WONDERFILM

Creating the Next Big Global Film Franchise

This profile is part of a paid investor education campaign.*

Overview

The WONDERFILM Media Corporation (TSXV:WNDR,OTC:WDRFF,FRA:Y25) is an entertainment company focused on developing, financing and producing in-demand films and TV series. The company has offices in Beverly Hills, US, Vancouver, Canada and Seoul, South Korea.

WONDERFILM creates a predictable revenue stream by pre-selling its films before filming begins and is setting up a global in-house distribution network to keep profits within the company. The company will select low-risk films with forecastable and consistent return profiles before they commit to producing the film. The presale funds are then combined with other funding and incentives to form the production.

In its efforts to become a vertically-integrated entertainment company, WONDERFILM has established multiple partnerships to develop a variety of quality films and TV series. The company also aims to create other media platforms, such as esports. To this aim, the company has formed WONDERFILM Global Sales Limited (WGSL), a new film, television and media foreign sales and distribution company, with 101 Films Limited. The joint venture company is expected to have immediate impacts upon the company’s revenue as WONDERFILM brings its distribution in-house, eliminating third-party fees.

Hollywood has established itself as the center of the entertainment industry, but as technology advances and the internet penetrates into areas where it has been limited, new markets are opening up in Asia-Pacific. As a result, the global media and entertainment market is expected to grow from $1.9 trillion in 2017 to $2.4 trillion in 2022 at a CAGR of 4.4 percent, according to report by PwC.

Some of the company’s upcoming films include “Primal” starring Nicolas Cage, “Moose” starring John Travolta and “Disturbing the Peace” starring Guy Pearce. The company has also teamed up with Anthony Zuiker, Jason Hervey and Craig Piligian to create a TV series based on the “Merchant of Death,” a true story based on Viktor Bout, one of the world’s most notorious arms dealers. WONDERFILM also has relationships with star actors and actresses, including Bruce Willis, Michelle Pfeiffer, Sharon Stone and Sylvester Stallone.

WONDERFILM’s success can be attributed to its management team. All of the company’s founding producers have extensive experience in the industry in minimizing the risks involved with producing a feature film. CEO Kirk Shaw has been responsible for producing over 230 films, including “The Hurt Locker” and seven TV series. WONDERFILM’s management team is notably invested in the company, holding approximately 60 percent of the company’s shares on an incentivized basis.

WONDERFILM Company Highlights

  • Offices are strategically located in Beverly Hills, Vancouver and Seoul.
  • Pre-selling films before they’re shot creates a predictable revenue stream.
  • Developing in-house global distribution network to keep profits within the company.
  • Holds a 50.1 percent interest in a joint venture company expected to facilitate WONDERFILM’s in-house global sales and distribution.
  • Acquired a video-on-demand movie service, a branding company and a social media service provider, adding additional verticals and revenue streams.
  • Video-on-demand service currently reaches 50 million homes in the US.
  • Global media and entertainment market is expected to grow from $1.9 trillion in 2017 to $2.4 trillion in 2022 at a CAGR of 4.4 percent.
  • Celebrity relationships with multiple well-known actors and actresses.
  • CEO Kirk Shaw has produced over 230 films and seven TV series.
  • Management notably holds approximately 60 percent of the company’s shares.

The Global Media and Entertainment Market

The global media and entertainment market is expected to grow at a CAGR of 4.4 percent over a five-year forecast period ending in 2022. The market is expected to grow from US$1.9 trillion in 2017 to US$2.4 trillion in 2022. In 2018 alone, PwC is expecting the filmed entertainment market to reach $113.1 billion.

Revenue generation is limited as high piracy rates and low profit margins due to online streaming are still an issue. However, new cybersecurity laws and the increased efforts to stop piracy are expected to reduce losses for media and entertainment companies. The emergence of subscription video on demand and other stay at home incentives have pulled some of the attention away from movie theatres, but the demand for virtual reality and 3D films has been providing incentives for people to venture out of their homes.

The rise in technology has also led to new emerging markets. The growing demand for Chinese, Japanese, South Korean and Indian movies will be driving the market forward rather than the already established market in Hollywood.

The Role of a Producer

A producer takes on a variety of roles during the production of a TV show or a movie. Essentially, the producer handles the risk of the project as it moves forward. Producers fulfill two important roles in a film, but can be involved in other aspects of the production, including the technical and creative aspects of each project.

One thing that they focus on is the development on the film. Before a production can start, the producer is responsible for finding an original screenplay, novel or the life story of a person that’s interesting that can be adapted into a TV show or movie. Once they’ve settled on the story, they enter into negotiations with the owner of the content with the aim of acquiring the rights to it.

