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LAS VEGAS — Cinedigm Chairman and CEO Chris McGurk asserted that by using a “narrowcasting” programming model, there are a string of potential opportunities afforded by digital cinema, including increasing exhibition revenue, distribution cost saving, and operational and management efficiencies.
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Speaking Sunday during his keynote at the NAB’s Technology Summit on Cinema, he noted that about 5% of seats are occupied in theaters Monday thru Thursday, and roughly 15% annually. “That means theaters are empty upwards of 85% of available times on average, and still the domestic box office is a more than $11 billion d business,” he said, adding that even an incremental increase could result in a $1 billion business.
Noting that Cinedigm and cinema is “taking a page from the cable TV world,” McGurk’s proposed narrowcasting model would aim alternative content at target audiences such as kids, sports fans—or independent film enthusiasts.
Digital cinema “can be a white knight for the struggling indie film business,” McGurk suggested. “Studios are releasing fewer independent films, creating a glut of indie films that can be narrowcast over a national footprint.”
He added that digital cinema could also deliver a range of alternative content that is 3D, live or interactive.
McGurk believes that it is time to act, as digital cinema has reached a critical mass — in fact more than 50% of theaters worldwide and 67% in North America alone. This did not come without significant cost to the industry, the capital expenditures required were upwards of $1.6 billion dollars in North America alone, he said.
But McGurk believes filling seats is only half of what is needed — that the other “essential” half is to develop robust ancillary markets for the alternative content that could “account for two to fifteen times” the value of the box office.
He suggested profit sharing programs with the theater owners who would be partners in marketing efforts.
McGurk added that exhibitors are asking for more of this type content, saying that he has heard from theaters owners that “we need more indie films and alternative content like we need air.”
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