Uneven Growth for Film Studio With a Message

In Hollywood, doing both turns out to be more complicated than you might think.

Participant Media, the film industry’s most visible attempt at social entrepreneurship, turned seven this year without quite sorting out whether a company that trades in movies with a message can earn its way in a business that has been tough even for those who peddle 3-D pandas and such.

“The Beaver,” Participant’s latest picture, is a flop. A mental health-themed drama with Mel Gibson in the lead, it has taken in less than $1 million at the domestic box office since opening early last month, though it cost about $20 million to make, and was backed by a vigorous effort to build a following among those who treat depression.

Despite accolades — Participant took 11 Oscar nominations in 2006, and films like “The Cove” and “An Inconvenient Truth” later became winners — nothing from the company has approached blockbuster status. The biggest ticket-seller among its films — it has produced about 30 — was “Charlie Wilson’s War” in 2007. A star-packed tale about the unintended consequences of America’s past dealings with Afghanistan, it took in just $66.7 million in domestic theaters.

And Participant’s owner, the eBay co-founder Jeffrey S. Skoll, is still pouring in money. In an interview, Mr. Skoll put the amount he has invested at “hundreds of millions to date, with much more to follow.”

Yet Mr. Skoll last week described his growing enterprise — which also publishes books, produces television programs, has a wide Internet presence through its TakePart social action network, and owns a major stake in Summit Entertainment — as only the beginning of a media empire that he and his partners expect to surpass eBay in terms of impact, if not profit.

“This is the very early stage, as far as I’m concerned,” said Mr. Skoll, who joined Participant’s chief executive, James G. Berk, in a broad discussion of their experience in an industry in which many players share their commitment to social causes, but only rarely have tried to build a business around their views.

Ted Leonsis, with his indie-minded SnagFilms, and Philip Anschutz, with his family-oriented Walden Media, have both made forays into film-related social entrepreneurship. But neither has matched Mr. Skoll’s attempt to penetrate the studio system by financing and producing a broad range of pictures that are intended to set off not just ticket sales, but social and political action campaigns.

In the past, those have aimed to pressure senators into ratifying the New Start arms control treaty (via “Countdown to Zero”) or to press for reauthorization of the Violence Against Women Act (with “North Country”).

Mr. Skoll and Mr. Berk spoke in a conference room on the third floor of their new quarters in Beverly Hills. The offices, Mr. Berk said, are made entirely of recycled material — the carpet comes from old tires, but the look is stylish and green. From the second floor, Mr. Skoll operates philanthropies to which he has donated, by his count, about $1.5 billion.

Eventually, Mr. Skoll said, Participant is expected to become self-sustaining, though both expansion and the soft performance of some films have kept it from making a profit to date.

In strictly financial terms, said Mr. Berk — who was previously the chief executive of Gryphon Colleges, Fairfield Communities, and Hard Rock Cafe International — Participant’s film business appears to perform “just above the median” for similar size companies, thanks to a slight edge in home entertainment sales. Those are helped by long, intensive campaigns that urge like-minded activists to rally for years around message films like “An Inconvenient Truth,” the global warming documentary.

In measuring its success, Mr. Berk added, Participant sometimes resorts to an unusual standard: On losers, the company assesses whether Mr. Skoll could have exerted more impact simply by spending his money philanthropically.

By that measure, “Waiting for Superman,” about the failures of public education, was a hit, Mr. Berk said. It had just over $6 million in worldwide ticket sales, but managed to put the issue of teacher competence into what he calls “the pool of worries” for millions who were caught up in a fierce discussion of the film’s premise, that failing children are hindered by union-protected teachers.

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