CHAPTER 16

From Junkmen to Heroes

The Story of Rhino Home Video

In the early 1900s, when Eastern European Jews immigrated to New York City they found that there were a great many businesses they were excluded from entering. As a consequence, many of them became fish men, peddlers, and junkmen, pushing their carts through the Lower East Side.

For our part, Richard and I were junkmen. Our store and stock of records were worlds away from that of a Tower Records. Our record label offices were in an un-air-conditioned, windowless loft, with asbestos taunting us from the unfinished ceiling. In our early years we didn’t have the respect or even the attention of the industry because we didn’t make hit records. Warner Brothers president Mo Ostin called us “the bottom feeders of the music industry.” Our albums cobbled together old castoffs that the major labels wouldn’t sully their hands with. This stigma was even truer with Rhino Home Video.

With his long blond hair, beard, and pale skin, Martin Marguiles—who went by the name Johnny Legend—could pass for Yosemite Sam’s svelte brother. At the store we had sold large quantities of notorious ex-professional wrestler Fred Blassie’s seven-inch EP featuring “Pencil Neck Geek.” Martin had cowritten and coproduced the song based around Blassie’s catchphrase. In 1978 we took the four tracks and enlarged the record into a Rhino twelve-inch EP, pressed on “Blood Red Vinyl.” We became friendly with Martin, Richard much more than I.

Martin and his wife, Linda Lautrec, cowrote and codirected an hour parody of the 1981 feature film My Dinner with Andre, shot on video at Sambo’s Restaurant in downtown Los Angeles. Whereas Andre presented an intellectual conversation about the theatre and the philosophy of life, My Breakfast with Blassie depicted comedian Andy Kaufman and Freddie Blassie improvising a dialogue about mundane things, like discovering that they both were germaphobic to the extent that they carried Handi Wipes. As an example of reality programming, it was twenty years ahead of its time. It was amusing, but Martin had difficulty in getting anybody to buy it. He suggested Richard take it—for no advance—and use it to establish Rhino Home Video.

I remember seeing Andy Kaufman when he’d breeze into the Rhino store and head straight for the bargain bins. I didn’t find out until much later, that from the way he was dressed, he must have been on a break from his job as a dishwasher at the Nosh in Beverly Hills. Andy wasn’t doing it for the money—he was already an established comedian—but for the experience/research.

Some record companies had Christmas parties. Having survived four years as a label, we decided to celebrate by throwing a Hanukkah party in December 1981 at the club At My Place in Santa Monica. It was a good event. We had a couple of bands play, a mock rabbi/comedian who emceed, and we gave away promotional yarmulkes. We served potato latkes and egg cream sodas. Andy was invited, but showed up after it was over. We were cleaning up when he arrived, and he proceeded to wrestle a woman, which was one of his bits at the time. It was a hard-fought contest that Andy barely won. There was more tension than I would have liked, and I felt uncomfortable with the late-night match.

To coincide with the release of our video, we held a premier party at the Nuart Theater in West LA on March 20, 1984. Kaufman attended, as well as Marilu Henner from Taxi. Richard borrowed eight toasters, and we served cheap waffles in the lobby in keeping with the breakfast motif. I was surprised at how ravenously they were consumed—none more so than by writer Richard Meltzer, who downed eight—and we had to make another run to the market for more. Because of the demand, the toasters kept overloading the electrical outlets, shutting off the power.

We gave complimentary seats to about 80 individuals, and the remaining 335 seats were sold. I was surprised that the theater sold out. There wasn’t even a seat for me. I had seen the movie, so I didn’t mind. I stayed in the lobby, and was surprised at the many laughs coming from the theater. It was another example of comedies being most effective when watched by many people.

Martin’s attractive sister, Lynne, met Andy on the set and became his girlfriend. Two months after our screening, Andy passed away from cancer. R.E.M. referred to the movie in their 1993 tribute song to Andy, “Man on the Moon.” Richard liked the reaction we received from Blassie, and with Martin’s enthusiasm, developed the division. I liked the idea of Rhino Home Video, but I wasn’t interested in their direction. I told Richard that he could do what he wanted, as long as it didn’t lose money, but that’s not what happened.

From the video compilations Martin produced for Rhino, his interests were those of a teenage boy hung up on wrestling. Scraping together movie trailers of obscure films and public domain footage, Martin compiled a number of videos with titles inspired by the world of wrestling, including the annual event WrestleMania. A sampling included: Battle of the Bombs, featuring the best scenes from the world’s worst movies; Sleezemania, trailers from such films as Jailbait and The Flesh Merchant; and Dopemania, a potpourri of antidrug public service films from decades past. Other releases were titled Weird Cartoons and Rhino’s Guide to Safe Sex. Martin’s packaging was very creative, but the videos sold minimally.

