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www.nytimes.com/1981/11/30/movies/robert-rehme-king-of-the-low-budget-shocker.html
HOLLYWOOD HOW does a small distribution company compete with the major studios? When the big elephants of Hollywood - Columbia, Universal, Paramount, Warner Bros., 20th Century-Fox and M-G-M - are routinely the first to be offered every polished project and every gleam in a screenwriter's eye, how does a mouse like Avco-Embassy manage to survive?
On a diet of agressive salesmanship, horror films, garish publicity and a frugality that stretched dollars until they looked like rubber bands, Avco-Embassy increased its revenues from $20 million in 1978 to a projected $90 million this year.
The projection is probably too low, because ''Time Bandits,'' which was rejected for distribution by every major studio, has earned a sizzling $17 million in its first 17 days of release. Sold for $25 Million
And last week, Avco-Embassy, which had been on the block for the last year, was sold for $25 million in cash to Norman Lear and A. Jerrold Perenchio, who outbid Tom Laughlin, star and director of ''Billy Jack.''
Such horror movies as ''The Fog,'' ''Prom Night,'' ''Phantasm,'' ''Scanners'' and ''The Howling'' brought back rentals of 5, 10 or even 15 times their cost to Avco-Embassy. In Hollywood, where a successful executive is known as ''a good piece of horseflesh'' to be stolen, the executive responsible is no longer at Avco-Embassy, of course. Robert Rehme has moved to Universal as president of marketing and distribution.
Sleek and quivering with energy, the 46-year-old Mr. Rehme resembles nothing so much as a greyhound at the exact moment he plunges in pursuit of the mechanical rabbit. From the time he got a 45-cent-an-hour job as an usher when he was 15 years old, Bob Rehme has never been in any other business. ''My life's like a kid's in a candy store,'' he says. ''In my spare time, I go to movies.'' Begged for $5 Million
When he became vice president of sales at Avco-Embassy in 1978 and added the title of president a year later, his problem was not what movies to make but rather how to convince Avco, the financial conglomerate that owned the company, to allow him to make any pictures at all.
In the late 1960's, when Transamerica was buying United Artists and Gulf and Western was purchasing Paramount, Avco bought Joe Levine's Embassy Films and coasted for a year and a half on $57 million in rentals from Mr. Levine's ''The Graduate.'' By the mid-70's, with a string of profitless years, all production funds had been cut off.
Mr. Rehme begged for $5 million from Avco and got it. He stretched it over eight movies. ''The important thing was not to put Avco at risk for any major amount of money,'' he says. ''We'd finance a movie and find a financial group to buy us out, so we could use the money over again.''
Last year, he budgeted $4 million for ''Take This Job and Shove It,'' sold most of Avco's investment before the movie was made and used the money again for the $7.2 million ''Escape From New York,'' Avco's most successful movie so far, by laying off $3.5 million on a risk investor and arranging a complicated $3.5 million tax shelter. Avco retained all theatrical and nontheatrical distribution rights to each movie. 'Only so Many Dollars'
''The big thing a minor distributor had better do is know his place and not try to become an instant major,'' Mr. Rehme says, his long, lean face controlled by bright, ambitious eyes. ''There are only so many dollars spent at the box office each year. A minor can expect to get 1 or 2 percent of them. If your production budget is so high you need 10 percent of the market, you're heading for disaster - because hot scripts, hot directors and good theaters won't be offered to you.
''I never opened a picture at Christmas - not even 'Scanners,' which I felt would be a hot commercial picture - because I knew I couldn't get major theaters. We booked 'Scanners' for Jan. 25 and got all the good theaters in the United States because the soft Christmas pictures had fallen out of bed.''
At Avco-Embassy, aggressiveness, cleverness and flexibility had to be substituted for money. ''We needed better and hungrier salesmen because our product wasn't as good as Paramount's,'' Mr. Rehme says candidly. ''To promote ourselves as a viable alternative to the major studios, we had to make ourselves extremely visible with giant previews, wine-and-cheese parties and heavy trade-press advertising, in which we crowed over even a modest success. 'Timing Is Everything'
''We had to be flexible on play dates and release our pictures regionally. That turned out to be an advantage, because we could tinker with our campaigns. We changed the advertising on 'The Fog' to show more jeopardy before we opened in New York, and the picture went through the roof.''
''Timing is everything in life,'' adds Mr. Rehme, who was being offered ''a job a day'' by the middle of last year. Avco-Embassy jumped heavily into horror films because the newly merged A.I.P.- Filmways had left a space for ''well-promoted, well-exploited lowerbudget movies.'' A.I.P. had been the largest supplier of low-budget movies, but when it merged with Filmways, the new company spurned exploitation films.
