Moving the image forward: MiT marks another milestone with digital projector deal
“I firmly believe that if you don’t love this silly little business of ours, you are at a disadvantage,” says Joe Delgado, co-founder and executive VP, sales and marketing, of Fountain Valley, Calif.-based Moving iMage Technologies (MiT). “You and your readers know as well as I do that there are a lot of passionate guys and gals in our cracked little world, right? That’s why there are so many good people that just don’t want to leave the cinema business.” Whether as a person or a company, “if you have a skill set, yes, that’s great,” Delgado has observed. “But if you don’t have that passion, you are going to be at a disadvantage against those that do.”
While MiT has delivered on that passion along with engineering expertise and business savvy, Delgado feels that when it came to digital cinema, the company was somewhat at a disadvantage in that MiT needed to have full access to a digital projector as well. With the Sept. 27 announcement that NEC Display Solutions of America, Inc. had selected MiT as a master reseller of its full line of DCI-compliant DLP Cinema projectors, that all ended. “The only way to take that next big step for our company was to have a digital-cinema projector. That has now happened,” he confirms. “Really, the projector is the tip of the spear, as it were.”
MiT will also distribute NEC’s full complement of cinema servers, lobby display and software solutions. In addition to factory-direct product sales and distribution, the agreement calls for MiT to inventory d-cinema projectors and parts in its Fountain Valley facility. The headquarters will also handle product support and critical field response.
Delgado proudly calls this latest accomplishment the culmination of MiT’s tremendous growth over the past eight years. “The company was founded on a napkin,” he recalls, confirming what this author heard about how Moving iMage Technologies came into being. “The idea came to me outside a Chili’s somewhere in Orange County. I was having a cigarette break,” he notes, making a compelling case for California’s pioneering role in banning the habit from public places. Had he been able to stay inside, Delgado wouldn’t have had the opportunity to think, he agrees with a laugh. “Back in early 2002, I was speaking to some of my future business partners about this and their commitment, getting certain skill sets in place and raising the necessary money.” Current company president and chief executive officer Glenn Sherman, for instance, “was always going to be part of the management front, given his expertise in start-ups, taking companies public and all that. And our chairman Phil Rafnson became our major investor.”
On Sept. 10, 2003, the original partners—Bevan Wright, today’s executive VP of operations, and David Richards, VP of engineering, along with Sherman and Delgado—“hung out our shingle in a two-room rental office in Huntington Beach.” From the start, “the intent at MiT has been to always bring in the best possible talent, coupled with a love for the industry,” Delgado says. “That was essentially our mission statement: Get a bunch of talented people that are passionate about providing the best products and the best services from an image technology standpoint.” Next in line, engineering began work on designing the product line. “Back then, we were still very much convinced that film wasn’t going anywhere any time soon. Therefore, we had a three-legged stool approach.”
First of all, “we were going to completely redo the film projection systems by re-engineering the best of the best 35mm technology,” he elaborates. Culling from a century of expertise, Delgado notes MiT really had the best product. “We manufactured and sold platters, consoles and automation systems. Given our size and scope, we were very successful at addressing the middle to small circuits.”
Philosophically, MiT “was then, and still is today, absolutely customer-driven. Some of the bigger companies were making their product based on what they felt was the best approach. All of our developments came from dealing with the customers directly. In fact, every single product that we manufacture—and this holds true to this day—has always received substantial input from the MiT customer base. Be that from the technology or from the business side, we’ve always tried to address our customers’ needs. Whether we have succeeded or not,” he deadpans, “is for others to decide.”
As the second leg of the technology stool, MiT “had smaller digital projectors for onscreen advertising” and developed related iNet software. “And, of course, we were going to go forward with digital cinema,” Delgado says about what “was going to be a huge part of our future. Back in 2003, however, d-cinema was barely in its beta stages. There was not a whole lot going on. While we knew digital cinema was going to take off,” MiT did not have that d-cinema projector. “As the company needed to find its niche in the field, we ended up looking at all the peripherals,” he continues. “We asked what do you need to have a smooth installation, especially as these larger rollouts loomed? On-site work was very labor intensive… In the beginning, per-screen install costs were astronomical. Obviously, the more of that field work you could take out and put into a factory environment instead, making it as plug-and-play as possible, the better. We were taking some of that cap-ex and monetary sting out of the rollout process. So, technology integration and customization became MiT’s big niche, as we went about designing and fabricating equipment, systems and processes to make that install better.”