In the early days of home video, it was so novel to watch a movie at home on one’s own machine that mediocre titles sold much better than they should have because the movie studios were reluctant to enter this field. This encouraged companies to release marginal videos to get into the marketplace because it seemed as though everything was selling. By the time we entered the arena, the bloom was off the rose.

Our most notorious release was Orgy of the Dead, a little-seen movie written by the world’s worst director, Ed Wood. Wood’s reputation was solidified in Harry Medved’s 1978 book The Fifty Worst Films of All Time. The total from the three thousand ballots submitted by knowledgeable film fans resulted in Plan 9 From Outer Space—which Wood wrote and directed—topping the list. It required considerable detective work from Martin to track down Orgy’s producer, Stephen Apostolof. Contrary to public opinion, Apostolof considered Ed “a great filmmaker and a great man.” Unlike some of Ed’s more interesting bad movies, this one is little more than strippers dressed as ghouls disrobing in a graveyard set. Wood adapted it from his, ahem, novel. In 1994 sales of our Wood titles increased further after the release of the feature film Ed Wood, starring Johnny Depp as Ed and directed by Tim Burton.

Randy Friedman approached Richard about heading up our video division. Randy was in charge of I.R.S. Video, which meant he was the record company’s sole employee dealing with home video. He told us that his bosses, Miles Copeland and Derek Power, had wanted to enlarge I.R.S. Video and spin it off as a public company. The people they were proceeding with turned out to be scam artists. As a result, to avoid any legal problems, they thought the best move was to close I.R.S. Video. Randy came over in early 1985, bringing I.R.S. Video’s The Police Around the World concert program for Rhino to rerelease.

Randy Friedman was a friendly, good-hearted soul who had the misfortune of looking like one of the klutzy characters drawn by Mad magazine cartoonist Don Martin. Chuck Taylor’s description of a typical Martin character could have described Randy: “… big-nosed schmoes with sleepy eyes, puffs of wiry hair …” He had an unbelievable number of contacts and had that salesman’s gift of being undaunted in making cold calls. Capitol only sold to record stores. Randy expanded our distribution to video stores and, on occasion, nontraditional outlets like 7-11. He brought over other I.R.S. product of new wave bands, like The Cutting Edge and New Wave Theater.

Randy was impressed with the videos Martin put together, in part because they cost so little money. He liked the cachet they gave Rhino Video and felt he got more attention because of it. Ultimately, despite his intentions and efforts, he was fired after two years because the division was operating at a loss. Still, Richard thought enough of him to bankroll his next start-up company. With his future at Rhino in doubt, Randy recommended Arny Schorr, who had experience in sales in both records and video, as his replacement. A music fan who displayed framed handbills from 1960s Fillmore concerts in his office, Arny had the sheen of a salesman and was always in motion.

In the midst of all this lowbrow programming were significance releases. Richard agreed to provide seed money for a documentary that explored the causes of the United States’ 1989 invasion of Panama in exchange for the home video rights. The Panama Deception won an Academy Award for best documentary for 1992. The director, Barbara Trent, came by and Richard and I got to hold her Oscar. Sales were minimal. The Mamas and Papas’ Straight Shooters won an American Video Conference Award for Best Documentary. We released a series of Emmy winning TV dramas from TV’s early years, including Requiem for a Heavyweight.

The incipient home video business was a great idea, if of questionable legal status. Videotape of a large format had been used professionally for decades, but an effective, smaller format threaded into a cassette that people could watch on machines at home was a revelation. Tapes were at first sold to consumers on two formats, Betamax and VHS (for Video Home System). In the early days of home video there were gray areas. When Warner Brothers Pictures produced a movie like Casablanca (in 1942), they paid for it, owned it, and took the position that they could do anything they wanted with it. When the Turtles appeared on The Ed Sullivan Show to promote their new single “Happy Together” in hopes of creating sales, they would have signed off on a standard agreement giving the show full rights to their appearance. But the expectation at the time was that the show would air once on the CBS network—and maybe a second time as a rerun if they were lucky.

Ten years later the producer could take the unfair position that their rights were unrestricted, and they could issue the appearance on home video. Or they could take the fair position that they needed to get the rights from the participants, which meant tracking down each member of the band and negotiating with them or offering a flat fee. If it was rejected by even one unreasonable member, the performance could not be used. The group had agreed to perform on the show, but not to have their performance sold—with others—in a product that didn’t yet exist.

