. We tried to get “Miami Vice,” but the film wasn’t finished in time.
Why do you think sponsor relationships are so difficult to sustain?
The sponsors are driven by pressures to maximize quarterly returns. They’re often publicly traded companies and they have limited budgets for these kinds of initiatives. Frankly, giving money to an organization that helps rebuild inner city schools, or alleviates some grave disease, is going register a bit more than supporting an organization that seeks to promote film-making. The chosen initiatives change all the time.
How long did it take you to assemble the early festival-production team?
Not long. It was just a few phone calls and the gathering of interns. I put the money down for the theater — $300, interestingly enough. Urbanworld 1 screened 30 films. But this is the best story: On opening night we’re supposed to debut Bill Duke’s film “Hoodlum.” At the last minute, Bill [Duke] can’t come, Andy Garcia’s [who stars in the film] wife got sick, Laurence Fishburne is otherwise engaged, it’s raining. So I’m in the back of the cab en route to the theater, thinking to myself “this is a disaster.” Here I am $20K in the hole, all told, and I’m on the verge of losing it all.
So the screening is scheduled at the [now defunct] Gotham Theatre, and I tell the cabbie “drive around the block.” My plan was to sneak in through the back. I didn’t even want to walk through the front door. As we drive by, I see a few people standing outside the theater waiting to go in — in a torrential downpour, remember. We turn the corner and there’s a line snaking all the way down the block!
Closing night was “Soul Food” [Kenneth “Babyface” and Tracey Edmonds’s first feature film], and they brought it to the theater on the plane! We hadn’t seen it; it didn’t even have final credits on it! The cast turned out — Vivica Fox, Mekhi Phifer, Babyface Edmonds; it was at the [now defunct] single-screen Radio City Theater — and it was madness! Sold-out show, packed to the rafters.
The New York Times ran a major article on the festival calling it “‘an idea whose time had come.’” We’ve essentially been chasing the magic of that first year ever since. The same forces that gave me that job at Motown, the same forces that took me to Columbia, the same forces that would let a twenty-something-year-old black exec exist at Miramax — and they had just released “Pulp Fiction,” which at the time was the hottest film on the planet — came together to validate the festival. None of that was me. I was — and am —just a tool for the universe to do its bidding.
Would you have described yourself as a spiritual person prior to that?
Absolutely. Faith is more important in business than anything. Faith and prayer — traditional and/or nontraditional prayer. You have to believe the impossible. There’s that saying “God can do the impossible, but that’s all he’s willing to do because the rest is up to you.” So anything on Earth that is humanly possible, it’s almost as of you have to run and leap and know the branch is going to be there. And in reality, you never fail, it just may take a little longer than you think. And that’s really the truth. Even with Urbanworld Films — we got a major distribution company to back us with no experience and track record. How did that happen? It’s impossible. But the meeting we had with the Sony exec’s was really telling. They were all sitting there, stone faced, and it really wasn’t going anywhere. So I said: “Let me show you the future.” I pulled out a DVD of 20-minute film, shot on a Sony DV cam for $500. “Kids are gonna make their own films, they’ll edit them on their home computers and they’ll build websites to promote them.” The movie comes on, the execs lean in, begin talking among each other, and they say “We want to do business with you.”
Conrad Hilton’s book “Be My Guest,” is an excellent primer on the connection between business and spirituality; it makes you think about things in an entire different light. Did Alexander Graham Bell create the phone or did the phone create Alexander Graham Bell? You need these people to be in a given place at a given moment for these things to happen. [Henry] Ford created four companies that failed before he found success with the Model-T. It’s almost as if these spirits need to be crushed into dust and reinvent themselves in order to succeed. Very, very, very few people succeed on their first try; it’s the missteps that help you find direction.
What’s the ideal exit strategy for you and Urbanworld?
I don’t know that there is one at the moment. We have discussed the possibility of selling it to a very strong player that may want to acquire it and provide it with greater year-round infrastructure. We look at the revenues that a Sundance or a Tribeca produce, and it underscores the importance of influencing the content output in Hollywood, because that affects the fortunes of the festival community.
If I had a dream goal for Urbanworld, it would be for it to resemble what they’ve done with the Joffrey Ballet: an environment wherein films are screened, where the craft of filmmaking is taught, and future of urban film is, at least on a creative level, secured.
We field tons of suggestions, proposals and inducements to show more films, go on the road, branch out into new media. But It’s important that we don’t overextend ourselves and sacrifice our core. Our mission is a bit different from that of the conventional film festival. There are certain kinds of films we pride ourselves on screening, distributing and supporting. That’s our crowning jewel; that’s the heart of Urbanworld.
This article was originally published in a fall 2008 edition of “The Opportunity” — the newspaper of the NYU Stern School of Business.
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