Individual BMC Project

Submitted by Rodney Trapp

Business Model Innovation and Planning
April 5, 2014

Introduction
Cinegi is a fully digital film distribution and entertainment company that enables virtually any
venue to be a cinema. Launched in the United Kingdom in 2013, the company provides a platform
service which facilitates public screenings of filmed media in High Definition format and seeks to create
sustainable audiences for non-mainstream film and alternative content across Europe. (Cinegi website,
2014) Since Cinegi only recently launched, there is limited information about this innovative start-up
which is a spin-off company of Golant Media Ventures (GMV) - a consulting firm that designs media
products and services. The concept for this new business was developed through an 18-month pilot
project led by Creative England - a services company that supports creative ideas, talent and
businesses in film, TV, games and digital media. The core team for this development phase was Golant
Media Ventures, TwoFour - a producer of media and content and a cultural industries entrepreneur
and consultant named Ivan Sanna. They beta tested the project in 2011 and 2012 under the name of
Omigi, issued a final report in May 2012 and GMV officially launched the business in 2013. (Omigi,
2012)
This paper attempts to articulate Cinegis business model or, differently worded, the rationale
for how the company creates, delivers and captures value. (Osterwalder, 2009). I begin a review of
how the company developed its innovative platform and follow that with detailed explanation of the
nine different sections of the Business Model Canvas as it relates to this new company. I conclude by
framing the company within a particular business model pattern. It is important to note that Cinegi is
still building the infrastructure for the company. Although their website up, it is still under
construction. The company is busy building its digital content collections, refining its online platform,

negotiating licensing agreements and recruiting its initial sales force. They plan to take the platform
live within a few months. It is a really exciting time for the Cinegi team.

Product Development Phase

This section begins with an overview of the product development process which provides the
framework for understanding the business model canvas and why I believe that Cinegi is a multi-sided
business model patter.

The Pilot Process

The company developed a demonstration platform which was released in September 2011 for
beta testing with stakeholders, consumer groups and partners. The platform designers made
progressive improvements as they received feedback from the users. At that stage, the platform
consisted of a website that had a separate area for rightsholders, venues and home users. The system
features a player and mobile application with multilingual settings in English, Czech, Danish and Italian.
(Omigi, 2012). Venues and rightsholders share the ability to link content marketing together and
integrate it with Facebook.

The Platform
The genesis idea was to build a platform that would simplify the processes around digital film
content selection, packaging and programming, rights identification, etc. The mobile web side of the
platform focuses on easy discovery of content so that one can watch in the comfort of their home or in
public venues. I should note here that it appears that the home use feature will not be a part of the
initial rollout (Cinegi website, 2014).

Another feature of the platform is its community building aspects such as calendaring and
social media integration where end users can invite his or her friend to watch with them or join them
at a particular venue. (Michell 2013) The intent is for audiences to use the online and mobile assets to
discover and enjoy media content that they find compelling and to connect to people who share their
passions (Omigi, 2012).
The player which is integrated into the platform delivers High Definition quality content to
venues using standard broadband and IT equipment (a key selling proposition).
To the left is an early look at
the player prototype (Omigi,
2012).

While cinemas represent the

traditional venues for filmed
media content, this new
service seeks to tap into the
larger market of nontheatrical venues and film societies. Those who participated in the beta test commented that the
player was the most compelling aspect of the platform. (Omigi, 2012). Since a screening system for
Cinegi content can be purchased for under 3,000 in the United Kingdom, the relatively low cost
lowers the barrier to entry for some venues that would not have otherwise been able to afford high
tech projection equipment. (Cinegi case study (2014).

The online and mobile platforms allow for marketing intelligence gathering from the consumers
through profiling and social media integration. This helps the company to customize their marketing
approach to the specific interests and needs of the end user.

The mobile side of the platform

promotes easy discovery of content on tablets and mobile devices. It includes functionality which
allows users to send packages of content to their home computer in a format that is downloadable and
easy to activate. (Omigi, 2014).
Now that I have provided some background and context around Cinegi and its online platform,
now let us deconstruct the company through the use of the Business Model Canvas.

Business Model Canvas for Cinegi

Alexander Osterwalder and Yves Pigneur, authors of Business Model Generation developed the
business model canvas where they described it as "a shared language for describing, visualizing,
assessing, and changing business models." (Osterwalder, 2010). The canvas consists of nine building
blocks that help focus attention on key aspects of a business. I used the Business Model Canvas (BMC)
as a tool to understand Cinegis business model and to show how the company will meet the needs of
its potential customers. I have attached graphic of Cinegis BMC in Appendix A. Now I will review each
of the nine building blocks.