We faced many of these issues when we made a deal with ABC to release videos of the mid-1960s TV show Shindig! The show was a must-watch for pop music fans and featured the top acts of the day from the Beatles and Rolling Stones on down. Unlike on most TV shows of the time, the majority of the performances were live. ABC insisted we pay everyone who appeared on camera. For example, we may have only been interested in a performance by the Kinks, but if dancers were in the shot, or members of a backup band, we had to track them down and pay them as well. Initially we felt Shindig! was perfect for us. It was quality programming, had never been out on home video, and it fit with our resurrection of great music from rock’s past. It was more time-consuming and expensive than we anticipated. When the videos hit the stores in 1992, there were far fewer people who treasured the show in the way that we had, and we lost money on the deal.

It was tough going for Arny. It took him a while to understand Richard’s vision. He added more music titles and expanded his staff, but getting quality programming was always a problem. The movie studios released their own movies and TV shows. The record companies released programs by those artists who were signed to their respective labels. Where could he go? We didn’t want to go low-rent as Atlantic Records’ A* Vision had, by inking a deal to release video produced by Penthouse magazine.

In addition, because Video’s profitability was always in question, Arny felt he couldn’t risk paying high advances or production expenses. It was difficult for him to get footing. It depressed him to sit in on department finance meetings and to keep reporting that his area was still in the red. As a consequence, by 1993 Rhino Home Video had diminished from a staff of seven to two: Arny and a designer. Arny was dispirited, but he loved Rhino and was determined to build a viable home video division for the company.

As the home video industry matured, it was better able to accommodate home video releases, but not fully, as was the case with a prospective Monkees compilation. After we made a deal for the Monkees catalogue, a potential big seller would be a greatest hits collection of the group’s music segments from the TV show. To use a clip from a show we would not only have to pay the Monkees, but the director and writers of the episode—even if they had no contribution to the musical segment. Because of the union stipulations, the expense made the project unviable. From our experience, the publishers also were unreasonable. If one were to take a TV show, The Monkees or otherwise, and evaluate the cost of the production, the contribution of the actors, director, and writer, and compared it to the time during which a song was played, there’s no way the publishers could justify their high rates.

I came up with the idea for The Monkees box to look like an old TV set. The fall 1995 release included twenty-one VHS tapes—fifty-eight episodes and the 33 1/3 Revolutions Per Monkee TV special—and an impressive forty-eight-page booklet. The list price was $400, which was the most expensive box set for a video release. We manufactured three thousand, and were surprised that they sold out in ninety days. The subsequent demand was so strong that we decided to do another run. But it took a long time to manufacture because of the custom elements, primarily the box and booklet. A year later, we sold another 1,500, but when we wanted more, we found that Warner—without asking us—had destroyed the inventory on those custom elements. The Monkees box and the individual releases of the TV shows contributed greatly to making Rhino Video profitable.

Our success with The Monkees box got me thinking about a bigger and more profitable TV show release, Batman. Also popular in the mid-1960s, Batman ran for 120 episodes, none of which were ever on home video. Early in the series a script was written for the cast to star in a quickly made TV movie. It wasn’t as good as the episodes, but it was the only product with that cast to have been released on home video.

Graphic novelist Frank Miller revived Batman with a darker tone. His take was so popular that it spawned a series of Batman movies commencing with Batman Returns, directed by Tim Burton in 1992. I had heard that Warner Brothers didn’t want the TV shows out on video because they thought the campy tone would impair their new franchise, forgetting, of course, that there was one campy video in the marketplace. Because 1997’s Batman & Robin had underperformed both critically and at the box office, there was a lull at Warner in plotting a successor. I thought it would be a good time to try to make it happen. Even though Rhino was part of the Warner Music Group, I thought that we were still perceived as being independent—as compared to being a competitor. As an independent company, I thought I could broker a deal between Fox and Warner, and cut each in on the profits. Time Warner owned DC, which published Batman comics. I projected a minimal profit of $3 million. If I cut DC and Fox in for 25 percent each, Rhino would make $1.5 million. It may not have been much for such large companies, but it would have been for us. I called the woman who headed DC and told her what I wanted to do. She put the kibosh on it.

