Cinedigm is banking on a pending Super Bowl DVD/Blu-ray Disc release, in addition to expanding streaming video distribution through its Chinese corporate owner, to help it turn the fiscal corner.
Speaking on the third-quarter (ended Dec. 31, 2017) fiscal call, CEO Chris McGurk said he expects the March 6 retail release, Philadelphia Eagles Super Bowl LII Champions, to generate 20% to 30% more than last year’s Super Bowl release.
“While we focus on growing our digital business, we also recognize that we can selectively and opportunistically generate increased profits as a last consolidator in the declining physical DVD and Blu-ray business,” McGurk said.
The executive said sales of Hallmark Christmas titles increased 43% in the quarter from the previous-year period due to online sales driven by Amazon.
Last December, Bison Capital infused a $10 million low-interest loan to Cinedigm as part of a $40 million investment, making the Chinese investment group majority owner.
“In connection with that closing, we retired the remaining approximately $50 million in convertible notes that we have been carrying on our balance sheet, completing the full elimination of the $64 million in notes issued in 2015,” McGurk said.
He said the company continues to streamline packaged media operating costs — $11 million slashed over the past two years, while focusing on select brands such as “Hitchcock,” “Gangster Land,” “Hallmark” and NFL.
McGurk said Bison’s capital infusion for content investment, underscored by a “much more open playing field competitively due to industry consolidation,” would help entertainment distribution going forward.
Specifically, Cinedigm plans to generate “significant distribution fees” by releasing select indie films theatrically and delivering home entertainment content to Chinese platforms, including mobile, TV and online.
“Our advantageous position in China and new joint venture with Starrise Media should help us bring in more premium high-return content, McGurk said.
The executive believes the Starrise agreement could generate upwards of $15 million in annual revenue.
Meanwhile, Cinedigm reported a fiscal loss of $5.9 million on revenue of $18.5 million, compared to a loss of $481,000 and revenue of $24.4 million during the previous-year period.
Through the nine fiscal months, net losses increased to $18.7 million from $5.7 million last year. Revenue fell to $50 million from $70.8 million.