Online independent film distributor CinemaNow.com has inked a seven-figure deal with Microsoft and series A investors Blockbuster and Kipco.
Investment is the first Microsoft has made in the Netco.
The second round of financing will fund the company for the next three years while it continues to focus on its primary objectives of building its distribution platform and gathering content, CinemaNow chairman Mark Amin told Daily Variety.
“At the end of the day, these two elements will be how we differentiate ourselves,” Amin said. “From the encoding to the storing to the streaming, we want to be the best distribution system for independent film. And the only way to have a respectable profit margin is to have your own content.”
Benefits to Microsoft and Blockbuster
Both Microsoft and Blockbuster will benefit from partnering with a company that understands “successful revenue models and consumer behavior” of streaming films online, Amin said. “This business is a huge learning process.”
CinemaNow controls exclusive Internet distribution rights to more than 800 films from the Lions Gate, Trimark Pictures, Avalanche, Allied Artists, Tai Seng and Salvation film libraries. Site streams 200 feature films and uses Microsoft’s Windows Player and digital rights management.
“Rather than trying to compete for eyeballs like everyone else, we’ve concentrated on building a platform for connecting all the various hardware and software pieces it takes to stream a movie and collect the fee,” CinemaNow CEO Curt Marvis said. “I think our investors and partners saw that we were ahead of the competition.”
CinemaNow is majority owned by Lions Gate Entertainment through its recent acquisition of Trimark Pictures. The company officially launched its Web site last December and recently debuted its pay-per-view service. CinemaNow plans to bow a subscription model for its films in the next three months.