Mike Nesmith invited me to a thirtieth anniversary reunion of those who had been involved in the production of The Monkees TV show in mid-September 1996 at the restaurant DC3 in Santa Monica. Other than the four Monkees, I knew few people and felt like an outsider. Mike introduced me to a table of guests sitting near the entrance. I exchanged a few lines with comedian Gary Shandling, but spent much more time talking to writer/director David Mirkin. The result was a deal he fostered for us to release the early 1990s sitcom Get a Life, starring Chris Elliott. Mirkin cocreated the show, served as its executive producer, primary director, and sometimes writer. The first two volumes did well enough so that we released a second set. As Shandling’s Larry Sanders Show is among my all-time favorite TV shows, I made an offer of $250,000 to executive producer Brad Grey (of Brillstein-Grey Entertainment) for the home video rights. I never received even the courtesy of a reply to my letter, nor a return to my follow-up phone calls.

Another noteworthy project that never materialized was the original edit of the movie This Is Spinal Tap. The film only runs eighty-two minutes, but director Rob Reiner’s original cut was four and a half hours. Because there were so many ardent fans of the film, I thought we could do well with a limited-edition release. Originally produced by Embassy Pictures, the film—and other assets—was sold to a succession of companies, with Paris-based StudioCanal ending up with the rights. With all the changes in ownership, the long edit couldn’t be located. Some scenes—including ones with Billy Crystal—were included as a bonus on later home video releases.

Even though Gerald Levin, head of all of Time Warner, was a proponent of synergy, it didn’t mean that his words alone carried enough weight. When Arny met with two department heads at Warner Home Video who had blocked Rhino’s request to license specific TV shows, their response was, “Why should we license to you when we can put it out ourselves?” Well, they weren’t going to put out what we requested. Major studios, like Warner Brothers, were focused on the big-selling titles of their hit movies. Many of their old movies and TV shows weren’t released because they would sell too few units to be worthwhile. We were experts in this area, and I had old TV shows like Have Gun Will Travel and 77 Sunset Strip on my list. Licensing those dormant titles to us would have resulted in four profit centers: a licensing fee for the program, profit on the manufacturing of the video tape or DVD, profit from distribution, and profit from their ownership of Rhino—all from programs that were sitting on the shelf.

Their next argument was that any new SKU (stock-keeping unit) would compete with one of theirs. Essentially, they would feel competition for the home video release of Lethal Weapon 4 from Have Gun Will Travel. Richard called Warren Lieberfarb, president of Warner Home Video, who hung up on him. I appealed to Bob Daly, but he was of no help.

We received our first gold video award for sales of 25,000 of Rainbow Bridge. I saw a long cut of the film in a screening room at Warner Brothers Studios in the 1970s. The film seemed interminable: a group of spaced-out hippies at a meditation center in Maui, with a short concert appearance by Jimi Hendrix midway through the film. Hendrix and his band played well, but the sound and visuals were substandard throughout the film. Arny was so happy that he had a best-selling title, he wanted to celebrate by giving me (and a few others) award plaques. Even here, I couldn’t resist a (minor) joke. Sometimes when a record company orders plaques to present to artists, the person ordering them is so clueless that they make up presentation plates to a dead person, as PRESENTED TO JOHN LENNON. Rather than have a brass plate with my name, I told Arny to make mine PRESENTED TO JIMI HENDRIX.

Sometimes sales fail to meet expectations, which we experienced with Shindig! Other times you get lucky, as was the case in 1996 when Arny made a deal with Comedy Central to release their programs on home video. Our initial titles didn’t sell well: The Daily Show, Bill Maher’s Politically Incorrect, and Dr. Katz, Professional Therapist were among the cable channel’s higher rated shows. The following year South Park became an unexpected hit. Primarily because of the videos we sold in 1998, Rhino Home Video experienced a surge in profits. It carried over into the next year with twelve South Park videos in the catalogue. We made so much money for Comedy Central, it would have been natural for them to renew the deal. Warner Home Video, seeing the large numbers we posted, elbowed us out. As Comedy Central was co-owned by Time Warner, we had no clout. There was no respect or consideration for Rhino as a company or for what we had accomplished.

Howard Kaylan turned me onto Mystery Science Theater 3000 (aka MST3K), a TV show that aired on Comedy Central. It was based around Joel Robinson, who was trapped in space on the Satellite of Love (from the Lou Reed song) with four robots. As part of an experiment by an evil scientist to find out which bad movie would be most effective at making people crazy—to use as a weapon to take over the world—Joel was forced to watch bad movies. Viewers could see him silhouetted, seated as in a theater at the bottom of the screen with the robots, during which they made humorous comments, elevating otherwise unwatchable movies into novel entertainment. I loved it.