The second thing producers are responsible for is securing financing for the TV show or film. Once the rights have been acquired, the producer pitches the project to movie studios and other interested parties in order to secure financing. Once this is done, the producer then manages the finances throughout the entire project to make sure everything is delivered on time and within budget. Lastly, producers are in charge of the project’s distribution once it’s ready to be viewed.

WONDERFILM’S Business Model

As the company look for new films to produce, WONDERFILM is dedicated to picking low-risk projects with forecastable and consistent return profiles. After committing to the project, the company pre-sells its films around the globe to make sure the company is generating a quantifiable maximum and minimum value prior to filming. The presale funds are then combined with funds and incentives, like tax credits, to form the production’s budget. WONDERFILM has allotted a total of $90 million in production budgets for its projects in 2018 and 2019.

Once the film is ready, it is distributed and includes a revenue split with the distribution company once the sales exceed the minimum pre-sold amount. Most distribution companies charge fees for their services and keep half of the profits as part of their agreements. However, to capitalize on the company’s profitability, WONDERFILM will establish key subsidiaries around the world to create a network of distribution channels that will invest into the new production projects and sell completed content.

wonderfilm business model

WONDERFILM’S Expansion

South Korea

As part of the company’s expansion plan, WONDERFILM established a subsidiary in Seoul, South Korea in July 2018. The subsidiary owns and controls the Korean and Vietnamese television, film and media release rights to WONDERFILM’s future and current productions.

“Wonderfilm Korea, is very much the first star in a constellation of similar opportunities Wonderfilm is forging around the globe,” said WONDERFILM CEO Kirk Shaw. “This unique global sales strategy is just one of the many ways the company is adapting to and leading changes in the entertainment industry. Similar subsidiary discussions are now being formalized in the UK with advanced discussions on going with China, Brazil and Germany. Simply put, rather than looking at distribution as a one-way delivery, Wonderfilm is pioneering a new cooperative system in which the company partners with local experts to blend creative energies and to support mutual production as well as gain direct creative and financial investment into the company’s production slate.”

The subsidiary has strategically aligned itself with Trueever Co. Ltd. CEO Jong Hong Park to financially participate in mutually approved WONDERFILM productions, predominantly on TV shows and movies featuring South Korean directors and actors when shooting in Korea. The agreement aligns with the company’s long-term strategy of developing a global branded distribution and film investment network.

Feature Films

WONDERFILM’s revenue predominantly comes from its feature films. As such, the company is perpetually exploring opportunities in the form of new films to add to its upcoming releases. Currently, WONDERFILM has 17 movies that are scheduled to be produced. Nine of those films are in production and an additional 16 films have been given the green light to commence production in the near term. Some of the company’s upcoming films include “Primal” starring Nicolas Cage, “Moose” starring John Travolta and “Disturbing the Peace” starring Guy Pearce.

WONDERFILM has also worked with well-known actors and actresses in the industry, including John Travolta, Charlize Theron, Bruce Willis, Michelle Pfeiffer and Anthony Hopkins, among others.

wonderfilm primal movie poster

WONDERFILM’S Strategic Partnerships and Acquisitions

WONDERFILM is always in the process of acquiring the rights to scripts and films in order to bring a variety of entertainment options to its viewers and to continue adding value for the company’s shareholders.

WeFilmchain Alliance

In July 2018, WONDERFILM formed a strategic alliance with WeFilmchain Holdings Corp., a developer of a blockchain platform that allows the public to become shareholders in the production and distribution of movies, TV and online content. The platform ensures that the content creator teams and shareholders are transparent and accountable for their actions throughout the funding and production process. WONDERFILM will be utilizing WeFilmchain’s platform to fund mutually acceptable film and TV projects.

12 Pictures Acquisition

In August 2018, WONDERFILM entered into an agreement to acquire Cypress Entertainment Corp., a private company that holds the rights to participate in a minimum of 12 movie titles in over two years.

Sea Trial Picture Acquisition

In August 2018, WONDERFILM entered into an agreement with an arm’s length producer to acquire the rights in and to the original screenplay for “Sea Trial,” which was written by Frank de Felitta for C$100,000.

Merchant of Death Acquisition

In September 2018, WONDERFILM acquired the bestselling book “Merchant of Death” written by Pulitzer Prize winners Stephen Braun and Douglas Farah to develop a TV series. The company has teamed up with the creator of the CSI franchise, Anthony Zuiker, Jason Hervey and Craig Piligian from Pilgrim Studios, a Lionsgate (NYSE:LGF.A) company. “Merchant of Death” is a true story based on the investigation into Viktor Bout, one of the world’s most notorious arms dealers. The producers are currently meeting with showrunners and networks.

