Cinedigm Slashes Fiscal Debt, Ups Q4 Revenue, Enters ‘NFT’ Distribution Space

Distributor Cinedigm announced it has reduced its fiscal debt more than 75% while increasing fourth-quarter (ended March 31) revenue 7% to $8.3 million, from $7.7 million in the previous-year period, according to unaudited results released in a regulatory filing.

Quarterly growth was driven by a 25% surge in content and entertainment revenue of $7.2 million and was partially offset by decline in legacy digital cinema projection equipment revenue. Cinedigm reached an agreement with AMC Entertainment to sell its projection equipment for a net gain of $10.8 million over two years. The sale contributed to Cinedigm reducing total debt by $37.3 million to $11.9 million, from $49.1 million in the prior fiscal year.

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Streaming/digital revenue grew to 75% of the company’s total revenue in the quarter versus 48% in the prior-year quarter. Streaming/digital revenue increased 66% over the prior year quarter and 27% sequentially over Q3. Ad-supported streaming channel (AVOD) revenue increased 331% over the prior-year quarter, subscription streaming channel revenue increased 117% over the prior-year quarter and 65% sequentially over last quarter.

Streaming digital content licensing and sales, driven by partners such as Amazon Prime Video, Apple iTunes and Tubi, generated record digital billings growth for the fourth consecutive quarter.

“We have now successfully completed the transition of Cinedigm from its legacy digital cinema equipment business to a high-growth, independent streaming entertainment channel and content company,” CEO Chris McGurk said in a statement. “We believe our current strategy puts us one step ahead of potential competitors as it enables us to acquire accretive independent streaming assets while rapidly growing the business organically.”

Total streaming minutes in the quarter were about 1.16 billion, a new company record, up 285% versus the prior-year quarter. Monthly ad-supported streaming channel viewers rose to 23.6 million, up 248% over the prior-year quarter. Streaming advertising demand partnerships rose 178% to 64, up from 23 in the prior-year quarter.

Cinedigm said it grew its film and television library for linear streaming, a key growth area, by 88% to 6,591 titles, up from 3,502 titles in the prior-year quarter. Streaming platform partnerships increased 82% to 31 versus 17 in the prior-year quarter, including new linear distribution partnerships and channel expansions with Roku and TCL, among others.

Total SVOD subs exceeded an estimated 683,000 in June 2021, up an estimated 414% over the same period in the prior-year due to rapid expansion of third-party subscriber and wholesale partner relationships. Total streaming minutes in June reached approximately 504.1 million, the highest on record to date and the first month Cinedigm surpassed the half-billion minutes streamed milestone.

“Given our continued subscriber and viewership growth, and with major increases across the board in distribution, platform expansions and partnerships, we delivered an estimated 197% increase in streaming revenue,” said Erick Opeka, chief strategy officer. “Our success is now attracting an even higher caliber distribution deals, ad partners, and most importantly, premium brand and content partners. Given this dynamic, we expect to continue our accelerated growth trajectory over the next twelve months as we focus on the rapid expansion of our business.”

Separately, Cinedigm is entering the non-fungible token (NFT) distribution space with its first film releases under the Fandor Selects label, dedicated to releasing limited editions of classic, contemporary and world cinema to individual parties. Cinedigm acquired Fandor in January.

An NFT is a digital asset (i.e. movie) bought and sold online with cryptocurrency to individual parties for distribution. Film director Kevin Smith (Clerks) earlier this year made news becoming one of the first in Hollywood to release a feature film (Killroy Was Here) as an NFT.

“Our success is now attracting even higher caliber distribution deals, ad partners, and most importantly, premium brand and content partners,” Opeka said.