Erik Gruenwedel

March 3, 2023

Cinedigm chairman/CEO Chris McGurk is staking the future of the Los Angeles-based home entertainment distributor/digital operator on faith-based content and streaming video.

Facing an underperforming stock price and growing investor concerns, McGurk March 2 issued a shareholder letter looking to reassure Wall Street that the company is firing on all cylinders — underscored in part by plans to repurchase 10 million worth of common stock through the next 12 months.

“We believe that purchasing undervalued Cinedigm shares is a superb investment strategy for the company,” McGurk wrote, adding that he, as owner of more than 2 million shares, “understand[s] the frustration that all our shareholders are feeling now.”

While Cinedigm’s current share price hovers around 50 cents (well below Nasdaq’s $1 minimum), McGurk says analysts who study and follow Cinedigm have targeted the company’s stock price at from $2.25 to $5 per share.

To get there, Cinedigm this week acquired two faith and family media properties, Dove.org and Christian Cinema, the eighth acquisition in the past two years. Both properties, McGurk believes, will help Cinedigm capitalize on a growing faith-based entertainment industry across movies, reviews, news, podcasts, ratings for films, TV shows, video games and online content, among other distribution channels.

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“This past weekend’s box office success of [Lionsgate’s] Jesus Revolution demonstrates the huge opportunity in this important and growing entertainment segment,” McGurk wrote.

Through transactional VOD platform Christian Cinema, Cinedigm hopes to replicate the fiscal success it has with its Bloody Disgusting horror platform, which saw the theatrical release of Terrifier 2 defy box office odds and segue into a successful digital retail run.

“We are now well-positioned to compete in two of the hottest genres in Hollywood,” McGurk wrote.

Separately, the launch of ad-supported streaming video aggregator Cineverse, backend technology provider Matchpoint, Cinedigm Ad Solutions and the Cinedigm Podcast Network support his contention the company can reach more than 50% in annual streaming revenue growth and $150 million in revenue within four years while also significantly improving margins and attaining sustained profitability, he wrote.

Cinedigm currently sits on a content library of 60,000 indie movies and TV shows, including 25,000 titles added this year.

“[We aim to become] the Spotify of independent film and TV,” McGurk wrote.

The executive said the Matchpoint platform in January not only delivered 9,000 titles, comprising 50,000 content assets, into the streaming ecosystem, but the platform also facilitates content management, content preparation, content delivery, programming, video streaming apps and analytics.

“For perspective, that is 2.3 times the total number of movies on Netflix or 7.2 times the number of movies on Hulu that we processed in just a single month,” McGurk wrote, adding that Cineverse now has more than 19,000 titles available to buy, rent, stream with ads, or subscribe to commercial-free.

“Our goal is to have hundreds of thousands of titles over the next 30 months that, like Spotify before us, are expertly hand-curated or easily searched,” he wrote.

Cinedigm shares were up 4 cents in midday trading.