Cinedigm makes a big leap in online video: Entertainment distributor and digital network operator acquires Future Today, a video platform company operating over 700 of the best free channels, including HappyKids.tv and Fawesome.tv, in a transaction valued at $ 60 million.
Cinedigm has agreed to pay $ 45 million in cash and $ 15 million in common shares for Future Today. Privately owned Future Today is majority-owned by the founders Alok Ranjan and Vikrant Mathur, who founded the company in 2006 and are planning to sign a long-term employment agreement with Cinedigm following completion of the deal.
"We think we have found an undiscovered jewel," said Chris McGurk, chief executive officer of Cinedigm, in an interview.
According to Cinedigm, Future Today will significantly extend its OTT footprint – with 5.2 million active users a month and a large-scale, advertising-backed VOD. This is in addition to Cinedigm's 2.4 million monthly assets for its own OTT networks, such as Dove Channel and CONtv. Cinedigm said the transaction should immediately generate profits: Future Today is generating net income and positive cash flow, and its revenue in 2018 has increased nearly 150% to $ 23.9 million.
"One of the reasons we were really attracted to the company is that we felt that they really knew what they were doing," McGurk said. "They were smart enough to start a business in the fastest-growing part of the OTT market: video-on-demand with advertising support."
The transaction is expected to close in the second quarter of 2019, subject to customary closing conditions. McGurk said the Future Today acquisition will be a key enabler for the future, as Cinedigm finishes putting an end to the activities of its film equipment by selling its film projection systems.
Future Today CEO Alok Ranjan and co-founder Vikrant Mathur said in a statement: "The growing portfolio of channels and AVOD footprint combined with Cinedigm's premium content and important network distribution, should drive strong immediate growth and create substantial shareholder value. "
Cinedigm is majority-owned by Bison Capital, a Hong Kong-based investment firm, which will finance the acquisition of Future Today, according to McGurk. "When they took a majority stake in the company, one of their main goals was to use our motto to target mergers and acquisitions so that we could develop our footprint here very aggressively," he said. he stated, as well as to expand its distribution channel activities. Asia.
Future Today owns and operates more than 700 content channels, which have already been installed more than 60 million applications, including HappyKids.tv, one of Roku's top 25 free channels. In total, the group manages more than 200,000 film, television and digital content, representing an average of 85 million video views per month, including entertainment, film, food and lifestyle, video and video content. Animation and children. In addition, Future Today manages the OTT services of 350 content owners, producers, distributors and media companies, including Filmrise, AFV, WatchFreeFlix and Kabillion.
"We felt that they were exactly the company to integrate with Cinedigm to strengthen our efforts in streaming in general, and AVOD in particular," said McGurk, noting that a company whose feeds cash were positive "is quite unusual in this space."
Another advantage of the deal is that Future Today will have access to Cinedigm's digital rights library on 28,000 titles of independent films, TV episodes and OTT channels, which, according to the companies, will increase the audience and revenues of the AVOD network. Future Today. Cinedigm in turn wants to expand Future Today's OTT channel network distribution contracts with device manufacturers and service providers around the world.
The transaction comes amid a wave of investment in the AVOD segment. Earlier this year, Viacom acquired $ 340 million of the free streaming Pluto TV platform, while Tubi finalized $ 25 million of Silicon Valley Bank debt financing in December 2018 to facilitate acquisitions. of content.
Future Today, based in Menlo Park, Calif., Operates very efficiently with approximately 24 full-time employees in the United States and India. Future Today has produced more than 3,000 original videos using its content production capabilities in India, and Cinedigm hopes to exploit this production model at lower cost for other divisions of the company.
"They have been in the industry for a long time and can launch and adapt channels at very low cost and quickly," said Erick Opeka, president of Cinedigm Digital Networks. He added that Future Today's advertising and mailing capabilities will help accelerate Cinedigm's oversized channels, including the recent takeover of Viewster, a global video-on-demand (OTT) service based in Switzerland.