Movie Studios Turn to New Technologies to Spur Growth

NEW YORK, December 17, 2018 /PRNewswire/ --

Movies have long been a past-time for many consumers. However, with the emergence of new technology, the movie industry's growth has been slowed. Now, movie production companies are being pressured to innovate themselves. New strategies of marketing and integration of technology are allowing the market to restart grow. While 3D technology is becoming outdated, the rising use of virtual reality or augmented reality is among the wave of new technologies being introduced into the market. According to data compiled by Plunkett Research Ltd., the U.S. movie (motion pictures) industry is expected to reach USD 24.3 Billion by 2025. The use of new technology and marketing strategies are ways companies are keeping up with consumer trends while appealing to their current audience. The Wonderfilm Media Corporation (OTC: WDRFF), Roku, Inc. (NASDAQ: ROKU), Viacom Inc. (NASDAQ: VIAB), Lions Gate Entertainment Corp. (NYSE: LGF-A), National CineMedia, Inc. (NASDAQ: NCMI)

In the recent years, audience attendance at movie theaters has been slowly dwindling. Movies are struggling to gain the audience's attention, but with the use of new marketing strategies, such as social media, the industry is gaining traction once again. Social media has opened up easy access to communication between industry players and their audience, allowing them to receive feedback and input regarding the production. Other marketing strategies have allowed companies to tap into different regions while expand their global reach. "Basically, social media is an essential part of any film's distribution strategy. The common misconception is that social media is free just because you can set up a Twitter or Facebook profile for free. What is very expensive is the time and effort you need to put into social media," said Elliot Grove, Founder of Raindance Film Festival and the British Independent Film Awards.

The Wonderfilm Media Corporation (OTC: WDRFF) is also listed on the TSX Venture Exchange under the ticker symbol (TSX-V: WNDR). Earlier last week, the Company announced

that, "Chief Executive Officer, Kirk Shaw, has issued the following letter to shareholders.

Dear Wonderfilm Shareholders, While the dust settles after announcing our significant acquisitions in recent weeks, I want to provide a corporate update to our investors as well as prospective investors, which will help provide clarity and understanding to the direction we are moving in. As a publicly traded company, we are experiencing progress and change on many fronts as we look to be a trailblazer in the entertainment and media space, and it is imperative for us to be able to communicate our strategy to investors with complete transparency, so they can make an informed investment decision.

In the months ahead, Wonderfilm will incrementally unveil a coordinated strategy employing AI, advertisement, social media and fan interaction as we build a unique ecosystem able to monetize Wonderfilm content creation from initial concept to premier broadcast. The production budget slate for this original content is $90 million USD.It normally takes around 12 months to complete this production process, and I have a track record of hitting 5% EBITDA on total production budgets.

Leading the Way to the New Economy: The moment my producing partners, Dan Grodnik, Jeff Bowler, Bret Saxon and I joined with the Westshire CPC team to create a public company, Wonderfilm was conceived to forge a pathway into the future delivery of media content.Traditionally, producers and our team relied on a tried and true film-financing model, little changed in 50 years. That model has stagnated as the process of developing, financing and monetizing movies and series broadened and transformed. Wonderfilm was very much conceived as a Company to pioneer a sea-change.

Content creation provides endless opportunities for its monetization, with Wonderfilm leapfrogging over other independent producers leading the industry-wide evolution from an old economy to the new economy, which is propelled largely from widespread global technological advancements.

Cutting-edge AI and Emerging Technology: When we first began raising money for the completion of the transaction with Westshire, many investors expressed their desire for some form of Cannabis or Blockchain venture integration. Although we always carry the opinions and ideas of investors at heart, we must always remain true to our core competencies that make us money today, and continually add value by building functions that make more money, tomorrow. We have an incredible window of opportunity in the entertainment and media space, and we are leaders in propelling this high growth area forward through integrating the emerging technologies that spurred the opportunity in the first place.

Therefore, for strategic reasons, we undertook a great deal of planning and due diligence to create a business model that incorporates various emerging technologies that strengthen our profits and intensify our relationship with our movie and TV lovers. As such, the vision to join arms with an AI-based data analytics and social outreach platform such as Grapevine, along with customizable and interactive "new TV" broadcast channels that incorporate reward points to allow us to become a direct-to-customer model, was born.

Maximizing fan interaction and customization includes the ability to give their voice power in the content that we create and distribute. The most effective way to do this is through creating a Wonderfilm eco-system that includes the use our own inclusive points and rewards system to not only expand fan interaction and engagement but add another monetization stream for the Company.

This objective has a natural affinity to incorporate emerging communication services with big data & artificial intelligence, so they work in tandem to further monetize Wonderfilm produced content.

Launching Digital Streaming Channels: Building on its emerging technology strategy, Wonderfilm entered a partnership to launch a new digital (SVOD - ad supported) Wonderfilm Movie Channel. This channel launches into over 100 million US homes early next year through an existing system operated by a major online retailer.