Customer Segments
First allow me to identify the customer segments for this new business venture. Upon the
completion of the 18-month pilot project, a report was issued that clearly identified the key customer
groups as being rightsholders, cinemas & venues, promoter and audiences. These four groups
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populate the far right column of the BMC. Rightsholders, those who own the filmed media content,
often struggle to find an audience for their work and to make money. These rightsholders can benefit
significantly by having easy access to a content delivery system that is affordable, generates income
and enables them to connect directly their consumers. The platform has the power to expand
distribution and penetration of traditional cinema into non-cinema locations typically used by leisure,
sports, hospitality, community, academic and cultural activities (Omigi, 2012). These venues are
struggling to keep pace with shifting consumption habits and increased competition for peoples
attention and money against games and the Internet, new platforms for accessing audiovisual content
or live events and festivals. (Omigi, 2012). Audience member are able to use to the platform as a tool
to discover content that is relevant to their lives and to socialize with their friends and other kindred
spirits through screening outings.

Value Proposition
Next, I will go to the middle column of the BMC and look at the companys value proposition, what
is the value that is being created? To answer this question I looked at how the company is positioning
itself on its website and with marketing material. It is important for the business value proposition to
add up for each customer segment and you will find them listed below (Omigi, 2012)

Rightsholders
o Reach audiences
o Make Money
Lower or eliminate costs
Increase programming
options
Fair share revenue
distribution
Increased sells opportunities
o Easy logistics

Cinemas & Venues

o Digital cinema circuit
o Distribution and logistics
aggregation
o Lower costs
o No special equipment needed

Promoters
o Access to digital cinema circuit
o Access to audiences
o Distribution and logistics
aggregation
o Cinema in many places

Audiences
o Increased access to interesting
stuff
o Convenience of more screening
locations
o Connect people with similar
interests

Key Partners
Partnerships refer to the network of supporters, funders, suppliers, co-creators, sponsors needed to
ensure that a business is able to meet its objective. (Burkett, 2013). The pilot project phase was
implemented with the help a number of key partners as mentioned at the beginning of this paper.
Funding partners for the project included MEDEA Program of the European Union and Creative
Industries iNet. Other partners included Guardian News & Media, BAFTA and Czech Association of Film
Clubs. For the current rollout phase, the company has another set of partners. They are the ones
listed in my business model canvas. The Rightsholders are the most important partner for without
them there would be no content to offer. Lean Software Factory is providing web application
development. A company called Industry is providing assistance with branding and communications.
Cinema Arts Network is helping to develop a strategic network around venues and content. Vualto
handles video application development. Studio-compliant video encoding is being handled by a
company named digit and Music Glue is helping with event marketing and ticketing.

Key Activities
The distribution business model requires a company to solve problems for its various customers
groups. In the case of Cinegi, this means:

Implementation and maintenance of the Platform

Service delivery such as distribution, logistics, marketing and reporting

Platform promotions

Audience development

Key Resources
The most important resources for this web-enabled film distribution business are its intellectual
and human resources. Cinegi partners with a number of technology companies that provide
programmers, developers and designers. The platform tools and mobile applications would definitely
be considered key resources. The platform has sourced over 200 items of content including films,
shorts, documentaries, animated features and fiction. The collection now includes the rights to work
originating from France, UK, Belgium, Netherlands, Italy, Germany and Poland. (Cinegi press release
(2014). The company is currently filling its content library with access to intellectual property from a
network of rightsholders, filmmakers and distributors. And, two co-chief executives currently make up
the staff. Below is a photo of the prototype version of the mobile application. (Omigi, 2012)

Below is an early example of the player

Customer Relationships
The robust platform was designed with customer relations in mind. Features of the platform allow
audiences to drive programming content through customization. (Golant, 2014). The companys
demand aggregation service helps Cinemas and other venues provider better service to their
customers through:

Rightsholders
Automated, online and easy
Distribution Network

Cinemas, Venues & Promoters

Automated, online and easy
Programming assistance
Public screening solutions

Audiences
Personalized services and communications
Intelligent content
Community & Social connectivity
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Channels
Since Cinegi is a digital solution, the service is being run exclusively through its web-accessed platform
and mobile web application. The company will also rely on traditional print advertising and word-ofmouth endorsement, especially from its key partners.

Cost Structure
Cinegi is a more cost driven business, but it also offers creates value for its customer segments. As a
web-accessed downloadable platform solution, Cinegi offers greater efficiency through a scalable
solution and aggregation of large numbers of small value transactions from multiple venues. This
platform solution lowers cost and removes the complexity that has been a barrier to wider distribution.
The primary costs structure for Cinegi is as follows:
Maintenance of Platform

computer equipment
wages/salaries
utilities
Insurances
Consulting Fees

Content Acquisition & Promotions

communication and postage
advertising/marketing
professional fees (legal, accounting)
licenses
Because there are not significant variable costs for each customer added, the company can quickly
achieve economies of scale to expand the business.

Revenue Streams
The primary revenue streams are licensing fees, ticket sales to screenings, advertising on the platform,
sponsorships and cross-selling to related products and services.
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Cinegi: A Multi-Sided Platform Pattern

Cinegi enables consumers, rightsholders, promoters and cinemas and non-theatrical venues to
connect to each other through a suite of services which promote, program, monetize and deliver
filmed media content (Omigi, 2012). The company is a good example of a multi-sided platform
business model for it seeks to connect four categories of customers (Rightsholders, Cinemas & Venues,
Promoters and Audiences) as well as offer different solutions for each. The chart below shows the
multi-sided platform pattern which was modified and streamlined from the business model canvas
described earlier. I have also included it as Appendix B at the end of this paper.

