A new paradigm: Cinedigm steps up acquisitions for a variety of platforms


As the digital conversion in theatres nears completion, what’s Cinedigm Digital Cinema Corp., the country’s number-one pioneering digital integrator, to do? In a few words—plenty and then some. And content has everything to do with it.

Continuing as a powerhouse in cinema software and services with its Digital Cinema and Software units, the company’s third unit—Cinedigm Entertainment Group (CEG)—is going full-throttle in the acquisitions and distribution business, delivering content in theatres, across digital and on-demand platforms and on DVD/Blu-ray.

Theatres are key, but as company chairman and CEO Chris McGurk explained to the financial community a few months ago, Cinedigm is also about playing well on mobile, cable and satellite and “being digitally compliant with all screens, big and small, on the major digital distribution platforms—from key exhibitors to digital retailers like iTunes, Netflix and Amazon.”

Theatres remain the hallowed platform, but in our brave new digital world of multiple outlets and massive choice on large and small screens, theatres no longer have everything to do with the new acquisitions game. Serving theatres with exclusives or day-and-date video-on-demand and then rolling out to the usual suspects in the ancillary markets, CEG is going pedal to the metal everywhere with content holdings for a variety of outlets.

These holdings are vast and growing, thanks to Cinedigm’s library of films and programs, including more than 12,000 movies and shows for digital distribution. About 900 of these are documentaries—many award-winning—brought into the fold as a result of Cinedigm’s purchase last April of New Video, arguably the country’s foremost doc distributor.

Beyond its formidable size, the library’s growth, says McGurk, is also creating new opportunities for potential financing and creative and talent partnerships. The distribution options for so much content are many; on just one ancillary front, the company distributes more than 1,700 feature films to iTunes worldwide. But amidst all this, theatres still rule. As McGurk notes, “Exhibition has long thrilled and the tribal experience it affords is as alive as ever.”

Indicative of Cinedigm’s focus on theatre-quality acquisitions, whether narrative fiction with marquee names or issue-charged, awards-ready docs, the CEG unit is readying a number of films for theatres and the digital thereafter. Violet & Daisy is their young-adult action/sci-fi entry with built-in appeal to the 18 to 34-year-old demographic and younger art-house crowd. Suggesting a younger, hipper, maybe even darker Thelma & Louise, the film stars Saoirse Ronan (Hanna) and Alexis Bledel (“Gilmore Girls”) as two young, pop culture-obsessed assassins (Ronan in yet another assassin role!) in New York City who accept what they think will be a quick and easy job until an unexpected target, played by James Gandolfini, brings unplanned difficulties. The film from longtime indie producer GreeneStreet Films also boasts Oscar-winning screenwriter Geoffrey Fletcher, who won for specialized hit Precious. He is writer and debuting director here and therefore someone to watch.

As Violet & Daisy is going out to theatres day-and-date as VOD, McGurk explains the rationale for hitting both platforms simultaneously. “Theatre owners want more content, so we’re saying, ‘Here’s a picture that wouldn’t be released if not for the day-and-date patterns, as this isn’t a Dark Knight kind of picture. This is a film that would go directly to VOD and theatres would get no money from it. And theatres should understand that the cable marketing for these kinds of VOD offerings makes consumers aware of their availability in theatres and this actually drives traffic to theatres because it signals to viewers that, for the money spent to see this at home, they can get these films on the big screen.”

Another major CEG acquisition is Arthur Newman, a U.S./U.K. production starring Academy Award winner Colin Firth and Golden Globe winner Emily Blunt. It will be released exclusively in theatres in mid-2013 before hitting the subsequent windows. Written by Oscar-nominated writer Becky Johnston (The Prince of Tides, etc.), the story follows the midlife crisis of Wallace Avery (Firth), who abandons job and family to live his dream. He stages his own death, assumes a new identity as Arthur Newman and embarks on a crazy life of petty crime, subterfuge and multiple identities after meeting a kindred soul (Blunt).
McGurk, who held executive positions at MGM, Universal, Disney and Overture prior to Cinedigm, describes this “movie-star movie” from debuting director Dante Ariola as “a dark comedy, a romance and funny.” He likens it to the critically acclaimed Sunshine Cleaning because of its “additional real elements of drama and emotion.”

CEG VP of theatrical acquisitions Vincent Scordino, who joined Cinedigm from Millennium, describes Arthur Newman as “a deeply entertaining film...perfect for today's audiences” and with the great assets of stars Firth and Blunt and “a powerful story of displacement, longing and, ultimately, redemption. Moviegoers will leave the theatre moved and uplifted.”