In general, he finds, MiT was “creative in doing a lot of great things because we took advantage of the times. We sold a tremendous amount of 3D systems, but if you don’t have a digital projector, you are relegated to…more of a service company. There is nothing wrong with that. After all, that’s what we were for many, many years. With the NEC projectors in-house, we can really take that next step and, knock on whatever-my-desk-is-made-of, I think we have all achieved that now.”
Considering himself and the MiT team “very fortunate,” Delgado also admits to having made some bad decisions. “But on the other side of the ledger are more good decisions,” he believes. “When we made the bad ones, we were able to flip them, you know. Take our loss and say, ‘Okay, let’s keep on going.’ Adaptability has always been a hallmark of this company. We were the last company into the film market with technology and engineering and we were the first one out. When we saw that there was going to be a real rollout, we completely shut down our manufacturing of 35mm systems and transitioned into selling used ones, including to the biggest of the biggest… We did great with that.”
That all-around practical approach brought MiT into the bidding process for the DCIP group of exhibitors (Digital Cinema Implementation Partners). “It was a long gestation period,” Delgado agrees, “but we were very fortunate to be one of the few companies that were actually selected to even bid. In the beginning it was a very large pool,” he recalls, “which was culled down to a handful of final RFPs. Ultimately, MiT ended up winning the integration bid for Cinemark and DCIP. That was big for us and put us in the majors. We were kicking around Triple-A ball for a long time, but when were awarded the DCIP job, that got us up into the Moneyball league.”
With NEC on board, things can get even bigger. “As we became closer business partners with them” a little over two years ago, “a certain confidence level developed when NEC looked at our engineering and business skill sets. They began thinking maybe it was a good idea to at least talk about putting on an additional master reseller.” Those discussions started in earnest in June and—after many ideas and reports exchanged, and due diligence done—the contract was signed officially during the second week of September. “MiT will become the official NEC factory-direct distributor and reseller for the USA and Canada, Mexico, Central and South America and the Caribbean.” By comparison, the business models that Christie and Barco deploy are vertically integrated. “Whereas they manufacture, distribute, sell and market, NEC’s policy is to manufacture only, and give distribution, sales and marketing to a second party. That was one of the reasons we became so close with NEC.” By investing into production rather than overhead, “they [NEC] were able to manufacture at the right levels and at the right time,” Delgado notes, touching on timely issues of backlog and inventory.
Since MiT is a factory-direct distributor, “we will be selling the current NEC product line to dealers and service companies as well so that they can continue to supply their customers.” Delgado says, “We are big proponents of the dealer and service network, and want to continue to support that infrastructure. We feel very strongly that there are many existing relationships between dealers and service providers and their cinema customers. MiT does not want to get in the way of those relationships, but we want to support them.”
Going forward, MiT “will actively and aggressively go after supporting the remaining independents,” Delgado assures. “The CBG [Cinema Buying Group] is our focus along with every other small and medium-sized exhibitor. MiT will have a comprehensive plan that includes every facet of the rollout, from financing and virtual print fees, to the projector and complete integration package. We want to make it as streamlined as possible. Because the situation is still so fragmented at the moment, we understand that this is going to require more effort. If exhibitors take a meeting with us, we will talk about everything: financing, VPFs, the projector, servers and the integration that puts it all together, networking into the business side of the process. The idea is to make it 100% comprehensive. There shouldn’t be a reason for our clients to go anywhere else.”
Not even for the all-important financing. “MiT was the first to bring in All Media Capital as a source for funding,” Delgado says about the specialty financing group. “Since then, they’ve done some significant deals.” Jeff Thomas and Ryan Wilson, company president and national sales VP, respectively “are still our guys,” he says. “All Media Capital has been very responsive to the needs of the smaller exhibitor… Acting as a broker and representing several banks, they were able to get many of them financing, particularly for 3D. They are very well-versed on the industry at large.”
MiT is also working on making sure that virtual-print-fee options continue to be part of the full package. “We went down the road of creating our own VPF entity, for a about a year,” he says about the process that resulted in “push-back from the studios” about the lack of a projector and the number of players already involved. The latest talks began in July, and Delgado is optimistic about striking an important partnership on that front soon. That new partner and MiT “have the common goal of making sure that the CBG is all covered. Because their membership is so diverse, the more resources we have, the better off everybody will be. When we take meetings with your readers,” Delgado reiterates in closing, “we’ll be talking about a comprehensive package and turnkey solution”—although he does find that latter key phrase to be somewhat overused. “With digital cinema, it’s really about how close you can get to plug-and-play, because that saves you a tremendous amount of money on the installation and on down times.”
Saving money and shortening down time, that’s moving the picture forward.