The Movie Channel becomes both a new revenue stream and distribution outlet for current, past and future Wonderfilm produced content. For the time being, aspects of this truly game-changing vertical integration step must remain sealed as our strategic partners prepare a press campaign for the first quarter of 2019.

Core Production Business Pushes Forward: As strategic growth broadens Wonderfilm's revenue opportunities, it also expands the core business as the recent acquisitions and initiatives are predicated on burnishing the monetization of Wonderfilm productions.

The 2018/19 slate of 17 films continues to be prepped and shot on schedule, with seven movies already in the can for delivery to distributors by the June 30th 2019 year-end. Four of the films going to camera have sensational lead cast that unfortunately can only be announced once each officially moves into production. Two are genre flicks with A-Listers who could garner award recognition.

As mentioned, these 17 films have $90 million in combined production budgets that are "locked in". In active development behind these projects ("the pipeline") is a potential production slate that is significantly larger and growing very quickly. Not included in the $90 million production or the pipeline behind it, are the additional 25 scripts and packages set to be delivered in the recent acquisition from Wol Productions. We will be able to provide further information on these packages once the acquisition has closed.

Celebrity names that we have extensive working relationships with include John Cusack, Nicolas Cage, John Travolta, Bruce Willis, Charlize Theron, among many others.

I would also like to update shareholders on Merchant of Death, the high-profile TV series based on a book, is now in active development with top tier industry partners for production a year down the road. It is anticipated that the first season will have 8 episodes and be distributed through Liosgate. The total estimated production budget for the first season is $40 million USD, and we anticipate that it will be delivered for premier broadcast in 2020.

As mentioned in the Merchant of Death news release, this TV adaptation "also marks the return of Anthony Zuiker as he joins his first new series since he created and produced CSI, which ran on CBS from October 6, 2000 to September 27, 2015 and spanned 15 seasons with multiple franchise additions".

Connecting the World: Partnering with third party distribution companies to sell its content around the world, Wonderfilm leaves about $4 to $5 million a year of potential revenue on the table. To incrementally bring this revenue onto our books, Wonderfilm is assembling a constellation of strategic foreign distribution partnerships in key countries.

Wonderfilm Korea is the first such agreement with financial/distribution partners in South Korea. Now, rather than sell the rights outside of the Company, once a Wonderfilm movie is ready for presale, the Korean territory is immediately acquired through our distribution partners in Seoul.

An immediate benefit is that Wonderfilm gains more upside from Korea than otherwise would have been possible and beyond production and distribution, Wonderfilm also has access to equity funds from Korea. The partnership secures additional investment funds from the Korean market by including Korean elements in a film such as actors, directors or even shooting part or all in South Korea.

Wonderfilm envisions a constellation of similar relationships expanding to include China, UK, Germany, Middle East, France and Spain. Fully realized, this worldwide distribution network streamlines the film packaging process, while eliminating third part distributors in these markets or in markets sharing the same language (excluding US and Canada) and converts forgone sales into a realized source. Heard it Through the Grapevine: Wonderfilm acquired 34% of Grapevine Logic with an eye to acquiring additional equity in the future. To Wonderfilm, Grapevine complements the vertical integration of the Company by bringing under the Wonderfilm umbrella a potent transactional technology company with incredible established online influence and a developed proprietary technology that carves out a unique social media reach of 3.2 billion subscribers. Grapevine as a technology and transactional company is positioned to be an easy to use ecosystem and social media activity centre for online content and becomes a source to enhance the fan experience of Wonderfilm produced movies and TV.

I view Grapevine as the essential web that drives the monetization of other Wonderfilm initiatives to generate never before obtainable interconnected revenue from each facet of Wonderfilm. As these links establish, revenue sources will naturally expand to include loyalty points and tokens to allow fans to invest into Wonderfilm productions. Online AI programmed App technology will directly engage Movie Channel viewers and online influences by building Wonderfilm controlled brands etc. As each phase comes online, Wonderfilm will increasingly use social media engagement to expand the movie viewers' experience from passive to active participation. New levels of financial interaction with media content will be developed through emerging technology, likely surpassing crowd funding and product merchandizing as integration generates a full-time dialogue with Wonderfilm's growing followers.

Burnished by Wonderfilm's content creation, Grapevine too becomes positioned for rapid new growth. Social media primarily drives movie and entertainment marketing in general; a trend Wonderfilm has been utilizing by casting specific actors for roles in its film based on their social media ratings. In short, Wonderfilm now enters the star business, using our new social media access to promote celebrities (movies, sports, television) appearing in our films through Grapevine's current systems, including transactional technology that will significantly enhance Grapevine's business.

As much as AI technology will be used to engage viewers, it's also designed to build a lucrative database of subscribers that can be sold to advertisers or used by Wonderfilm to directly monetize App users and streaming channel subscribers."

