Chris McGurk

Okay, I admit that the headline of this post is pure click bait. But did you really want to read another story headlined “Chris McGurk Named Cinedigm CEO”? Truth is I wasn’t in Cinedigm’s board room when they offered Chris McGurk their Chairman and CEO positions, and thus I have no “inside” information. However, from the moment Cinedigm announced McGurk as their new CEO earlier this week my inbox has been flooded with emails from those asking about my own thoughts on the news.

Rather than take the usual Internet approach of writing up an analytical post before the ink was dry on Cinedigm’s press release, I chose gather my thoughts about the news for a couple of days. While it may seem at first that McGurk is an odd choice to head a digital cinema deployment entity, upon reflection one can see the benefits Cinedigm gains with the hire.

As the press release trumpeting the hire so diligently pointed out, McGurk has a ton of film industry experience. Every story reporting McGurk’s new role at Cinedigm recounted his lengthy professional history. Still I feel compelled to do it here. I first became aware of McGurk in the early 1990′s while working as an intern at Walt Disney Studios. At the time McGurk was President of the Walt Disney Motion Picture Group and it was hard to find anyone who had a bad word to say about him. Quite the opposite in fact. McGurk’s tenure at Disney from 1988 to 1996 included a stint as Chief Financial Officer on the studio side, among several other roles. He held similar senior titles (President and Chief Operating Officer) during his three year stay at Universal Pictures from 1996 to 1999.

McGurk is probably most associated with his last two companies Metro-Goldwyn-Mayer, where he was Vice Chairman and COO from 1999 to 2005, as well as Overture Films, where he served as founder and Chief Executive Officer from 2006 to 2010. This may have more to do with the current state of those companies than McGurk’s actual achievements, but more on that later.

McGurk comes to Cinedigm armed with numerous relationships at all the Hollywood studios Cinedigm has signed virtual print fee (VPF) agreements with. It is unlikely he will get any extensions for Cinedigm’s VPF rollout period which comes to an end in a little over a year. Even so, having someone in the corner office with friends in high places at each studio certainly couldn’t hurt.

In addition, having spent more than 20 years in senior management at four different studios means McGurk knows a thing or two about content. As McGurk himself pointed out in media interviews after his hiring was announced, there is a realistic opportunity to leverage the 6,000 plus digital screens Cinedigm oversees to distribute content. He told The Wrap:

“The neat thing for me is that even though it’s a service business, I’ll also keep my hand in the content business…They’re turning multiplexes into networked programming venues. It’s a great thing for exhibitors, now there are fewer and fewer films being distributed by majors and others. This is a way to fill up a lot of that space that is going to exist with fewer movies.”

In speaking with the Los Angeles Times, he said:

“We’re going to hopefully provide a whole new business model to exhibitors.”

McGurk’s enthusiasm for independent content offerings are refreshing, if not contagious. He’ll quickly learn (and probably already knows) that though the studios are making fewer movies, they still want their films booked on every multiplex screen, especially during prime showtimes. So, no matter what alternative distribution schemes McGurk and Cinedigm conjure up, they’ll still have to contend with the studios supplying the VPFs that subsidize the digital cinema equipment which enables flexibility in programming.

Another thought is that the installation of a senior executive such as McGurk might make Cinedigm far more attractive to potential investors and/or buyers. Don’t forget, one of Cinedigm’s primary owners is the private equity firm Sageview Capital. Sageview’s founder Ned Gilhuly was quoted in the press release announcing McGurk’s hire and the company’s Adam Mizel acted as CEO for the latter half of 2010. Stakeholders such as Sageview rightly want to see a return on their investment and one way to do that (besides the Payment In Kind and warrants they presently hold) is through a liquidation event, such as a public offering or sale. As Cinedigm is already a public company, a sale is a more likely scenario. Though this is all pure speculation on my part.

At the very least, McGurk is no stranger to balance sheets and high-finance. Remember that bit about his CFO role over at Disney? In McGurk Sageview has found an executive with experience running the finances of a public company. That’s probably a smart move since Zacks Investment Research just listed Cinedigm as one of five companies in the application software industry with the highest debt-to-capital ratio.

Now, to address all those who left negative comments about McGurk’s hiring on websites such as Deadline. The common refrain through the mostly anonymous criticism was that companies McGurk has led tend to “fall apart”. I can only assume such accusations refer to both MGM and Overture Films. While defending McGurk is not something I can or should do, I’m not quite sure he should be faulted for MGM’s current financial woes given that on his watch the company was sold for USD $5 billion. The failure of Overture is also hard to pin solely on McGurk since the company’s main investor, Liberty Media’s John Malone, never followed through on fully backing the venture and has since dumped most of his movie business assets.

