Research Shows the U.S. Film Industry Growth Outpaces the Overall Economy

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Dec 10, 2018, 09:00 ET

NEW YORK, December 10, 2018 /PRNewswire/ --

The U.S. film industry has been lagging behind over the past few years. Despite the slowed growth, the market is still projected to grow. Now, many movie producers in the industry are looking into strategic alternatives to bolster sales. Marketing and advertising movies have always been a go-to strategy for companies, but some are diving further in. Businesses are looking for other advertising alternatives, such as social media, to connect with the audience more and receive feedback. According to data compiled by IBISWorld, obtained by Deadline, the American film industry is projected to grow by a CAGR of 2% to USD 47.9 Billion by 2022. The research conducted also shows that the film industry is still growing slightly faster than the overall economy and it is projected to retain more of its revenue as profits grew by 12.6% in 2017 compared to just 10.6% in 2012. Box offices are projected to grow at a slower rate, but regardless, the market will continue to be driven forward as new players in the industry expand into movie and film production. The Wonderfilm Media Corporation (OTC: WDRFF), Netflix, Inc. (NASDAQ: NFLX), Comcast Corporation (NASDAQ: CMCSA), Twenty-First Century Fox, Inc. (NASDAQ: FOXA), AMC Entertainment Holdings, Inc. (NYSE: AMC)

Now, movie makers are challenged with the task on how to grow and generate larger revenue. Consumer trends are the biggest factors as to how movie production companies can stay within the industry. According to Stephen Follows, a film data researcher and producer, a larger number of films are becoming based on real-life events, while Documentaries are becoming increasingly popular. However, regardless of the consumer trend, growth is largely self-regulated. "Drawing on formidable strengths, the U.S. film industry has a proven ability to produce films that generate hundreds of millions of dollars, including revenues from distribution across strong domestic and international networks. Success in the industry is based on creativity and financing, and the industry is largely self-regulated," said SelectUSA, a U.S. government program led by the U.S. Department of Commerce.

The Wonderfilm Media Corporation (OTC: WDRFF) is also listed on the TSX Venture Exchange under the ticker symbol (TSX-V: WNDR). Earlier last month, the Company announced breaking news that, "on November 19, 2018 it has entered into a letter of intent to acquire 100% of Starbury Media ("Starbury") from Sun Seven Stars Investments Group ("SSSI"), 34% of Grapevine Logic Inc. ("Grapevine") and a slate of over twenty-five movie production script packages from WOL Productions Inc.("Production Packages") in an arm's length transaction for CAD$30,000,000 (the "Transaction").

Starbury, the sporting brand and media company co-founded by Dr.Bruno Wu and Stephan Marbury, provides immediate access to a network of elite, high profile athletes and sports personalities who aim to capitalize on and transcend their sporting success by developing their personal brand through acting roles, branding services, merchandising and events.

Starbury's Fighting Group, a fighting sports digital asset operation company and division of Starbury Media, will kickstart fighters and action stars by working together in media, led by its recently appointed Chairman and legendary Canadian & British boxing champion Lennox Lewis.

Grapevine, the world's leading end-to-end social media influencer marketing platform, will leverage Wonderfilm's original content and pursue monetization strategies with celebrity influencers by penetrating the loyalty management market exclusively for motion pictures, TV production and sports media. Grapevine now has the production outlet necessary to bring their 4,700 corporate brands into broader media channels, while Wonderfilm has direct advertising, marketing, analytics and alternative distribution channels for its own original content.

Additionally, a slate of over twenty-five movie and TV series (English and Chinese language) production script packages will be provided by WOL Productions Inc. (majority owned by SSSI), which includes the action thriller, "Ana", starring Gong Li with Martin Campbell attached as the Director. Given that some of these assets are already fully packaged, Wonderfilm is able to immediately begin the pre-selling process.

Combining Starbury, Grapevine and the Production Packages with Wonderfilm's worldwide film & television production strength, increases the Company's vertical and horizontal integration into the wider entertainment industry. Wonderfilm's new subscription video on demand ("SVOD") digital channels will be among the first beneficiaries of the unified companies, immediately gaining top tier access to the sports market, significant social media coverage, corporate advertising, sponsorship revenues and exclusive Grapevine content.

"We are executing Wonderfilm's strategy of becoming an entertainment and media innovator by combining social media, film & TV production, online applications and new branding sources to integrate viewers and fans to their media through continuous online engagement and cross-pollination of media consumers through branded Apps, AI and cutting-edge interactive features that seamlessly blend online interaction with premier broadcasts on the digital channel, which includes the launch of Wonderfilm's new digital movie channel expected in 2019," stated Kirk Shaw, CEO of Wonderfilm.

Dr.Bruno Wu, co-chairman and CEO of SSSI remarked, "We believe that the combination of these platforms, which include our asset digitization and artificial intelligence teams, will differentiate us in the marketing and advertising business. Global sport is increasing in unison with the entertainment and media space, so it is natural for us to join these arms and create synergies that are extremely beneficial for all involved to provide a truly unique, scalable and superior offering to the market."

About The Wonderfilm Media Corporation: Wonderfilm is a leading publicly traded (TSX Venture Exchange: WNDR) entertainment company with production offices in Los Angeles, corporate offices in Vancouver BC and its Asian distribution office in Seoul, South Korea. The Company's core business is producing market-driven independent feature films and quality television series for multi-platform global exploitation. Current productions include the feature films, Moose (staring John Travolta) and Primal (starring Nicolas Cage.) The Company's guiding philosophy is bringing new financing solutions to an entertainment industry increasingly looking for funding and co-production alternatives. Wonderfilm is a producer and distributor only for the projects disclosed. The legal ownership of movie productions are held in a special purpose legal entity held at arm's length to the Company to facilitate for the qualification of various levels of domestic and foreign government tax credit incentives that are customary in the film and production business."