Roku, Inc. (NASDAQ: ROKU) pioneered streaming to the TV. Roku connects users to the streaming content they love, enable content publishers to build and monetize large audiences, and provide advertisers with unique capabilities to engage consumers. Roku, Inc. recently announced the launch of The Roku Channel in Canada, a new streaming channel specifically dedicated to helping consumers find free movies, TV shows and more on the Roku(R) platform. The Roku Channel requires no subscriptions, fees or logins. In Canada, the ad-supported channel is expected to average about a third less advertising per programming hour than ad-supported linear TV. At launch consumers can stream hundreds of movies, TV shows and documentaries for free. Every month The Roku Channel will feature a selection of box office hits and great classic movies, starting with Bad Boys, Julie & Julia and Grown Ups, alongside a curated selection of content from existing channel publishers on the Roku platform. Publishers participating at launch include American Classics/Hatch Farm Studios, FilmRise and Total Content Digital; others are expected to be added over time. "We always aim to deliver the best entertainment selection and value for our customers," said Rob Holmes, Vice President of Programming at Roku. "Our users are looking for great free content, and with the launch of The Roku Channel we are making it easy for them to find it."

Viacom Inc. (NASDAQ: VIAB) is home to premier global media brands that create compelling entertainment content - including television programs, motion pictures, short-form content, games, consumer products, podcasts, live events and social media experiences - for audiences in 183 countries. Viacom Inc. recently announced the acquisition of AwesomenessTV Holdings, LLC, a media company and leading digital-first destination for original programming serving global Gen-Z audiences. Awesomeness will join Viacom's portfolio of premiere entertainment brands as part of Viacom Digital Studios. With a network of more than 158 million subscribers, the addition of Awesomeness will strengthen Viacom's dominance among coveted youth audiences and accelerate the company's push to produce original premium digital programming. Awesomeness' Emmy award-winning, youth-focused studio business also complements Viacom's studio production strategy and enhances its established content distribution footprint across the leading digital and social platforms. "Awesomeness has done an incredible job building their brand into a digital media powerhouse for today's most sought-after and hard-to-reach youth audiences," said Kelly Day, President of Viacom Digital Studios and former Chief Business Officer of Awesomeness. "The team brings strong digital expertise, deep connections with top talent and influencers, a world-class television and film studio, and a robust branded content team and creative agency that will accelerate the growth and scale of Viacom Digital Studios."

Lions Gate Entertainment Corp. (NYSE: LGF-A), the first major new studio in decades, is a global content platform whose films, television series, digital products and linear and over-the-top platforms reach next generation audiences around the world. Starz, a Lionsgate company, recently announced STARZPLAY launched Virgin Media in the UK on November 29th. The STARZPLAY premium streaming service will give Virgin TV customers in the UK the opportunity to watch STARZ series all in one place, with future STARZ Originals launching exclusively on STARZPLAY on the same day as the U.S., including season two of "Counterpart" starring Academy Award(R)-winner J.K. Simmons. The latest Subscription Video on Demand service available to Virgin TV subscribers, STARZPLAY offers access to a vast library of additional content including popular series such as "Vida," "Sweetbitter," "The White Princess" and "Mr. Mercedes" as well as an extensive movie library featuring favorites like The Hunger Games at the touch of a button, for only GBP 4.99 a month. Virgin TV customers who add the STARZPLAY subscription to their package can view the content by pressing Home on their V6 remote control and then clicking On Demand followed by Box Sets. "The partnership with Virgin Media is an exciting next step in the rollout of the STARZPLAY platform, expanding the audience for our wide range of STARZ Originals, TV series and movies exclusively available on STARZPLAY to a whole new and expansive customer base," said Chris Albrecht, President and Chief Executive Officer of Starz.

National CineMedia, Inc. (NASDAQ: NCMI) is America's Movie Network. Recently, National CineMedia and ScoreStream, the first dedicated crowd sourcing platform for local sports, teamed up to bring local sports highlights to movie theaters. The ScoreStream mobile app lets fans in the stands crowd source scores, photos and videos of their local teams while following all the teams in their area in real time. The best of the best of this user-generated content from each local region will now be featured regularly in movie theater lobbies around the country across NCM's Lobby Entertainment Network (LEN) and also, when sponsored by a local advertiser, on the big screen in a new Noovie Local content segment powered by ScoreStream in NCM's Noovie pre-show. Noovie leads audiences to what's next in entertainment, with great content, commerce, and interactive games on over 21,100 screens in over 1,700 theaters nationwide. "When we created our Noovie pre-show, movie audiences told us that great local content was one of the things they most wanted to see, along with behind-the-scenes movie features and games," said NCM Senior Vice President of Local Sales and Affiliate Partnerships Stacie Tursi. "If there are two things that people are passionate about, it's movies and sports. So, working with ScoreStream to bring that combination to Noovie is a home run. When you think about it, some of the most beloved movies of all times are about sports, and this is an amazing way for fans to give their teams and players the recognition they deserve up on the big screen, supported by businesses in their community."

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