HOLLYWOOD, Calif., March 13, 2004 (PRIMEZONE) -- CinemaElectric, Inc. (OTCBB:CINM) estimates the outlook for CinemaElectric's revenue based on the current trends within the Wireless Services sector.
The company is a major supplier of next-generation mobile entertainment services in the form of Mobile Video and Graphics and is currently in early revenue with distribution in the USA, Europe, Asia, Latin America and Australia. The Company is launching their first mobile multimedia applications at the CTIA Wireless 2004 conference this month in Atlanta, Georgia.
CinemaElectric's Market
Multimedia Messaging Service (MMS) implementation is a key factor in growth, as wireless operators encourage users to trade photographs, images and video via this rapidly growing technology. Although in-depth sales and projection data is not available for this new medium, the current model of distribution is similar to ringtone distribution to mobile phones. According to Reuters, global ringtone royalties in 2002 were between USD $750 million to $1 billion paid to music publishers, off gross sales of $4 billion.
Based on usage in advanced markets like Japan and South Korea, it is assumed that graphics and video usage patterns will exceed those of ringtones as the market matures. For example, Japanese users download color graphics and motion pictures on a daily or weekly basis, where as active ringtone users download and change their ringtone every 30 to 45 days. CinemaElectric revenue model calls for it to receive a royalty for each color graphic and motion picture download.
Market Potential
-- Currently, there are more than 1.3 billion mobile phone
subscribers globally.
-- 520 million mobile phones were sold in 2003 (Gardner), a 20.5%
growth over 2002. Expected sales in 2004: 580 million units.
-- According to EMC, 100 million, of all mobile phone users can
access the kind of multimedia product CinemaElectric produces.
These "mobile multimedia subscribers" grew at a rate of 14%
in the six months prior to January 1st, 2004.
-- The consulting company, Ovum, says that video will be a priority
for mobile operators in 2004. Dario Betti, Senior Analyst with
Ovum says, "Mobile video is set to become a `fourth screen'.
After television, cinema and the PC, a new platform is taking
Shape."
CinemaElectric's Potential
Based on the continued growth of color multimedia mobile phone sales, and the continuing advancement of billing and delivery technology within the mobile industry, the Company makes the following estimates:
The Company anticipates total mobile multimedia (graphics, video and audio files) revenues (including content and data fees) to reach $300 million at the end of 2004. Out of that, 15% of the revenues ($45m) are expected to be content fees for services such as 3rd party audio, videos and graphics, of which approximately 20% of that amount will be paid to content owners ($9m). The Company expects to capture up to 6% of this market with its video, graphics and application services, despite the expectation that the majority of revenue will be dedicated to audio downloads (audio ringers).
Mobile multimedia revenues for 2005 are anticipated to pass the one billion dollar mark catering to an audience of 175m global users. The Company anticipates capturing up to 7% of this market based on the leverage of its distribution network to attract new popular brands, and the acquisition of companies with complementary technology and business models, provided the Company can raise the required expansion capital.
The Company anticipates the market will grow by the end of 2006 to more than 250 million "mobile multimedia subscribers" and that graphics, motion MMS and video will dominate the industry. The Company anticipates total mobile multimedia (graphics, video and audio files) revenues in 2006 to reach $2.8 billion as usage becomes commonplace and sponsored mobile multimedia dominates over the pay-per-download model. Out of a total global market of $2.1b, it is anticipated that 35% ($735m) will be content services revenue, of which approximately 20% will be paid to content owners ($147m). The Company anticipates capturing up to 8% of this market in 2006.
These projections are dependent on the company raising significant operating capital in 2004 for marketing and sales expenses, expanded production, brand licensing, and acquisitions.
ABOUT CINEMAELECTRIC: CinemaElectric is a wireless services company and a leading provider of multimedia entertainment for mobile devices. The Hollywood-based studio's product is currently distributed in 35 countries in five continents and is believed to own the world's largest library of formatted multimedia for mobile devices.
Website: http://www.CinemaElectric.com
"SAFE HARBOR" STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Statements in this press release relating to plans, strategies, economic performance and trends, projections of results of specific activities or investments, and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, risk factors inherent in doing business. Forward-looking statements may be identified by terms such as "may," "will," "should," "could," "expects," "plans," "intends," "anticipates," "believes," "estimates," "predicts," "forecasts," "potential," or "continue," or similar terms or the negative of these terms. Although the company's management believes that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. The company has no obligation to update these forward-looking statements.