That brings me back to all those emails I received this past week about Cinedigm and McGurk. I found it interesting that not once did anybody ask why McGurk would want to run a company operating in the fiercely competitive and unsettled digital cinema market. Maybe everyone just thought he needed a job and Cinedigm happened to be hiring. Yet his answer to this question, which appeared in the Los Angeles Times, might be indicative of what Cinedigm believes McGurk brings to the company; experienced leadership, adept at reading the industry and predicting its future direction:

“I saw that money was beginning to come back to entertainment, but [investors] didn’t want to invest in traditional production or releasing. Investors are now focused on new media and digital businesses. This is that kind of opportunity.”

Ever since March of 2008 when the National Association of Theatre Owners (NATO) announced that they would be holding their own trade show in 2011 just before NAB the question has been, who will the organization get to put the event together.  Speculation was that Bob and Andrew Sunshine who have been producing NATO’s official trade show, ShoWest, since 2001.   After all, the Sunshine’s, who originally started out as the Sunshine Group Worldwide before being sold to Nielsen, have tons of experience organizing annual exhibitor conferences such as ShowEast, Cinema Expo and CineAsia.

Such a guess would not have been far off given that earlier today NATO announced they had hired Mitch Neuhauser to be the Show Manager of their official trade show, the first of which will be held in March of 2011.  Presently, Neuhauser works with the Sunshines as Vice President of Nielsen Film Group.  He is also already involved with NATO in some capacity as the assistant executive director of NATO of New York.

If you’ve ever been to any of the four trade shows Nielsen holds for exhibitors and distributors each year than you definitely know who Neuhauser is.  He is a ubiquitous presence at the events and you no doubt have seen him standing before a packed screening of the latest Hollywood studio offering warning the audience that if anyone is caught using a cell phone they will be summarily taken from the theatre and shot.  He’s also warned attendees that a similar fate awaits anyone caught pirating the film.  Of course, it wouldn’t be a Nielsen trade show if Neuhauser didn’t ask everyone in the theatre to hold the hand of the person seated next to them and not let go until the movie ends.

In all seriousness though, Neuhauser is the perfect man for the job.  He’s got 28 years of experience running conventions such as the one NATO wants to put on and he is adored by everyone whose ever worked with him.  The press release announcing the hire is filled with the heads of studios and exhibitors praising Neuhauser’s work.  Bruce Snyder, Twentieth Century Fox’s head of domestic distribution may have put it best with his quote:

“That’s a no brainer, get Mitch Neuhauser to run the show for NATO and you can’t go wrong. He gets two thumbs up from this office.”

Of course, Neuhauser was also quoted in the release, stating:

“I truly look forward to working with NATO and its members and the rest of the motion picture industry to produce the very best convention imaginable. Personally, I owe a debt of deep gratitude to Bob Sunshine and The Nielsen Film Group for their tremendous support over the past 28 years and I leave on good terms and with great pride in what we have accomplished together.”
One of the key phrases in what Neuhauser said might be “good terms”, for he will begin his new role at NATO on September 14th, just one month before this year’s ShowEast in Orlando.  Although, let’s face it, given that the Sunshine’s and Nielsen are always in the throws of putting on the next trade show, would there really ever have been a good time for Neuhauser to leave?  (Answer: Probably not.)

Lee Roy Mitchell, the chairman of both NATO as well as Cinemark, made mention that when NATO decided to hold their own trade show, they wanted to make sure they could benefit from all the experience gained from their partnership with ShoWest, which will remain the organization’s official convention through 2010.  Part of his statement included the following:

“We are confident we have taken an important first step by hiring a man who has been so critical to that success.”

This could be the standard praiseworthy line one might expect in a press release.  Or maybe Mitchell is signaling that Neuhauser will not be the last hire, just the first, and that additional hires will need to have played a similar role in ShoWest’s success (i.e. Bob and Andrew Sunshine).  We’ll let you decide.

Industry vet Rob Hummel—who most recently served as president of digital cinema at Dalsa—has been named CEO of Hollywood-based postproduction house Post Logic Studios, a division of India’s Prime Focus.

Post Logic’s Larry Birstock is vacating this position to move into an international role within the organization as president of Prime Focus Global Integration.
“Rob’s deep industry experience and long-standing relationships with Hollywood studios will be an enormous asset to Post Logic Studios and the Prime Focus companies,” said Namit Malhotra, founder and global CEO, Prime Focus, in a released statement. “We’re also thrilled that Larry has moved into a strategic global role within Prime Focus to help us more tightly integrate sales and operations across facilities in India, the UK, Canada and the US.”