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Herein we see the four distinct customer groups and the relationships they have with revenue
streams and the value proposition. The colors assigned to each of the customer groups are intended
to show how value is created and revenue is generated from the connection and interplay of the three
blocks of the pattern. The graph clearly shows that value is created for each customer segment and
revenue is generated from each customer segment. It also shows how the Key Activities and Key
Resources help create value for the customers as well.
This concludes the presentation of the Cinegi, its Business Model Canvas and its Multi-sided
Business Model Pattern.

References
Berry, M (2013) Project: Miracle Theatre Company, Native: Magazine of the Digital R&D Fund for the Arts.
Available at http://native.artsdigitalrnd.org.uk/projects/miracle-theatre-company/#making-

connections-with-other-organisations-working-in-similar-ways (Accessed on 25/3/2014).

Burkett, I (2013). Using The Business Model Canvas for Social Enterprise Design,
http://www.mbs.edu/facultyresearch/apsilc/Documents/Business%20Model%20for%20SE%20DesignBurkett.pdf (Accessed on 3/4/2014).
Cinegi blog (2013) Available at http://cinegi.wordpress.com/ (Accessed on 2/4/2014).
Cinegi case study (2014) Golant Media Adventures website. Available at
http://golantmediaventures.com/advisory-services/case-studies/cinegi/ (Accessed on 4/4/2014).
Cinegi Sales Agent Profile Flyer (2014) Available at

http://gallery.mailchimp.com/64a15eaa1a/files/Cinegi_Sales_Agents_v3.pdf (Accessed on 25/3/2014).

Cinegi press release (2014) Available at http://cinegi.com/cinegi-and-the-uks-cinema-arts-networkcan-announce-strategic-partnership/ (Accessed on 2/4/2014)
Cinegi website (2014). Available at http://www.strikingly.com/cinegi (Accessed in 26/3/2104).
Golant Media Ventures website (2014) http://golantmediaventures.com/ventures/cinegi-filmdistribution/ (Accessed on 2/4/2014).

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Mitchell, W (2013) Cinegi to launch UK digital distribution service. Screen Daily, 21 June, 2013.
Available at http://www.screendaily.com/news/digital/cinegi-to-launch-uk-digital-distributionservice/5057627.article (Accessed on 3/4/2014).
Omigi Final Report (2012) Smart Entertainment / Interesting Stuff. Available at
http://ivansanna3000.files.wordpress.com/2013/05/smart-entertainment-interesting-stuff-finalreport-may-2012.pdf (Accessed on 27/3/2014).
Osterwalder, A & Pigneur, Y. (2010) Business Model Generation, John Wiley & Sons, Inc.

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Appendix A

Designed for:

The Business Model Canvas

Key partners

Designed by:

CINEGI

Key Activities
Platform/Mobile Web/Player

Rightsholders
(Digital film content)

Lean Software Factory

(web application development)

Industry
(branding and communications)

Reach audiences
Make money
Lower or eliminate costs
Increase programming options
fair share revenue allocation
Increased sells opportunities
Easy logistics

Cinemas, & Venues

Digital cinema circuit
Distribution and logistics
aggregation
Lower costs
No special equipment needed

Cinema Arts Network

(strategic network - venues and
content)

Vualto

Key Resources

(video application development)

Digit
(studio-compliant video encoding)

Music Glue
(event marketing and ticketing)

Cost Structure

Platform w/ Player & Mobile web

Digital Film Content
Licensing Rights
Distribution Network
Technology Partners
Co-Chief Executives

Maintenance of Platform
computer equipment
wages/salaries
utilities
Insurances
Consulting Fees

Access to digital cinema circuit

Access to audiences
Distribution and logistics
aggregation
Cinema in many places

Audiences
Increased access to interesting stuff
Convenience of more screening
locations
Connect with people with similar
interests

www.businessmodelgeneration.com

Content Acquisition & Promotions

communication and postage
advertising/marketing
professional fees
(legal, accounting)
licenses

April
No.

Iteration:

Year

2014

First

Customer Segments

Automated, online and easy

Distribution Network

Rightsholders owners of film

Cinemas, Venues & Promoters

content

Automated, online and easy

Programming assistance
Public screening solutions

Cinemas & Venues - screening

Audiences

Promoters- events and related

Personalized services and

communications
Intelligent content
Community & Social connectivity

locations

services

Audiences event or screening

attendees

Channels

Promoters

Cinegi is a of more cost driven business, but it also creates value

Customer Relationships

Month

Rightsholders

Rightsholders

Platform Promotions
Audience Development

Rodney Trapp

Value Proposition

Service Delivery distribution,

logistics, marketing, reporting

Day

On:

Web-accessed platform
Mobile web application
Word-of-mouth
Print advertising

Revenue Streams
Licensing fees

Sponsorships

Screening ticket sales (Dynamic Pricing)

Cross-selling to related products and

services

Advertising

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