The concept of adding to, or changing the content of existing films was introduced to me in the early 1960s. Jay Ward, the mastermind behind the Rocky and Bullwinkle cartoon show, produced a season of Fractured Flickers in which segments from silent films were rewritten and dialogue dubbed in by actors. Comedian Soupy Sales, similarly, narrated silent film segments as part of his show. Woody Allen advanced the concept in his 1966 film What’s Up, Tiger Lily?, in which he combined the footage from two Japanese spy thrillers and wrote a new story with entirely new dialogue dubbed in English. In the late 1970s the LA Connection made wise cracks to appropriate vintage films while sitting in the front row of a theater to the entertainment of paid ticket holders.

Richard and I dug the concept, and for a couple of years we were looking to follow in the footsteps of Woody Allen with a Mexican film that pitted colorful wrestlers against familiar horror villains. We screened a number of these hard-to-see films, like Santo vs. Las Mujeres Vampiro, but couldn’t find one that had the right balance between action and dialogue. Unable to resist the concept, in 1986 we took one of these movies, 1964’s The Wrestling Women vs. the Aztec Mummy, added rock music, and changed the title to The Rock ’n’ Roll Wrestling Women vs. the Aztec Mummy.

Starting in 1992, I called MST3K creator Joel Hodgson, who also portrayed Robinson, numerous times trying to make a deal for home video. Either he was extremely untogether, so focused on the show that he couldn’t fixate on my offer, or daunted by the unfamiliar business aspect of home video. It took me three years to close the deal with executive producer Jim Mallon. Hodgson had been replaced by head writer Mike Nelson, and the show’s popularity had slipped. Still, titles like The Brain That Wouldn’t Die proved to be steady sellers. Shortly before I left Rhino, I called Mallon to tell him I was leaving. He revealed that they had received nearly $1 million in royalties at that point.

Arny did an exceptional job of picking up good music titles by artists such as Neil Young, Paul Simon, Cheap Trick, and Pat Benatar, as well as the Who’s film Quadrophenia, and worthy TV shows such as The Lone Ranger, The Real McCoys, and Flip (Flip Wilson). His taste was inconsistent, and he released duff titles such as the TV show Pink Lady and Jeff.

Sony Wonder had the rights to the 1970s TV shows The Transformers and G.I. Joe—both originally Hasbro toys—but didn’t want to put them out on video, so Arny made a deal for an advance against royalties of $50,000 each. G.I. Joe sold well, but The Transformers sold much better than anybody anticipated, to the point where it earned a rare platinum award (sales of 50,000) for Rhino. Hollywood took notice; the feature film rights were optioned in 2003. Unlike the low budget of the original TV show, DreamWorks and Paramount spent $150 million making the film that was released four years later. It grossed over $700 million worldwide at the box office. It probably would not have happened had Rhino not primed the franchise.

As a result of the strength of the catalogue, Rhino Video accumulated $10 million in sales in 2001, with a good profit. For the next year Arny projected a healthy increase to $13 million and a profit of $3 million. By the end of 2002, the momentum of the division had raked in a profit of $8 million on sales of $22 million. It was a remarkable achievement, even more so in light of how Arny built the business back up from its lean years. It’s an example of how, no matter how bad things get, you don’t quit—you battle back. Richard and I worked well with Arny and appreciated how he was able to forge a successful division competing with companies with much deeper pockets and with access to better programming. But not everybody shared our opinion.

Arny met with Scott Pascucci, who succeeded Richard and me. Pascucci’s son was into extreme sports, and Pascucci wanted to make a deal with ESPN for their X Games video programming. Arny told him he didn’t think it would fit with Rhino. Ultimately, it wasn’t something Arny had to bother with, because he left the company at the end of the year, unappreciated, having been denied a salary increase, and having been told by new WEA head Jim Caparro that he would have to prove himself in the next year to get a raise.

Let’s look at the numbers again. Arny had exceeded his projections and brought in $8 million in profits. Arny could have asked for an extra hundred thousand or two, and been perfectly reasonable. But he asked for a lot less; he merely wanted to be brought up to par with what the other senior vice presidents at Rhino were paid. Arny’s salary had lagged because of his division’s struggle for profitability. He left at the end of the year, after sixteen years at Rhino Home Video, for a better deal at another company. Pascucci’s X Games deal turned out to be a big money loser. Without Foos, Bronson, and Schorr, Rhino Home Video declined as a business, and ceased to exist by 2005.