Most people in America know of Mark Cuban as the owner and face of the 2010-11 NBA Champion Dallas Mavericks, as well as one of the entrepreneurial stars of the smash TV show “Shark Tank.” In the business world, Mark is known in a different way: as the highly successful pioneer of HDTV (through HD Net, now AXS TV), and most recently, as one of the principals of Magnolia Pictures. Magnolia is the first studio to deploy truly 21st century technology, from the way it produces films to the way it advertises and distributes them.
Mark is one of the most successful entrepreneurs America has ever seen, with an irrepressible combination of insight, vision, energy and business savvy. We had the rare opportunity to catch up with Mark for Innovation and Tech Today Magazine. This is an excerpt from the interview that appeared in our premiere issue in November, 2013.
Innovation & Tech Today: First of all, Mark, you live an entrepreneur’s dream. How did your entrepreneurial instincts sharpen during the journey to create what you oversee today?
Mark Cuban: I was able to see a lot of repeatable patterns that occur from business to business which allows me to move faster than most. I also make it a point to always ask myself to reevaluate my businesses so that, if I were to start from scratch, what would I change? Then I try and change it.
I&T Today: Magnolia Pictures seems to be a 21st century version of the vertical integration found in the Hollywood studios in the 1930s through 1950s: a production company, distribution arm, the Landmark Theaters and cable rolled into one chain. What did you see in the movie world that created an opening to develop this business model and run with it?
Mark Cuban: We realized that because we are vertically integrated, with AXS TV, Landmark Theaters, Magnolia Pictures and 2929 Films, not only could we make, distribute, show and sell movies, but we didn’t have to play by all the old Hollywood rules. I decided to look at the technology opportunities that would allow us to change how the game was played that others may not be aware of. Back then, everyone saw the Internet as the big opportunity for movies and distribution. Many still do. I have a rule: if everyone is looking in one area/platform for solutions, that probably is not where the new opportunities are. In this case, everyone was ignoring the fact that cable and satellite had already gone digital. From a tech perspective, everything that YouTube and other online video sites could do, cable in particular could do as well. Knowing that cable TV providers would leverage new digital technology, we made a big push to understand how we could leverage their VOD (Video on Demand) platform to sell movies.
I&T Today: What happened from there?
Mark Cuban: We knew that we had to have an angle that made financial sense for the TV provider. So I created a program from Magnolia and AXS TV called Ultra VOD. Ultra VOD made Magnolia movies available for sale via VOD 30 days before they premiered in theaters. The benefits to all the parties involved were immediate and significant. We no longer had to spend a lot of money to make people aware of our movies. The movies could become an impulse buy for consumers. All the financial partners, producers of the film, the TV provider and Magnolia came out way ahead. We changed the game and now we are starting to see Lions Gate and others starting to try to copy us, and consumers are pushing hard to see windows for films collapsed to the Magnolia/AXS TV model.
I&T Today: A great feature of Magnolia Picture is the variety of films you produce — adventures, tight thrillers, smart character and ensemble pieces, and truly innovative documentaries. We’re curious as to what you saw in the documentary market’s potential to choose this route, since most other studios tend to shy away from docs?
Mark Cuban: It’s tough to get people to leave their houses to go to a theater to see a movie. It has to be very timely and topical to a great number of people for docs to work theatrically. Because we make our docs so easy to buy, via VOD, we can reach a far greater audience than other distributors can.
I&T Today: What prompted you to climb aboard Shark Tank? What is the biggest takeaway message you try to give contestants — whether or not you invest in their businesses?
Mark Cuban: I loved the idea of making the business decision making process public. Most people feel that they aren’t in a position to start or run a business, because they don’t have connections or are missing something else. Shark Tank allows people to see that anyone can start and run a successful business. I wanted to be part of that. The biggest takeaway I try to create is that, although a shark may not invest in their business, hard work and smarts are always more important than money. If the entrepreneur keeps on working hard, anything is possible.
I&T Today: When discussions on innovation ensue, it seems everyone can speak the language, but not so many move forward with innovative ideas. How does one focus themselves to innovate in such an apparently crowded marketplace?
Mark Cuban: By doing your homework and being honest with yourself. You have to know more about your industry than anyone else in the world. If you don’t, someone else out there is in better position to win your customers than you are. It comes down to effort. It’s surprising, but most people think they work hard and smart enough, but they don’t. They get outworked.
I think part and parcel of that problem is that entrepreneurs often lie to themselves. They want to believe their product or service is the best, but they don’t put in the effort to truly find out. They want to believe that their competition is not outworking them, but they don’t know. You have to be brutally honest with yourself in order to get to the top.
MARK CUBAN The co-star of Shark Tank, Dallas Mavericks owner and HDTV pioneer.
— CW and RY