David Paul Cohen is a budding show-business big shot, though he has no intention of producing a blockbuster movie or hit sitcom. Instead of making programs, Cohen obliterates them. His company, Edgewise Media Services in Anaheim, Calif., deals in used videotape, buying used cassettes from TV and movie studios, erasing them, and reselling them to production houses and networks. Glamorous it's not. But Cohen, a 29-year-old California native who once dabbled in video production, isn't complaining. "We can make a lot more money selling tape than shooting it ourselves," he says.
After working for a similar tape recycler, Cohen decided to set out on his own. In 1994, with $10,000 in savings and a $5,000 loan from his sister, he opened Edgewise and began asking production houses to turn over their vaults of used videotapes. He was doing them a big favor. Nobody wants outtakes to fall into the wrong hands. "The content needs to be destroyed," says Richard Schiller of AEI Inflight, an Orange (Calif.) video producer and distributor. But doing it in-house tends to be both expensive and time-consuming. Edgewise now recycles up to 10,000 cassettes a day and had 1999 sales of $6.9 million.
Edgewise runs the cassettes through a tape evaluation and cleaning machine that checks for flaws and erases the tape. Then the tape goes through a "degausser" for another round of erasing, just to be safe. Edgewise employees clean the cassettes and repackage them in boxes almost indistinguishable from the originals. The difference? Price. Popular Betacam SP cassettes, for example, cost $13.90 new; Cohen sells them used for $7. Still, competition is fierce. In a quest for market share, Cohen recently acquired one competitor and bought the New York and Chicago offices of another rival. Revenues, he says, could hit $12 million this year. Anyone care to redefine "blockbuster"?