Cinedigm also recently acquired all U.S. distribution rights to the doc Call Me Kuchu, about the daily lives of David Kato—the first openly gay Ugandan man—and three fellow “kuchus” (LGBT Ugandans) and a brutal and senseless murder that sent shock waves throughout the world. Cinedigm has planned an early 2013 theatrical release for the film, followed by on-demand, premium digital, DVD, and TV releases.

Already hailed on the festival circuit, the doc from filmmakers Fairfax Wright and Zouhali-Worall has won a number of prestigious prizes including a Berlin Fest Teddy Award and Best International Feature at Hot Docs 2012.

CEG currently has the John Slattery (“Mad Men”) starrer In Our Nature in theatres and on VOD and will also be releasing this March Don’t Stop Believin’: Everyman’s Journey. A festival standout eliciting much positive buzz, the doc follows the real life rock ’n’ roll journey of Filipino Arnel Pineda, who was plucked from obscurity and a difficult life via YouTube to become the front man for iconic American rock band Journey.

Regarding CEG’s embrace of docs and the strategic purchase of New Video, McGurk, who was instrumental in bringing docs like Bowling for Columbine and Capitalism: A Love Story to theatres and worldwide attention, declares, “I love operating in the social-issue space.”
Jumping genres and scheduled for theatrical release in early spring is CEG’s Toronto acquisition Come Out and Play, a horror story set on an initially beautiful but soon-emerging mysterious island where a couple awaiting their first child get anything but the quiet vacation they were expecting.

Asked how the world of shifting demographics and abundant content impacts CEG’s evaluations of potential acquisitions for so many audiences and platforms, Scordino responds that “with so many different outlets for different properties, the review process is entirely different for each. There’s traditional theatrical, day-and-date VOD, Ultra VOD, etc. On the one hand, [so much diversity] allows us to take a more expansive view of the market. If you have a quality film and we’ve identified a platform that can support a meaningful release, then we’re interested in working with you. On the other hand, [the diversity] forces us to be even more specific about the audiences we’re targeting and to be more creative in our marketing. You have to be able to break through the noise.”

Scordino goes on to emphasize that “it’s the marketable elements for each film that we look at, and the targeting of audiences, so with regard to theatres, we can select those that are appropriate for each film. For instance, we know that with Everyman’s Journey, we’re booking theatres that are strong in the Filipino world.”

So many viewing options don’t just bless the content-loving consumers. Scordino notes, “There are considerable benefits to so many options. They drive everything and help ensure we’re set up to succeed on each film. Our model isn’t about having one success that supports many failures. That strategy never benefits filmmakers in the long run. We’re able to offer maximum flexibility as it relates to windowing and total access across platforms. Filmmakers and the market in general have responded very positively to that.”

Others spearheading Cinedigm Entertainment Group’s acquisitions push, along with McGurk and Scordino, are Susan Margolin and Steve Savage, co-presidents; Kristin Harris, director of theatrical acquisitions; and Emily Rothschild, director of acquisitions.

McGurk describes the overall acquisition strategy as “finding quality pictures and knowing exactly who the audience is. We had The Invisible War, a documentary about assault in the military that went out in early summer and then we had it available through iTunes and it’s now moving through the ancillaries.” A multiple nominee and award winner, the investigative feature deals with the epidemic of rape of soldiers within the U.S. military.

Regarding the tricky issue of dealing with theatres when going day-and-date VOD with a film, McGurk says, “If we go VOD, even premium VOD, we want to make sure we get good theatre placement, so we’ll give theatres a cut of the VOD. And majors aren’t doing that. And for the content providers, we don’t burden them with studio-like accounting but offer a fair deal. For instance, we take a fee for distributing, recoup the marketing and give the content providers all of the upside. Others complicate things with overhead charges, but ours is a clean deal.”

Also in the realm of theatrical distribution, Cinedigm continues strong with its unique digital Indie Direct initiative, launched about two years ago. McGurk reports, “We had our largest release this past August with the action comedy Nitro Circus: The Movie, which went to 800 screens.” The Indie Direct formula leverages the wealth of digital content with so many screens needing content. For the filmmakers, the program mimics a full-service studio by giving them a menu of services and pricing for getting their films on theatre screens, a kind of turnkey, “one-stop shop” solution for a big-screen run. While not disclosing dollar figures, McGurk allows that “we offer better terms to independent filmmakers than larger distributors get.”

Cinedigm also continues in the business of alternative programming, but the strategy has been tweaked. In early 2009, the company impressed with its eye-popping experiment that delivered the first live football game in 3D to theatre audiences. McGurk comments, “We continue with these live and recorded events, but the strategy now is to go from one-off to recurring programs in action sports, education, documentaries, etc. 3D is definitely part of our strategy, but we do want those recurring programs that win audience loyalty. To do this and recognizing that we’re dealing with a variety of demographics—for instance, documentary and sports fans aren’t necessarily the same—we are working on partnering with theatres.”