Prior to his tenure with Dalsa, Hummel served as SVP, production technology at Warner Bros. There, he oversaw digital restoration work on such films as “Gone With The Wind” and “The Wizard of Oz.” Before joining Warner Bros., he held positions including SVP, digital cinema for Sony Corp.; EVP, digital development for Technicolor, and head of DreamWorks Animation Technology, during which time he oversaw the building of the company’s animation technology infrastructure. Hummel also held positions in postproduction, Imagineering, and TV animation at Walt Disney Studios.

Crediting their “aggressive commitment to explore and implement the latest technological advances in production and industry standards” Warner Bros. promoted Wendy Aylsworth to Senior Vice President, Warner Bros. Technical Operations. Aylsworth, who has been with the studio since 1994, previously served as Vice President, Technology, Warner Bros. Technical Operations.

Many in the industry are familiar with Aylsworth through her work as Engineering Vice President of the Society of Motion Picture and Television Engineers. Over the past year she was instrumental in reorganizing the Technology Committees to better service emerging technologies such as digital cinema. In fact, before she took over as Engineer Vice President she was Chair of SMPTE’s D-Cinema Technology Committee, a group that created the first 24 standards for D-Cinema. Like many executives who work in standards bodies, Aylsworth participates in other standards activity, including those run by ATSC and CableLabs. Most recently she announced the creation of the 3-D Home Display Formats Task Force within SMPTE, a group that will help set standards for mastering stereoscopic content for home viewing.

Aylsworth’s new position within Warner Bros. is not unlike her old one in that she will be overseeing a group that is responsible for pushing the studio’s (as well as the industry’s) agenda in both national and international standards organizations. In addition, she will continue to head up the group within Warner Bros. responsible for reviewing and implementing emerging technologies in the content production and distribution space. In the press release announcing the promotion Chuck Dages, Executive Vice President, Emerging Technologies, Warner Bros. Home Entertainment Group was quoted reiterating Aylsworth’s background and rising stature within the industry:

“Wendy has taken a lead position not only for our studio but in the external organizations dedicated to creating new standards for such exciting innovations as digital cinema and 3-D viewing for the home. This promotion recognizes not only her achievements to date but the increasing importance of her efforts to our studio and our industry.”

While Aylsworth has built a strong reputation for herself in the entertainment industry, she began her professional career in technology working in the aerospace industry at companies such as Lockheed. She earned her MS/MBA in Managerial Sciences and Strategic Planning fro the University of Southern California and holds a BS in computer Sciences from the University of Michigan.

Pan-European digital cinema integrator XDC has poached the Benelux head of pan-European cinema advertiser Screenvision to head up its virtual print fee effort as the company get a 7.5m euro cash injection. Serge Plasch is replacing Laurent Minguet as head and will go head to head with the likes of Arts Alliance Media in promoting digital cinema all over Europe. From the press release:

Serge Plasch (40), has been Managing Director of Screenvision Benelux since 2001 where he reinforced the leadership of that major advertising saleshouse for the Cinema Industry. Speaking fluently four languages, English, French, Dutch, German, he will contribute to strengthen XDC position in the large but fragmented European Cinema market. Enthusiast over this new opportunity, the new Managing Director & CEO says : “After years of talks and trials, large DC deployment is starting. All market players are convinced that Cinema will be digitized and that will improve the business model of the industry, for the good of the audience. XDC has proven its skills to operate DC screens through a full range of services and technologies. XDC is the first DC Content lab in Europe and it has built the largest early stage DC network exceeding 300 systems for leading cinema groups. I am also very pleased to work closely with a very motivated team and in particular with Bernard Collard.

Though tucked away at the bottom of the press release, but in many ways no less important, long-term consultant to XDC John Burchill Hughes has been appointed “special advisor to the Board of Directors and member of the management board for content related matters.”

In an intriguingly worded paragraph, the press release talk about how “XDC is currently finalizing some negotiations relating to the co-financing of DC deployment by film distributors through dedicated Virtual Print Fees (“VPF”) agreements.” Notice the use of the term ‘co-financing’. This serves to emphasize that XDC may not have abandoned completely its previous lease-fee based deployment model, though it does not rely as strongly on the VPF proportion of the contribution as other operators might have. With talks in the industry being that exhibitors are being asked for a 30 per cent contribution in deals such as Arts Alliance’s VPF deal, XDC could be in a good position, having never promised exhibitors that they themselves would have to pick up a significant part of th digital tab.

Next up we expect a major announcement from XDC abut its future involvement in the alternative content field, possible before the end of the year.

Landmark Theatres’ chief operating officer Ted Mundorff has been promoted to the post of CEO, putting him in charge of the 58 properties in 28 US markets. From Variety article:

Former CEO Bill Banowsky will continue to develop business opportunities for Landmark.

