Profile: Cinedigm Digital Cinema Corp. (CIDM.O)

Cinedigm Digital Cinema Corp., formerly Access Integrated Technologies, Inc., incorporated on March 31, 2000, provides technology solutions, software services, electronic delivery and content distribution services to owners and distributors of digital content to movie theatres and other venues. The Company has three segments, media services (Media Services), media content and entertainment (Content & Entertainment) and other (Other). The Company’s Media Services segment provides technology solutions, software services and digital content delivery services via satellite and hard drive to the motion picture and television industries, primarily to facilitate the conversion from analog (film) to digital cinema. The Company’s Content & Entertainment segment provides content distribution services to theatrical exhibitors, in-theatre advertising and motion picture exhibition to the general public. The Company’s Other segment provides hosting services and network access for other Web hosting services (Access Digital Server Assets).

Media Services

The Media Services business consists of Christie/AIX, Inc. doing business as AccessIT Digital Cinema (AccessIT DC) and Access Digital Cinema Phase 2 Corp. (Phase 2 Corporation); Hollywood Software, Inc. doing business as AccessIT Software (AccessIT SW); Access Digital Media, Inc. (AccessDM) and FiberSat Global Services, Inc. doing business as AccessIT Satellite and Support Services, (AccessIT Satellite and, together with AccessDM, (DMS)), and Core Technology Services, Inc. (Managed Services).

The business of AccessIT DC and Phase 2 DC consists of the ownership and licensing of digital systems to theatrical exhibitors and the collection of virtual print fees (VPFs) from motion picture studios and distributors and ACFs from alternative content providers and theatrical exhibitors, when content is shown on exhibitors’ screens. As of March 31, 2009, Phase 2 DC has supply agreements with three equipment vendors. As of March 31, 2009, Phase 2 DC had 54 Systems deployed. Digital Express e-Courier Services provides worldwide delivery of digital content, including movies, advertisements and alternative content such as concerts, seminars and sporting events to movie theatres and other venues having digital projection equipment.

Digital Cinema customers are mainly motion picture studios and theatrical exhibitors. During the fiscal year ended March 31, 2009 (fiscal 2009), AccessIT DC’s customers consists 83% of Media Services’ revenues. Six customers, 20th Century Fox, Disney Worldwide Services, Paramount Pictures, Sony Pictures Releasing Corporation, Universal Pictures and Warner Brothers, each represented 10% or more of AccessIT DC’s revenues and together generated 78%, 69% and 49% of AccessIT DC’s, Media Services’ and consolidated revenues, respectively, and are also customers for digital content delivery and entertainment software. During fiscal 2009, DMS’s customers consited 9% of Media Services’ revenues. Two customers, Universal Pictures and Ideacast, Inc. each represented 10% or more of DMS’s revenues and together generated 37% and 4% of DMS’s and Media Services’ revenues, respectively, and Universal Pictures is also a customer for entertainment software.

AccessIT SW provides software applications and services to support customers of varying sizes, through software licenses, its ASP Service, which it hosts the application through Managed Services and client access via the Internet and provides outsourced film distribution services, called IndieDirect. The software of AccessIT SW consists of Theatre Command Center (TCC), Theatrical Distribution System (TDS), Theatrical Distribution System (Global) (TDSG), Exhibition Management System (EMS) and Royalty Transaction Solution (RTS). Its distributed software product is Vista Cinema Software (Vista). The Company’s TCC system provides in-theatre management for digitally–equipped movie theatres, enabling an exhibitor to control all the screens in a movie theatre, manage content and version review, show building, program scheduling and encryption security key management from a central terminal, whether located in the projection booth, the theatre manager’s office or both. AccessIT SW’s TDS product is currently licensed to several motion picture studios and the TDS product consists 65% of AccessIT SW’s revenue during fiscal 2009. AccessIT SW also provides outsourced movie distribution services, specifically for independent film distributors and producers, through IndieDirect. AccessIT SW also distributes Vista, a theatre ticketing solution, which is based in New Zealand.

The Company competes with Technicolor Digital Cinema and MacAndrews & Forbes Holdings, Inc.

Managed Services

The Company has developed two Managed Services offerings: network and systems management, and managed storage services. Network and systems management services include network architecture and design; systems and network monitoring and management; data and voice integration; project management; auditing and assessment; on site support for hardware installation and repair, software installation and update; an around the clock Citrix server farm (a collection of computer servers), and managed hosting services. Its managed storage services, known as AccessStorage-on-Demand, include hardware and software from such industry leaders as EMC Symmetrix, StorageTek and Veritas; pricing on a per-gigabyte of usage basis, which provides customers with primary data storage that is connected to their computers; storage area network (SAN) technology and SAN monitoring by its global network command center (GNCC), and a disaster recovery plan for customers that have their computers located within an Internet data center (IDC) by providing them with a tape back-up copy of their data that may then be sent to the customer’s computer if the customer’s data is lost, damaged or inaccessible.

All managed storage services are available separately or may be bundled together with other services. Its Managed Services customers mainly include major and mid-level networks and Internet service providers (ISPs), various users of network services, traditional voice and data transmission providers, long distance carriers and commercial businesses, and the motion picture studio customers of its Media Services.

Content & Entertainment

The Content & Entertainment segment consists of ADM Cinema Corporation (ADM Cinema) doing business as the Pavilion Theatre (the Pavilion Theatre); UniqueScreen Media, Inc., Vistachiara Productions, Inc., The Bigger Picture (The Bigger Picture) doing business as Cinedigm Content and Entertainment Group (CEG). During fiscal 2009, USM and its Pavilion Theatre consists 71% and 24% of Content & Entertainment revenues, respectively. Its advertising business consists mainly of local advertisers, with no one customer representing 10% of in-theatre advertising revenues and all the customers of its Pavilion Theatre are the general public. The CEG business consists of owners of alternative content, such as sporting events, concerts, children’s programming and other content.

The Company competes with The Walt Disney Company, Sony Corporation of America, Screenvision US and National CineMedia, LLC (NCM).

Other

The Other segment consists of data centers and access digital server assets. A data center provides services through its three IDCs. An access digital server asset provides hosting services and provides network access for other Web hosting services.