Netflix, Inc. (NASDAQ: NFLX) is the world's leading internet entertainment service with 130 million paid memberships in over 190 countries enjoying TV series, documentaries and feature films across a wide variety of genres and languages. Recently, Netflix announced its continued investment in European content with the announcement of new original series from Sweden, France, Germany, Spain and the UK. Erik Barmack, Vice President of International Originals, discussed several new projects in his keynote speech at the C21 conference in London. Commenting, Erik Barmack said: "Great stories unite and delight us, no matter where in the world they come from or what language they are in. There will come a time when half of the top ten shows globally won't be in the English language, and shows with a multinational cast - and often in multiple languages - will become the norm, as long as technology can get the right story in front of the right person in a language they can understand. We are delighted to continue our investment in great European creators and talent, bringing fresh perspectives and untold stories to Netflix members across the world."

Comcast Corporation (NASDAQ: CMCSA) creates incredible technology and entertainment that connects millions of people to the moments and experiences that matter most. Recently, Comcast announced its Xfinity TV customers can sync their accounts with Movies Anywhere and seamlessly combine eligible movie purchases from the Xfinity Digital Store with those from other Movies Anywhere digital retailers and access them on Xfinity X1, the Xfinity Stream app and other Xfinity TV platforms. Comcast is the first pay TV provider to join Movies Anywhere, the pioneering movie service that launched last year in the U.S. with an unprecedented five Hollywood studios and now - with Comcast - seven major digital retailers (Xfinity, iTunes, Amazon Prime Video, Vudu, Google Play, Microsoft Movies & TV and FandangoNOW). Comcast has joined Movies Anywhere in time for Xfinity TV customers to take advantage of Movies Anywhere's current syncing offer. For a limited time, fans who sync for the first time with Xfinity, or one of the other participating digital retailers, will receive a copy of "Happy Feet." Those who sync for the first time with two digital retailers also receive "The Martian" and "The Fate of the Furious." "Xfinity X1 is the only platform that provides customers with seamless, integrated access to all of their entertainment choices within one user interface, whether that content is live, on demand, streamed, recorded, rented or owned," said Daniel Spinosa, Vice President, Entertainment Services, Comcast Cable. "And by joining Movies Anywhere, Xfinity TV customers can now easily link their accounts across participating digital retailers and watch their consolidated digital library on X1, or anywhere in the country via the Xfinity Stream app and portal."

Twenty-First Century Fox, Inc. (NASDAQ: FOXA) is one of the world's leading portfolios of cable, broadcast, film, pay TV and satellite assets spanning six continents across the globe. Recently, 21st Century Fox and Caffeine, the next-generation social broadcasting platform for gaming, entertainment, and other creative content announced that 21CF led a round of funding, which also included participation from existing Caffeine investors Andreessen Horowitz and Greylock Partners, and other undisclosed partners. Caffeine also announced a content agreement with Live Nation to bring live music concerts to the social broadcast platform in Q4 2018. 21CF invested a combined USD 100 Million into Caffeine and a newly formed venture called Caffeine Studios that is jointly owned by FOX Sports and Caffeine. The new studio will leverage FOX Sports' expertise in live events and programming to create exclusive esports, video game, sports, and live entertainment content for Caffeine's next-generation social broadcasting platform. In addition, Lachlan Murdoch, 21CF's Executive Chairman, will join Caffeine's Board. 21CF's stakes in Caffeine and Caffeine Studios will be part of the proposed new "Fox," the company that will be formed upon completion of the proposed transaction between 21CF and The Walt Disney Company, and where Mr. Murdoch will serve as Chairman and Chief Executive Officer. "The combination of the Caffeine platform with a content studio that benefits from Fox Sports' expertise in live events and programming will help position Caffeine to deliver compelling experiences in esports, video gaming and entertainment," said Lachlan Murdoch. "We are excited to partner with Caffeine and build something special for fans in the growing live social streaming esports and gaming space."

AMC Entertainment Holdings, Inc. (NYSE: AMC) is the largest movie exhibition company in the U.S., in Europe and throughout the world with more than 1,000 theatres and nearly 11,000 screens across the globe. AMC Entertainment Holdings, Inc. recently reported its results for the third quarter ended September 30, 2018.Total revenues increased 3.6% to USD 1,221.4 Million compared to total revenues of USD 1,178.7 Million for the three months ended September 30, 2017. Total revenues in the quarter included approximately USD 325.8 Million of revenues from our international theatres as compared to USD 333.0 Million for the three months ended September 30, 2017. Admissions revenues were nearly unchanged at USD 751.4 Million compared to USD 753.5 Million for the same period a year ago, primarily driven by an 8.6% surge in attendance at our U.S. theatres compared to the third quarter a year earlier, which was a U.S. attendance record for the third quarter for AMC, offset by a decline in U.S. average ticket price of 6.6% and industry-wide softness in Europe. Adam Aron, CEO and President of AMC, said, "We are so thoroughly encouraged by AMC's performance in the third quarter of 2018, both because of the USD 142.4 Million of Adjusted EBITDA we generated and the enormous strategic advances our company made in the quarter. We performed significantly ahead of our expectations going into the quarter, and when combined with our stellar second quarter results, we are now highly confident in saying that from an Adjusted EBITDA perspective, full year 2018 will be the best-ever year in AMC's 98-year history."

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