For the past year, Mundorff has helped oversee Landmark’s expansion, including the opening of flagship theater, the Landmark, on the Westside. All told, the circuit has increased its screen count by 19% in the past 12 months.

Mundorff was instrumental in the opening last month of Landmark’s newest theater in Baltimore’s Inner Harbor. Slated to open in December is the Landmark Greenwood Village in the Tech Center of Denver.

No word on digital, which Landmark has been growing in their own unique way for the past few years, but Mundorff did get in place a big media deal with Samsung.

Deluxe and Sony have both announced senior management appointments in their digital cinema divisions.

Deluxe has appointed former Loews Cineplex VP John Wolski to look after the exhibitor side of their digital cinema operation.

From the press release:

Deluxe Digital Cinema, a unit of Deluxe Entertainment Services Group Inc., has announced that John Wolski has joined as its new Vice President of Exhibitor Services. Wolski will be leading Deluxe’s relationship management with the exhibition community, helping to build a national satellite network, and representing Deluxe at major industry events and standards bodies.

What is most interesting about this is the implicit admission that Deluxe is now seriously exploring satellite distribution for their digital cinema films. This has many interesting implications, both for Deluxe, its studio clients and the US exhibitors as it would be the first non-integrator distributing DCPs to cinemas electronically, apart from Microspace’s limited distribution trials.

Sony has announced that SDDS and SBPE veteran Gary Johns is re-joining Sony as VP of its digital cinema systems division, having been a consultant for the company for the past four years.

From the press release:

Sony’s Digital Cinema Systems Division, which has sales, marketing and engineering teams across the country, was developed to market Sony’s 4K SXRD digital cinema projection system, including the projector, media block, storage and screen management systems, to motion picture exhibitors. These technologies have continually gained marketplace acceptance, including recent announcements by Landmark Theatres and Muvico Entertainment that they would be equipping their screens across the country with Sony SXRD 4K digital cinema projection systems.

The hope must be that Johns can use the experience from SDDS to convince exhibitors that Sony is serious about a higher quality cinema technology winning the day and that unlike SDDS they are in it till the end this time.

Industry veteran Larry Jacobson is joining Digiserve as President this month, leaving Kansas and his role as President of the Entertainment Division of where-are-they-now server manufacturer QuVIS. For those of you who have not heard of Digiserve (full name: Digital Entertainment Services, LLC.) the press release informs us that:

Formed in 2006, Digiserve operates an electronic distribution digital network for the motion picture industry and its suppliers. The Digeserv platform of services delivers digital content for studios, exhibitors, alternative content providers, advertisers and other digital purveyors. In its core business, Digeserv offers a suite of services that enables theatres around the world to convert from analog 35 mm film projection systems to digital delivery at minimal cost with maximum efficiency. Digital content includes motion pictures, pre-movie programming, alternative entertainment and advertising, all of which may be received by exhibitors through the Digeserv delivery network.

So it would seem that they are effectively an AccessIT without any announced virtual print fee deals. Jacobson thus has his job cut out for himself in positioning Digiserve in a space where larger companies such as Technicolor are struggling to achieve lift-off. His first action should be to change Digiserve’s website, which is truly dreadfully amateurish, with its strips of 35mm-film graphics and popcorn buckets, presumably there so that you understand that they are in the cinema business. Digiserve may have something useful to contribute in this space, though as every cinema manager knows, poor presentation will not entice potential customers.

The trade body of the United Kingdom’s cinema industry has appointed former government film deputy secretary Phil Clapp as its new chief executive. Clapp thus replaces John Wilkinson, who stood down earlier this year (or was stood down?) , as head of the Cinema Exhibitors’ Association (CEA). Though Wilkinson remains head of the European Digital Cinema Forum, so the two will have to get on when it comes to UK-European digital cinema issues. What little information there is about the appointment comes from an article in the Hollywood Reporter, which tells us that Clapp, “joins from the Department for Culture, Media and Sport [DCMS], where he most recently was deputy director, responsible for policy on the creative industries, including film.”

Given that digital cinema is the greatest challenge facing the UK exhibition industry, this is not encouraging as the DCMS’s interest in digital cinema has been measured to date, compared to the Department of trade and Industry, which for many years encouraged digital cinema meetings while a new DCMS representative would show up for each meeting. However, this is not a reflection on Clapp, who must have something going for him to have qualified for the post at CEA. The CEA itself has always been the poorer cousin of its US counterpart NATO, unlike whom it does not even have a website, only these contact details. Most interesting to watch will be the dynamics between Clapp/CEA and UK Film Council/Peter Buckingham, that were responsible for the 240 screen-strong Digital Screen Network (DSN) that has made the UK the poster child of government sponsored digital cinema deployments in Europe.