June 26, 2018
After myriad quarters of fiscal losses, home entertainment distributor and over-the-top video operator Cinedigm reported its first quarterly profit.
The distributor generated first-quarter (ended March 31) income of $46,000 on revenue of $17.6 million. That compared to a loss of $9.6 million and revenue of $19.5 million during the previous-year period.
Cinedigm said its content and entertainment business unit – which includes packaged media – decreased revenue 12% to $31.1 million from $34.2 million in fiscal 2018 during the previous-year period.
The company said the revenue decline was due to lower overall sales volumes for physical product and a change in the mix of content sold.
“Our traditional DVD and Blu-ray Disc business continues to be negatively impacted by changing consumer behaviors and digital market shift to more original productions has lowered demand for third party content,” Cinedigm said in a regulatory filing. “Our product mix has also shifted significantly toward licensed content in the current year.”
The decline in physical product sales was partially offset by a $700,000 increase in sales related to OTT channels (Dove Channel, Docurama and CONtv) and a slight increase in distribution related revenue.
“We plan on [OTT] becoming the biggest revenue contributor for the company, and [it] increased last year by 23% in aggregate, led by a 36% increase in OTT channel,” CFO Jeffrey Edell said on the fiscal call.
Meanwhile, net loss for the fiscal year increased 21.7% to $18.5 million from $15.5 million during the previous-year period. Revenue dropped 25% to $67.6 million from $90.3 million.