About CEG’s embrace of docs and the strategic purchase of New Video, McGurk says he was struck by New Video’s cross-platform capabilities, its digital strengths in bringing docs into homes through digital platforms and services like Vudu, Netflix and Amazon. And New Video, he also notes, isn’t just adding product to Cinedigm’s roster and library but “is creating new opportunities for potential financing and creative and talent partnerships.”
As for its traditional cinema releases, Cinedigm does splits with theatres similar to those they do with other indie studios, according to McGurk. And CEG anticipates releasing 20 to 25 films a year to theatres.

As the acquisitions salvo gathers steam, all’s not yet entirely quiet on the conversion front. Cinedigm’s agreement with the studios for conversions ends on Dec. 31. (Cinedigm also worked with NATO’s Cinema Buying Group of about 3,000 independent screens for conversion and expects to convert about 200 to 400 drive-ins by April.)

But content now rules. As McGurk recently told the investment community, “We are now the largest end-to-end distributor of independent digital content across theatrical and all ancillary platforms and have rapidly become a strong player in the multi-billion-dollar independent film and alternative-content distribution business.”

From its offices in L.A. and New York’s Flatiron District, Cinedigm is also revving up activities on expansions abroad and partnerships. Says McGurk, “Overseas is what we’ll be doing more of, such as VPF management and software and film distribution overseas. We’re already looking for opportunities in these territories so we can partner to buy rights. Already in Asia we’re having several conversations for our software and content distribution businesses.” Cinedigm is already in a few territories like the U.K. and India with its software and VPF businesses.

Having learned the value of partnerships by way of its work with Digital Cinema Initiatives, Cinedigm continues on this front as CEG reaches a global digital audience through ventures with iTunes, Netflix, Amazon, Google, Hulu, Vudu, Xbox, PlayStation, and others. And with the growing importance of film festivals, Cinedigm already has deals with Tribeca Film and the Sundance Institute which involves handling some of their content in the ancillary markets. McGurk states, “We want to extend these [deals] and explore more opportunities for maybe in-theatre brands for what they offer.”

In the small-screen arena, the company recently announced partnerships with Alloy Digital to distribute content from their popular YouTube channels—Smosh and Clevver Media—on transactional digital platforms beyond YouTube where the programs now debut and are currently top performers. Even theatres may get a piece of this action. Says McGurk, “For the longer term with regard to creating alternative-content channels, there’s potential for a big-screen digital theatrical component targeting Alloy’s ‘narrowcast’ demographic of millennials [the Gen-Y crowd of adults under 30 or so].”

Cinedigm is also eyeing financial partners to get in earlier on content. “Right now we’re just acquiring finished products but are looking for producer partnerships and are in active discussions,” McGurk reveals.

While Cinedigm’s work as digital integrator for theatres has matured, McGurk doesn’t label that as a “legacy” business. “It’s also our foundation business as the converted spaces allow us to build our content and software businesses and continue to provide our other services.”

Nor does McGurk perceive a “too-much-content” dilemma. “That’s not my assessment because, for instance, you can’t compare something that’s right for You Tube with content that isn’t. And 3D still has not meaningfully made its way into homes yet. What is happening is that theatre exhibitors haven’t done such a good job of promoting why their experience is so special or why watching Avatar [on the big screen] was so great and you couldn’t get that experience anywhere else. And there’s not enough of that kind of content created so that theatres can promote that unique tribal experience.”

Asked whether being nimble is key to the company’s strategy, McGurk loses no time replying, “That is nailing it on the head. We call it nimble and flexible. While others try to find content to fit their model, we see every film as having a different strategy, so we’ll find a model [of distribution] for it.” And, as McGurk recently told Wall Street, the company’s strategy for distribution is a “digital-focused releasing model.”

Sounds like the right time for such thinking. CNBC early in December, offering only four projections for media/entertainment in 2013, predicted that there will be “distribution wars: content anywhere, anytime, with any model” and that more unlimited movie streaming options would be central to this. (Ironically, the web article’s only visual was so yesterday—a graphic featuring a strip of 35mm film with a 10,000-foot metal film reel in the background.)
As Cinedigm fashions specific distribution models for the content it offers for both big and small screens, theatres have even more pressure to sustain their reign as the most gorgeous, glamorous, desirable “model” out there. As McGurk declares, “No matter the growing importance of the small screens and so much choice these days, my feeling continues to be that there will always be a place for theatres, as long as the right product gets on their screens.”