Modern Cinema Group Inc. is proud to announce the filing of a novel patent application designed to solve problems relating to the financing, distribution and promotion of valuable media assets (movies, television and electronic games). This patent application filed with the U.S. Patent and Trademark Office provides the system design and architecture that allows a “futures” exchange to trade and hedge media assets in an effort to keep more cash within the distribution supply chain, therefore reducing dependence on banks.
Modern Cinema Group’s patent pending approach allows for media assets (movies, TV and games) to be divided into individual “futures” contracts that can be listed on a “futures” exchange. Such an approach allows for producers to receive production financing and for platform operators (on-line, mobile, cable TV, Satellite TV, broadcasters and IPTV) to own equity interests in the content titles they distribute. Such equity interest owned by platform operators can result in significant revenues (over time) that can be used to reduce the overall cost of content acquisition. Platform operators can also contribute ad “avails” (or ad slots) within a pay-in-kind model to help lower promotional costs as well. And finally, the model allows for unprecedented hedging tools and facilities that can be used by both sides of the supply chain in the same way insurance policies protect owners of physical properties.
As for platform operators, they can purchase equity interests and distribution rights including exclusivities and even output deals buy purchasing “futures” contracts within a simple user interface. Today, purchasing equity interest in media assets is all but impossible with the exception being the world’s largest operators (who rarely purchase fractional equity interests). Such a mechanism allows all platform operators (big, medium and small) to own fractional equity interest components in valuable media assets, especially popular assets that are important to their networks.
This media futures trading model is the result of almost 10 years of research and development including experiences gained from previous attempts to trade “futures” contracts based on box office performance. Although this patent application in no way isolates box office results (as many media assets today have no box office component), the application provides points of integration between producers and distributors allowing them to derive important economic benefits. In the end, those stakeholders who have traditionally enjoyed more secured financial positions (meaning banks) are replaced by those who are often at greater risk (meaning producers and platform operators). Another way to say this is: Platform operators are aggregated by way of a “futures” exchange allowing them to act as a bank. As a result, a much healthier and more financially stable supply chain emerges that is better equipped to respond to the needs of today’s discriminating audiences.
Ross Cooper, CEO of Modern Cinema Group says, “Ever since the first patent application was filed back in 2007, people within the industry instantly understood its merits. After taking trips to India and visiting large platform operators in Asia, we received nothing but encouragement. After experiencing some speed bumps in 2010, we re-crafted the model until all of the puzzle pieces fell into place so as to provide timely solutions to an industry that still operates by way of trade shows, face-to-face meetings, phone calls and occasional parties. This patent disclosure provides the means and methods for placing major financing and distribution functions on-line, increasing efficiencies significantly. In some cases, as much as 40%.”
For those who know and understand “futures” contracts, the technical term for such offerings would be the trading of small-lot, fungible, on-exchange content licenses with standardized contract specifications. These contracts are, therefore not so much standardized commodities (such as currencies or crude oil) as much as they are derivative securities with standardized contract specifications. The actual financing component would be considered more of a (hybrid) mezzanine financing product rather than simple debt or equity financing.
This “futures” exchange trading model for media assets along with Modern Cinema Group’s content distribution systems and networks (focusing on the needs of mobile carriers) creates a new distribution infrastructure for the financing, distribution and promotion of popular media assets in a day when media distribution battles are only beginning. In the end, the winner should be the consumer. Modern Cinema Group is working to that end.
Modern Cinema Group based in Beverly Hills, founded in San Diego has spent the last three years designing and patenting new business and technology models that allow professionals within the industry to access new and powerful tools as never before.
Forward Looking Statement
This press release contains certain “forward?looking” statements, as defined in the United States Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Statements, which are not historical facts, are forward?looking statements. The Company, through its management, makes forward?looking public statements concerning it expected future operations, performance and other developments. Such forward?looking statements are necessarily estimates reflecting the Company’s best judgment based upon current information and involve a number of risks and uncertainties, and there can be no factors that could cause actual results to differ materially from those estimated by the Company. They include, but are not limited to, the Company’s ability to develop operations, the Company’s ability to consummate and complete the acquisition, the Company’s access to future capital, the successful integration of acquired companies, government regulation, managing and maintaining growth, the effect of adverse publicity, litigation, competition, sales and other factors that may be identified from time to time in the Company’s public announcements.
Modern Cinema Group Inc. Website: www.moderncinemagroup.com Tel: 310-881-5500 E-mail: ross@moderncinemagroup.com