Avco-Embassy sprang into the gap. ''Since it was highly unlikely we'd attract a Scorsese or Coppola,'' Mr. Rehme said, ''we had to use the Roger Corman technique and attract the important directors of tomorrow. We signed John Carpenter to do 'The Fog' before 'Halloween' was even released.'' Scared and Laughing at Screening
One of Avco-Embassy's first successes under Mr. Rehme was ''Phantasm,'' a low-budget horror film that, Mr. Rehme frankly admits, ''didn't make sense.'' Every week, distributors see 15 or 20 finished movies that are looking for a home. Mr. Rehme chose ''Phantasm'' because ''people in the screening room were scared and laughing at the same time.''
Having gone from theater manager to movie-studio publicity agent to the owner of 11 theaters and booking agent for 200 more, Mr. Rehme has an almost singular background on both sides of the movie fence.
Avco-Embassy booked ''Phantasm'' on a Saturday midnight at one theater in West Los Angeles, and ''an inordinate amount of money, maybe $10,000, was spent to advertise that one show.''
Avco-Embassy took pictures of the line in front of the theater and trumpeted the result in an advertisement. After the midnight showing and advertisements had been repeated, the movie was ''so popular'' it spread to midnight showings at six theaters -carefully planned in advance - then to a successful regular run at 30 theaters. Not All Horror Movies
A second success, ''The Howling,'' came after Mr. Rehme hired a publicity agent to crisscross the country with bits of the film to show at film-fantasy clubs and conventions.
All of Avco-Embassy's films were not horror movies. ''Hopscotch,'' ''The Onion Field'' and ''Watership Down'' were critical and mild commercial successes, ''Murder by Decreee'' was an honorable failure, and ''Death Ship,'' ''Hog Wild'' and ''Winter Kills'' were just plain failures.
What will happen to the decisive Mr. Rehme - who believes in ''the Japanese style of management'' and has formed a softball team on which he will, as usual, play first base - at staid Universal, where the distribution apparatus has been in disarray for several years, will be interesting to watch.
''I had,'' he said, ''the built-in advantage of being the underdog. Now, unfortunately, I'm the ominous Black Tower of Universal. ''But,'' he added cheerily, ''I'll change all that.''
HOLLYWOOD HOW does a small distribution company compete with the major studios? When the big elephants of Hollywood - Columbia, Universal, Paramount, Warner Bros., 20th Century-Fox and M-G-M - are routinely the first to be offered every polished project and every gleam in a screenwriter's eye, how does a mouse like Avco-Embassy manage to survive?
On a diet of agressive salesmanship, horror films, garish publicity and a frugality that stretched dollars until they looked like rubber bands, Avco-Embassy increased its revenues from $20 million in 1978 to a projected $90 million this year.
The projection is probably too low, because ''Time Bandits,'' which was rejected for distribution by every major studio, has earned a sizzling $17 million in its first 17 days of release. Sold for $25 Million
And last week, Avco-Embassy, which had been on the block for the last year, was sold for $25 million in cash to Norman Lear and A. Jerrold Perenchio, who outbid Tom Laughlin, star and director of ''Billy Jack.''
Such horror movies as ''The Fog,'' ''Prom Night,'' ''Phantasm,'' ''Scanners'' and ''The Howling'' brought back rentals of 5, 10 or even 15 times their cost to Avco-Embassy. In Hollywood, where a successful executive is known as ''a good piece of horseflesh'' to be stolen, the executive responsible is no longer at Avco-Embassy, of course. Robert Rehme has moved to Universal as president of marketing and distribution.
Sleek and quivering with energy, the 46-year-old Mr. Rehme resembles nothing so much as a greyhound at the exact moment he plunges in pursuit of the mechanical rabbit. From the time he got a 45-cent-an-hour job as an usher when he was 15 years old, Bob Rehme has never been in any other business. ''My life's like a kid's in a candy store,'' he says. ''In my spare time, I go to movies.'' Begged for $5 Million
When he became vice president of sales at Avco-Embassy in 1978 and added the title of president a year later, his problem was not what movies to make but rather how to convince Avco, the financial conglomerate that owned the company, to allow him to make any pictures at all.
In the late 1960's, when Transamerica was buying United Artists and Gulf and Western was purchasing Paramount, Avco bought Joe Levine's Embassy Films and coasted for a year and a half on $57 million in rentals from Mr. Levine's ''The Graduate.'' By the mid-70's, with a string of profitless years, all production funds had been cut off.
