Lou Volpano had been to Orange County hundreds of times visiting friends. In 2005, he decided to up and move here, fed up with the Los Angeles traffic and lifestyle. He set up his entertainment consulting business Ascer-
tainment in Newport Beach.
But can you really run an entertainment financing and consulting business from OC? It’s where the money is, according to Volpano.
His Ascertainment helps match investors with investments in TV shows, screenplays and even ticketing software. There is “hidden value” in entertainment investments, particularly with infomercials and a move to offer TV service by telecommunications companies.
Earlier in Volpano’s career, he said he produced music festivals and managed The Blues Brothers band. He said he picked out the second single, a cover of “Gimme Some Lovin’.” He was part of the team that opened the House of Blues.
“My focus was operational,” he said. “To maximize efficiency and minimize borrowing.”
He’s consulted for Dick Clark Productions Inc. in Burbank and handled “special events” for Miller Brewing Co. of Milwaukee.
Volpano said he does some offbeat investing himself, such as buying the rights to a screenplay about the faked death of Elvis Presley and a comeback by the King.
Volpano recently talked with the Business Journal’s Sherri Cruz.
Why did you buy the rights to the screenplay “Searching for Elvis”?
There is no better opportunity than finding the hidden value for intellectual property like Elvis, who never goes out of style. It’s the “true” story of Elvis, whom having faked his death, is now hiding out, planning his comeback. But no one will believe it’s him. We added this project six months ago. We’re not going to produce it. We’re going to sell it. We have one interested party in New York.
What did it cost?
$100,000.
How did the screenplay come to you?
I used to manage The Blues Brothers band. My contacts are in the music industry.
Did you ever meet Elvis?
I met him in Memphis at Graceland in 1972. I met him again in Chicago in 1974. He was doing shows. He was not in good shape at all.
Why Orange County? It’s not an entertainment hub.
The people here in OC relate entertainment to technology. There are a lot of hidden entertainment and technology related investments in movies, DVDs, TV, telecom TV and direct-response TV (infomercials).
There’s a perfect storm coming about in TV. Telcos,Verizon, AT & T;, Sprint,are getting ready to launch TV services. There’s a triple play: Wireless, wireline and TV. Telcos will have the upper hand because (most) cable companies don’t have the phone component.
Why not stay in L.A.?
(OC) is where the growth is. There’s no denying it. Los Angeles is saturated. The liquidity is here. The creative forward-thinking private equity is here. But many don’t understand the entertainment market represents diversification in their portfolios.
How do you do business here when the business is in Los Angeles?
I haven’t found it hard at all. People visit here. They say it took less time to drive to Newport Beach than to drive to downtown L.A. I’ve been to New York more times than L.A. The growth is in OC. I just can’t say it any better. It’s so much easier down here.
Is there an entertainment market here?
No. The money is here.
How did you get into entertainment?
I used to run corporate promotions for Miller Brewing. I created the Miller Jazz Oasis (now the Miller Lite Oasis). In the 1970s and ’80s I produced some big music festivals such as Chicago Fest, where I produced everyone from Frank Sinatra to Muddy Waters to George Burns. I produced about 5,000 shows by then, and was approached by a group at that time called MTV. They wanted to have a launch preview. We launched them at Chicago Fest and no one paid them a wink. I saw it. I thought it was the greatest thing I’d ever seen. They had REO Speedwagon and Cheap Trick. It took 10 more years before MTV came about. But I had the premier. Find the value hidden in the unknowns,there’s more margin.
Why did it take so long for MTV to come about?
You have to remember, cable wasn’t invented for 500 channels. It was invented as a way to get TV into rural areas. Back then, if you would’ve told people you’d pay $150 a month for TV, they wouldn’t have believed it. Now look at the market.
Aren’t entertainment ventures riskier than others?
Entertainment is America’s largest export. If they’re not getting their piece of the pie down here in OC, we need to grab for it. OC has been a housing-based investment economy, a manufacturing-based investment economy because that is what they know. They know the land. Entertainment represents such a big part of industry and, as an investment, it’s so overlooked. With the right analysis and research it can be a lucrative investment.
How do you make money?
I get an equity stake in addition to an advisory fee.
Is music a good investment?
No. It’s a dying business. I had lunch in November with an executive of Time Warner who said, “We make less on digital downloads than we do on CDs.” What are you going to do about it? I asked. “I don’t know” was the response.
Thoughts on digital downloading?
It’s complicated by file sharing. The dilution of revenue has cut out the opportunity to pay top songwriters to record. If they record, it will be stolen. The money isn’t there anymore. The money now is being made in live touring. The kids love digital downloads but the money is in live performance. If The Beatles were around today, they’d go out of business. They didn’t want to tour.
What’s the best entertainment investment bet?
Telecom and direct-response TV (infomercials). Network TV is diluted. TV viewership has become fragmented. The cost of advertising is too high for most companies. More companies are opting to do their own infomercials. Land Rover has its own half hour show. General Electric Co. is doing it. Sears, Roebuck & Co. is doing it.
What are the advantages of infomercials?
The cost of a half hour is going to come down. Direct-response TV doesn’t have a planned schedule. Local TV stations running the spot can share in the revenue.
What do you do when an investor comes to you?
I could offer half a dozen possible investments. There’s three or four leading direct-response TV producers looking for private equity, including one here in OC.
Are there any concerns about the ethics of the infomercial industry?
The industry was beat up 10 years ago. There were a lot of fly-by-nights. Since then, the industry has raised the level of quality and ethics in direct-response TV.
What is “Great Yoga Teachers”?
It’s a TV series. It’s a plainspoken explanation of yoga. Four yoga teachers from seven Los Angeles studios participated. It launched in 2005 on Dish TV. Dish went through changes and pulled the plug. We’re looking for somebody new to distribute the show.
I bought the company (Great Yoga Teachers Inc.) about a year and a half ago. I rolled up the assets into one brand,Great Yoga. Now we’re selling off parts of it,the fitness facility management, media production and the first DVD. Great Yoga DVDs will be in big boxes (like Target, Wal-Mart) in the summer for $2.99.
I sold the DVD rights for seven years to a distributor for $40,000. After seven years, it comes back to me. The brand is expanding into retail, insurance and clothing.
Insurance?
Wellness. It’s a developing market. We think of (yoga as helping) acid reflux, back pain and headache. That’s what we focus on.
