CEO Chris McGurk sez d-cinema fosters alternative opportunities

It took longer than he expected — a full year since he took over as chairman-CEO — but Cinedigm topper Chris McGurk says the structure of his company and his business plans for it are aligned.

Non-core businesses have been spun off. He has cut deals giving Cinedigm a share of ancillary revenue for the alternative content, ranging from Ultimate Fighting to Kidtoons, that it is piping into theaters.

As a result, when McGurk addresses SMPTE’s Summit on Cinema on Sunday, he will argue that d-cinema technology has enabled a new era, “Digital Cinema 2.0,” which has the potential to open new opportunities to filmmakers, producers, distributors and exhibitors.

Cinedigm’s model targets the quietest nights in movie theaters, Monday through Thursday, when only 5% of seats are currently filled. The company aims to program a series of indie films and other kinds of “narrowcasting” programs in digital-equipped theaters, creating series on recurring schedules and perhaps even selling subscriptions. A modest uptick in theater attendance, to 10% or 15%, would be a massive win for exhibitors and could build what amounts to a new audience (Daily Variety, July 27).

“When you’re talking about an avid, well-defined audience, like the audience for opera or Kidtoons, it’s easy to get to those people, either through loyalty clubs or through social media or through Internet marketing,” McGurk told Variety. He cited the idea of partnering with energy drinks to reach viewers interested in action-sports through the beverages’ Facebook pages.

As for changing aud habits, McGurk said the key is “content that looks great on the bigscreen and looks great in 3D. Often live, and maybe with an interactive component to it. Provide an enhanced audience experience for content people want to see in a social environment.”

That isn’t just for singles and young couples who are accustomed to going out. McGurk is eyeing cultural programming to lure “the older, wealthier more affluent audience that might be an empty nester and have some time on their hands.” Educational programming is also part of his plans.

Ancillary income is a key to making this work, McGurk said.

“The whole alternative content business is tough to make it an economic business if you don’t distribute to ancillary markets, like the film business,” he said.

It took longer than he expected, but Cinedigm struck its first deal with sharing of ancillary revenue, with New Video, earlier this year.

Cinedigm will pact to share ancillary revenue with exhibs as well. McGurk expects that once they’re cut in, theaters will help promote homevideo and other markets that they now regard as competition.

The second thing that took longer than expected, he said, was spinning off non-core businesses, specifically its pre-show business, sold to Screenvision, and its digital distribution business, sold to Technicolor.

“In both cases we turned a competitor into a partner,” he said.

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