In the streaming world, the decisions by Disney Plus and Netflix to get into the ad business were big news.
Cinedigm faced a similar choice and opted to get into the ad-supported streaming business in addition to its subscription business.
The company said its ad revenue grew 192% in 2021, beating the CTV growth rate by more than 236%. Now it’s beefing up its sales force and Cinedigm Ad Solutions, and predicts it will outperform the burgeoning overall connected TV market in 2022, which the IAB expects to show 39% growth.
Erick Opeka, president of Cinedigm Networks and chief strategy officer of Cinedigm, told Broadcasting+Cable that the company started out as a pure-play in SVOD.
“About four years ago, I said we probably need to do SVOD and AVOD to get a broader based of people into the services,” Opeka said. “Fast forward to today, between our app based services and launching a ton of FAST services, we went from zero to about 40 million monthly users across our platform.”
Some of that growth came through acquisition. Among the companies Cinedigm purchased was horror site Bloody Disgusting. The owners of Bloody Disgusting–Heather Luttrell and her brother Peter Luttrell–were ad industry professionals who previously built a business they sold to Demand Media.
“They’re serial ad tech entrepreneurs and direct ad sales experts," Opeka said.
Heather Luttrell is overseeing the build out of Cinedigm Ad Solution, which internally is referred to as “CASH,’ Opeka said, without being able to explain what the “H” stands for.
Cinedigm has been staffing up its ad sales operation, hiring a direct sales force to meeting with media buyers and clients. The staff currently has about eight members.
“The goal is to build those relationships directly,” Opeka said. “We’ll still do some programming but we’re really moving almost exclusively into the direct sales space. I imagine we’ll be direct selling the bulk of our inventory over the next 12 months.”
In the advertising world, Cinedigm is positioning itself as being in the enthusiast business and has separated its channels and brands into interest budgets, one for fandom, one for horror, one for family programing. For example, the family bucket includes its Dove Channel, the Bob Ross Channel and MyTime, a clone of Lifetime, all of which reach a female skewing audience with PG-rated shows.
Cinedigm added another bucket–multicultural-when it acquired DMR in April. It also owns KOR, a virtual MVPD offering Korean programming.
CTV offers advertisers enhanced targeting and other advanced features and Cinedigm works with Iris TV, Gracenote, SpringServe and Publica as ad tech purveyors.
Advertisers can take advantage of Cinedigm’s large social footprint, including about 20 million subscribers on various YouTube channels. It also as a brand studio to create custom content and integrations for sponsors
Opeka said Cinedigm is focusing on CTV and will need robust ad sales if its channels are eventually going to be able to support original programming and grow the way the cable industry did.
For now, Cindigm is keeping ad loads at about half the 16 minutes per hour ad load seen on cable. “Our audience is accustomed to less ads. This allows us to provide a good programming experience, and its still an improvement over broadcast,” he said.
As financial pressure to add programming increases, ad load are starting to creep up. “I don’t think this business goes to 16, although I think you’re seeing some of the largest companies pushing it in that direction.” ■
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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