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Cinedigm CEO: Entertainment Retail Sales Have Rebounded

13 Nov, 2014 By: Erik Gruenwedel

Despite ongoing digital evolution in home entertainment, retail sales of independent movies have steadied, Cinedigm CEO Chris McGurk said on the distributor’s Nov. 13 fiscal call.

McGurk said previous disc fulfillment issues with Universal Pictures Home Entertainment have been resolved. He said Cinedigm had installed operational tracking improvements as disc returns have returned to “normalized” levels, and retail sellthrough of entertainment media has rebounded.

At the same time, McGurk said the company has succeeded in transitioning to higher-margin film output deals, while eliminating lower-margin brands (i.e. WWE) inherited when it bought Gaiam Vivendi Entertainment.

“Our very successful DVD release in August of God’s Not Dead, which shipped over 1 million units at an extremely high consumer sellthrough rate is perfect example of this,” McGurk said.

The CEO said the premium faith-based DVD underscores Cinedigm’s foray into narrowcast branded over-the-top video platforms, which he characterized as a game-changer in home entertainment. Indeed, Parks Associates said that while 14% of homes had a streaming media device at the end of 2013, that number is projected to double in 2014 and top 330 million devices by 2017.

“We believe OTT will be the industry’s key growth driver in the future,” McGurk said.

Cinedigm plans to focus on OTT and subscription streaming services without competing against broadly-focused general entertainment SVOD channels.

“Our intent on building a narrowcast version of Hulu or Netflix or Amazon Prime Instant Video is by delivering specific content to avid well-defined audiences on the device or platform of their choice, McGurk said.

Cinedigm’s first OTT venture — Docurama — launched in May and now has 227,000 apps installed via Roku, iOS, Xbox, Amazon Fire, Western Digital, TiVo, Opera and Samsung.

“We are adding approximately 7,500 app installs each and every week,” McGurk said.

Cinedigm's OTT digital network, CONtv, in partnership with comic book convention organizer Wizard World, is on schedule to launch in early 2015 with more than 1,500 hours of premium content, original series and convention footage.

McGurk said CONtv original programming includes “Fight Of The Living Dead,” a reality drama that takes YouTube actors and drops them into the middle of a zombie apocalypse in an abandoned women’s prison. Other concepts include game shows produced live at the confabs.

The Dove Channel is set to launch in spring 2015 via a partnership with The Dove Foundation and will be targeted to families seeking wholesome, family-friendly and faith-based content.

Meanwhile, Cinedigm upped a second-quarter (ended Sept. 30) net loss 40% ($2.1 million) to $7.3 million on revenue of $23.7 million, which was up 23% from revenue of $19.2 million during the prior-year period.

Finally, Cinedigm Entertainment Group increased revenue $5.3 million, or 142%, year-over-year, due to the inclusion of new business from the acquisition of Gaiam Vivendi Entertainment, which was not part of last year’s operating results, and growth from the addition of physical and digital distribution rights of home entertainment titles.

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