Digiplex Chairman and CEO Bud Mayo wants a bigger stage to preach his gospel of alternative content.
Now that Carmike Cinemas has announced plans to purchase his more than 200 screens across 21 theaters in a deal worth north of $45 million, he’s about to get a chance to evangelize.
“With Carmike we’re fast-forwarding into a national platform,” said Mayo. “We are contributing very complementary geographic sites, with markets they are not in. And I think most importantly we’re offering the expertise that we’ve created for more than a decade, not only with digital cinema, but the use of digital cinema on the content side, in particular alternative content, because that is a part of the future of this business.”
With roughly 2,660 screens, Carmike is the country’s fourth largest theater chain. It is headquartered in Columbus, Georgia and operates primarily in rural and suburban areas. Digiplex, shorthand for Digital Cinema Destinations Corporation, operates primarily on the East Coast, in states such as Maryland, New Jersey and Connecticut. The deal is subject to regulatory approval.
Mayo has been busy trying to bring his vision to life at Digiplex by offering a venue for documentaries and films on niche topics such as running, nursing and football head injuries that are targeted towards specific groups or demographics.
“When we’re talking about alternative programming, we’re not talking about a major P&A budget that supports them,” Mayo said. “So that means pinpoint marketing. It means identifying audiences, getting in touch with them, doing local outreach, and in theater market, to eventize the launch of content to audiences.”
The documentaries and niche films Digiplex screens comes courtesy of alternative content distributor DigiNext. Together the partners brought films such as “Kinderblock 66: Return to Buchenwald,” a Holocaust documentary, and “Cut Poison Burn,” a look at the challenges facing cancer research, to theaters. The exhibitor’s 50% stake in the company will belong to Carmike following the merger, a prospect that excites the DigiNext team. The company thinks convincing directors and producers to sign with them will be easier given the broader reach.
“Every filmmaker wants to be in movie theaters and this merger allows us to be in more movie theaters for alternative content type films than ever before,” said Larry Meistrich, DigiNext co-founder. “In a way these films are going to be treated like studio films and that’s important to filmmakers.”
In order to save on advertising costs, Mayo teaches the staff of his theaters to be ambassadors for the alternative content films he screens. He also takes advantage of in-theater advertising and hyper-local marketing as a way of staying nimble and limiting overhead. Schooling Carmike’s staff in the Digiplex approach could begin next September or October.
“We’re not going to increase the theater staff, but we’re going to repurpose it,” said Mayo. “We want to hire the kids who want to be in the school play. We want to hire managers and assistant managers who like getting up in front of people.”
With studios trimming their slates and making fewer, bigger bets on expensive comic book films and animated fare, theater chains can fill the void, Mayo argues.
The alternative content productions he screens are available during the week and outside of peak weekend showtimes. Because they appeal to specific constituencies, these films bring in seven to eight times the revenue of the films they replace. Moreover, they contribute to concessions sales and add to in-theater advertising revenue (the ads that play before a movie pay theater owners based on the number of people in the audience).
“I view Carmike as an almost clean slate when it comes to alternative content and distribution,” said Mayo. “We think the future of the business is to have a mix of alternative content choices along with the Hollywood tentpoles.”