Cinedigm, Universal Expand Relationship20 Feb, 2014 By: Erik Gruenwedel
New deal, which takes effect in June, includes Gaiam Vivendi content, in addition to third-party sources
Cinedigm Entertainment Group and Universal Studios Home Entertainment are upping their relationship to include so-called “backroom services.”
Cinedigm, beginning this summer, will subcontract packaged-media shipments and billing to Universal, while retaining oversight of sales, marketing and acquisitions. The agreement does not involve Cinedigm’s digital properties.
The two companies last May entered into a multiyear supply-chain agreement to distribute Cinedigm’s DVD and Blu-ray library of 5,000 independent films, documentaries, TV programs and other content.
Los Angeles-based Cinedigm, which cut its teeth transitioning movie theaters to digital screens, last year purchased Gaiam Vivendi Entertainment, after acquiring home entertainment distributor New Video in 2012. The Gaiam Vivendi deal did not include Gaiam's wellness and fitness (and DVD) business.
“When we merged in Gaiam Vivendi, we evaluated [the original Universal deal] along with other studios who were interested in our collective business and came to the conclusion Universal offered us the best deal,” said Bill Sondheim, president of CEG.
Sondheim said the new agreement is patterned after Lionsgate’s distribution deal with 20th Century Fox Home Entertainment, whereby Cinedigm maintains all direct sales relationships with major retailers, marketing and advertising. Universal affords Cinedigm greater efficiencies in picking, packing, shipping and billing.
He said the deal would not impact current employment at Cinedigm.
“Since we understood the resources we had at Cinedigm, and we understood the capabilities we needed to bring over from Gaiam, there’s been very little need for [staff] turnover,” Sondheim said.
Cinedigm is the second-largest packaged-media distributor of non-theatrical content after Warner Home Video. Universal is the fifth largest, according to Nielsen VideoScan.