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Shipped disc: Magic Rock handles DVDs for independent filmmakers, from taking online orders to packaging and delivery.

By Lee, Booyeon
Publication: Los Angeles Business Journal
Date: Monday, June 30 2008

FOR documentary makers, getting the movie distributed can sometimes be more difficult than capturing the story on film.

To get DVDs into the hands of viewers, independent filmmakers have had to cut a huge portion of the retail price to major distributors. Some pocket as little as 10 percent

of the retail price.

Tech startup Magic Rock enables independent filmmakers and other artists to get their product to viewers and make more money doing it. The company's software turns filmmakers into distributors so that they can cash in on 90 percent of revenues from DVD sales.

Someone who wants to order a documentary will visit a filmmaker's Web site and click on "buy." From that point, Magic Rock handles the whole e-commerce process, from payment to packaging and mailing.

"With the rise of the Internet, if all the distributor does is put the DVD on its Web site and then pass it on to other sites, you can do that yourself," said Steven Ascher, the documentarian behind "So Much So Fast," about a man who learns he has Amyotrophic Lateral Sclerosis (Lou Gehrig's Disease).

Ascher, of West City Films Inc., is using a Magic Rock software product called NeoFlix to build an e-commerce business around his documentary.

For example, on the West City Web site, when the user clicks on a shopping cart, the potential buyer is immediately routed to a new page, managed by Magic Rock. The page looks like the originating West City Films site.

When a customer orders a film, Magic Rock hosts the sales transaction, ships the DVD to the customer and maintains the inventory. The company takes a 10 percent cut, which includes the credit card transaction fee of up to 3 percent.

"We provide a business infrastructure artists can plug into that gives them a professional look," said John "JC" Chang, cofounder of Magic Rock.

The company sits on top of a sprawling 30,000-square-foot warehouse in the industrial area of Irwindale where the DVDs are packaged and shipped. The warehouse, however, doesn't belong to Magic Rock. It belongs to i-Pack DVD, a five-year-old multimedia supply chain company--Chang's other startup with another partner. The company serves as a vendor for Magic Rock.

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"People are surprised when they come here and see our operation, because it doesn't look like a year-old company," Chang said.

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