- ‘Streaming wars’ generate growing demand for fresh content, with leading streaming service providers spending billions on content annually
- Wonderfilm already has a film library with 250 titles and is producing new original content on a regular basis to meet rising demand
- Company expects to generate $100 million in revenue by 2021, $20 million in deferred revenue early next year
- Approximately 69% of U.S. households now subscribe to streaming video services, up from 55% in 2017
Streaming is a highly lucrative segment fueled by the demand to control one’s own entertainment, which gave rise to the VCR back in the 1970s. The media has dubbed this pronounced entertainment conflict the ‘streaming wars’. The race to capture content streaming consumers is a key feature of modern-day entertainment, as shown during a broadcast (http://ibn.fm/0diUt) titled ‘Filmmakers Poised for Big Gains in Hollywood’s Streaming Wars’.
In this race, providers of streaming video on demand are making major investments to secure existing content and commission new content. Efforts are being made to attract major producers and filmmakers. This demand has given companies such as Wonderfilm Media Corporation (TSX.V: WNDR) (OTCQB: WDRFF), a leading entertainment organization producing internationally appealing, high-quality feature films and episodic television, a prime opportunity to claim a piece of the pie.
Wonderfilm has around 100 films of its 250-title library already streaming on the Netflix platform. The company has a unique business model where it differentiates itself by setting up each film as a single-purpose entity packaged for upfront sale, thereby eliminating filmmaking risk (http://ibn.fm/Minb2). In addition, Wonderfilm typically produces low-risk, easy-to-sell films featuring a desirable cast and genre that all but guarantee the financial success of each production.
A Wonderfilm movie is pre-sold for roughly $5 million, which incurs a 10 percent commission to distribution companies. Since the company distributes its films via Wonderfilm Global, a film, television and media foreign sales/distribution joint venture where Wonderfilm Media Corporation has 51 percent ownership, this 10 percent commission remains in-house instead of going to third parties.
Additionally, Wonderfilm makes money from producing fees that are added to the production budget and from overages above the presale threshold. Wonderfilm owns the films after their sale terms end. The company also profits from unsold presale territories, which are countries or territories left off of a film’s presale list.
Wonderfilm retains a continuing annual production slate of $58 million to meet the constant and growing need for content worldwide and has eight green-lit features representing $60 million U.S. in production budgets currently in development (http://ibn.fm/DEBwa). The company expects $20 million in deferred revenue in early 2020 alone and is positioned to realize $100 million in revenue by 2021.
Some of Wonderfilm’s most notable upcoming releases are the action film Inside Game, starring Tyrese Gibson, slated for a fall 2020 theatrical release, as well as the horror film Amityville 1974, which will hit theaters in October 2020. Other IP projects developed by Wonderfilm include a Steve McQueen biopic, a TV series helmed by CSI: Crime Scene Investigation creator Anthony Zuiker and a screen adaptation of renowned novel Merchant of Death.
Deloitte analysts report that for the first time in history, a higher percentage of U.S. households subscribed to a digital streaming service than to traditional pay television. 69% of U.S. households now subscribe to streaming video services, up from 55% in 2017 (http://ibn.fm/6CjLB), and PwC research indicates that consumers are willing to spend more to get the content they want, with total global spending on entertainment and media expected to grow at a CAGR of 4.4% over the next five years to reach $2.4 trillion in global revenue by 2022 (http://ibn.fm/ZBrGa). This provides an excellent opportunity for Wonderfilm, which is already leveraging its rich production schedule and unique business model to profit from the rising demand for streaming content.
For more information, visit the company’s website at www.Wonderfilm.com
NOTE TO INVESTORS: The latest news and updates relating to WDRFF are available in the company’s newsroom at http://ibn.fm/WDRFF