Mr. Rehme begged for $5 million from Avco and got it. He stretched it over eight movies. ''The important thing was not to put Avco at risk for any major amount of money,'' he says. ''We'd finance a movie and find a financial group to buy us out, so we could use the money over again.''
Last year, he budgeted $4 million for ''Take This Job and Shove It,'' sold most of Avco's investment before the movie was made and used the money again for the $7.2 million ''Escape From New York,'' Avco's most successful movie so far, by laying off $3.5 million on a risk investor and arranging a complicated $3.5 million tax shelter. Avco retained all theatrical and nontheatrical distribution rights to each movie. 'Only so Many Dollars'
''The big thing a minor distributor had better do is know his place and not try to become an instant major,'' Mr. Rehme says, his long, lean face controlled by bright, ambitious eyes. ''There are only so many dollars spent at the box office each year. A minor can expect to get 1 or 2 percent of them. If your production budget is so high you need 10 percent of the market, you're heading for disaster - because hot scripts, hot directors and good theaters won't be offered to you.
''I never opened a picture at Christmas - not even 'Scanners,' which I felt would be a hot commercial picture - because I knew I couldn't get major theaters. We booked 'Scanners' for Jan. 25 and got all the good theaters in the United States because the soft Christmas pictures had fallen out of bed.''
At Avco-Embassy, aggressiveness, cleverness and flexibility had to be substituted for money. ''We needed better and hungrier salesmen because our product wasn't as good as Paramount's,'' Mr. Rehme says candidly. ''To promote ourselves as a viable alternative to the major studios, we had to make ourselves extremely visible with giant previews, wine-and-cheese parties and heavy trade-press advertising, in which we crowed over even a modest success. 'Timing Is Everything'
''We had to be flexible on play dates and release our pictures regionally. That turned out to be an advantage, because we could tinker with our campaigns. We changed the advertising on 'The Fog' to show more jeopardy before we opened in New York, and the picture went through the roof.''
''Timing is everything in life,'' adds Mr. Rehme, who was being offered ''a job a day'' by the middle of last year. Avco-Embassy jumped heavily into horror films because the newly merged A.I.P.- Filmways had left a space for ''well-promoted, well-exploited lowerbudget movies.'' A.I.P. had been the largest supplier of low-budget movies, but when it merged with Filmways, the new company spurned exploitation films.
Avco-Embassy sprang into the gap. ''Since it was highly unlikely we'd attract a Scorsese or Coppola,'' Mr. Rehme said, ''we had to use the Roger Corman technique and attract the important directors of tomorrow. We signed John Carpenter to do 'The Fog' before 'Halloween' was even released.'' Scared and Laughing at Screening
One of Avco-Embassy's first successes under Mr. Rehme was ''Phantasm,'' a low-budget horror film that, Mr. Rehme frankly admits, ''didn't make sense.'' Every week, distributors see 15 or 20 finished movies that are looking for a home. Mr. Rehme chose ''Phantasm'' because ''people in the screening room were scared and laughing at the same time.''
Having gone from theater manager to movie-studio publicity agent to the owner of 11 theaters and booking agent for 200 more, Mr. Rehme has an almost singular background on both sides of the movie fence.
Avco-Embassy booked ''Phantasm'' on a Saturday midnight at one theater in West Los Angeles, and ''an inordinate amount of money, maybe $10,000, was spent to advertise that one show.''
Avco-Embassy took pictures of the line in front of the theater and trumpeted the result in an advertisement. After the midnight showing and advertisements had been repeated, the movie was ''so popular'' it spread to midnight showings at six theaters -carefully planned in advance - then to a successful regular run at 30 theaters. Not All Horror Movies
A second success, ''The Howling,'' came after Mr. Rehme hired a publicity agent to crisscross the country with bits of the film to show at film-fantasy clubs and conventions.
All of Avco-Embassy's films were not horror movies. ''Hopscotch,'' ''The Onion Field'' and ''Watership Down'' were critical and mild commercial successes, ''Murder by Decreee'' was an honorable failure, and ''Death Ship,'' ''Hog Wild'' and ''Winter Kills'' were just plain failures.
What will happen to the decisive Mr. Rehme - who believes in ''the Japanese style of management'' and has formed a softball team on which he will, as usual, play first base - at staid Universal, where the distribution apparatus has been in disarray for several years, will be interesting to watch.
''I had,'' he said, ''the built-in advantage of being the underdog. Now, unfortunately, I'm the ominous Black Tower of Universal. ''But,'' he added cheerily, ''I'll change all that.''