Domestic Theatrical Distribution
We distribute motion pictures directly to movie theatres and our strategy is to release approximately 10 titles per year in theatres, which includes both our productions and acquisitions. Our approach to acquiring films for theatrical release is similar to our approach to film production in that we seek to limit our financial exposure while adding films to our release schedule and our video library. The decision whether to acquire a motion picture for theatrical release entails a process involving key personnel in the industry, including those from the releasing, home entertainment and acquisitions sectors. Centurion discusses a film’s expected critical reaction, marketability, and potential for commercial success, as well as the cost to acquire the picture, the estimated P&A required to enable the film to reach its widest possible audience, and the ancillary market potential for the film after the theatrical release.
We prepare our marketing campaign and release schedules to attract the widest possible audience, with P&A typically tailored to minimise financial exposure while maximising revenue potential for our releases. We construct release schedules taking into account moviegoer attendance patterns and competition from other studios’ scheduled theatrical releases. We use either wide or limited initial releases depending on the film. We generally spend less than half on P&A for a given film than a major studio and design our marketing plan to cost-effectively reach the widest possible audience.
Our company periodically assesses estimates and the underlying assumptions based on a film’s performance and general market conditions. We believe that our estimates are reasonable, based on our experience and knowledge of the business; however, in light of the significant uncertainties inherent in these estimates, we cannot assure that we will achieve the estimated financial performance set forth in our assessments.
We may revise the release date of a motion picture as the production schedule changes or in such a manner as we believe is likely to maximise revenues. Additionally, there can be no assurance that any of the motion pictures scheduled for release will be completed, that completion will occur in accordance with the anticipated schedule or budget, or that the motion pictures will necessarily involve any of the creative talent listed during development.
VOD and Online Streaming
As well as the Centurion label selling to major online streaming services such as Amazon and Netflix, we also have a partnership with The Pavilion Networks. Pavilion Networks operates within existing private Intranet systems supplying programming as either video on demand, VOD, or download to own, DTO. With an increasing client base Pavilion continues to look to Centurion for new and different content. Pavilion also operates in Africa where the sub-Saharan territory's infrastructure is still being built and Pavilion's access to strong local distributors enables it to use specific product for this market. In its partnerships Pavilion is able to move video content through very narrow bandwidths. The increasing number of private and charter flights varying from one passenger to hundreds has created a clear demand and market for in-flight entertainment. As we are familiar with entertainment systems on passenger flights so the need for entertainment as a companion has grown in the private flight business, and we can also supply this.
In addition to our targeted 10 theatrical releases each year, we also aim to acquire approximately 20 titles annually for direct-to-DVD distribution, adding almost 30 films to our library each year. We also produce and acquire motion pictures that are not theatrically released, but have commercial potential in video and ancillary markets. We are also able to potentially distribute successful television product on video. We will also distribute or sell directly to mass merchandisers, such as Costco Wholesale Corporation, Target Corporation, Best Buy Co. Inc.
We distribute our in-house productions and third party acquisitions to the international marketplace on a territory-by-territory basis. We license international rights for motion pictures, including in-house productions to some of the world’s leading independent distributors. For these and other in-house productions, international sales are often pre-sold to cover a significant portion of the production budget.