Award-winning producer Jeff Bowler will be serving as Executive Producer on the film. Joining him will be Anthony Zuiker, the creator and producer of the CSI franchise, which ran for 15 seasons and included multiple franchise additions. Jason Hervey was the previous producer for “World Championship Wrestling” (WCW) and “Total Nonstop Action Wrestling” (TNA), among many more reality TV shows. The final addition to the team is Craig Piligian who is known for bringing “The Ultimate Fighter,” “American Chopper,” “Dirty Jobs” and “Survivor” to the small screen.

“Wonderfilm is thrilled to be working with television legends Jason Hervey, Craig Piligian and Anthony Zuiker on such iconic material,” said WONDERFILM Founding Producer Jeff Bowler. “‘Merchant of Death’ has all the hallmarks of a long-standing and era defining TV series and adaptation that the industry is craving. Working with such a talented and successful production team is an honour and a great sign that we have found TV’s next epic series, as it has all of the hallmark traits of a major international success. We could not be more excited to bring this fascinating story to the masses in the form of a riveting and suspenseful TV series that quenches viewers thirst for original, emotionally charged content.”

“McQueen” and “Greco’s Game” Acquisition

In October 2018, WONDERFILM announced that it had acquired the intellectual property rights to “McQueen” and James Huston Turner’s thrilling novel “Greco’s Game”.

“McQueen” is slated for production with an initial budget of $20 million and is set to be completed in 2020. WONDERFILM’s Jeff Bowler will be producing the biographical film on the life and career of Hollywood actor Steve McQueen.

After a successful bidding war for the rights to “Grecos Game” by best-selling author James Huston Turner, WONDERFILM has acquired the television series rights. The series will be produced by WONDERFILM’s Dan Grodnik. “Greco’s Game” and the entire Aleksandr Talanov spy series that the book belongs to can be adapted into multiple film and television series as it successfully balances intelligent, action packed and complex plotlines with deep relationship-driven stories and characters that should captivate viewers around the world.

Agatha Media Acquisition

In November 2018, WONDERFILM acquired Agatha Media Corp., a media company with exclusive rights to participate and receive net proceeds from advertising video-on-demand-themed movie channels that are directly distributed to 50 million US homes via a leading internet retailer. This furthers WONDERFILM’s plans to become a vertically-integrated company in the entertainment marketplace by allowing the company to produce, distribute and directly broadcast to end-users for the first time.

WONDERFILM is designing new interactive fan experiences for the movie channel through the company’s online apps and AI technology and intends to offer video-on-demand as a subscription service to users. The company also intends to expand its footprint to 100 million homes by the end of the first year of them broadcasting.

“This is an amazing acquisition for Wonderfilm, immediately enhancing our ability to monetize content creation by opening up multiple new cash flow streams. The movie channel is also the latest milestone in Wonderfilm’s larger growth strategy. A plan that includes developing cutting-edge apps to empower movie viewers through unparalleled levels of interaction as we create a truly integrated long-term fan experience that seamlessly incorporates broadcast, social media, production and eventually blockchain funding. In business terms, the acquisition strengthens the Wonderfilm team of producers’ market leverage as we continue to expand our brand in a highly competitive field,” said Shaw.

Starbury Media Acquisition

In November 2018, WONDERFILM entered a LOI to acquire Starbury Media from Sun Seven Stars Investments Group (SSSI) in a C$30 million deal. The company closed its acquisition of Starbury in April 2019.

Starbury is a sporting brand and media company that provides elite, high-profile athletes and sports personalities with the opportunity to capitalize on their success by helping them develop their personal brand through acting roles, branding services, merchandising and events. The media side of its business, known as Starbury Fighting Group, helps kick start the careers of fighters and action stars.

Grapevine Acquisition

In November 2018, WONDERFILM entered a LOI to acquire a 34 percent interest in Grapevine Logic Inc. in a C$30 million deal.

Grapevine is the world’s leading end-to-end social media influencer marketing platform, which will leverage WONDERFILM’s original content and pursue monetization strategies with celebrity influencers. Grapevine has the production outlet needed to bring its 4,700 corporate brands into broader media channels. WONDERFILM will have direct advertising, marketing, analytics and alternative distribution channels for its original content.

25-Movie Acquisition

In November 2018, WONDERFILM entered a LOI to acquire a slate of over 25 movies from WOL Productions Inc. in a C$30 million deal. In April 2019, WONDERFILM entered into an arm’s length share purchase agreement to acquire WOL Productions.

WONDERFILM has also acquired a slate of over 25 movies and TV series production script packages in both English and Chinese from WOL Productions. Some of the script packages are already fully packaged, enabling WONDERFILM to immediately begin the pre-selling process. A script to note from this acquisition is the action thriller “Ana”, starring Gong Li and directed by Martin Campbell.

Impossible Dream Entertainment Partnership

In February 2019, WONDERFILM partnered with Impossible Dream Entertainment (IDE) to launch a US$200 million film fund that will focus on developing, packaging and financing a diverse range of commercial feature films and television series. IDE was responsible for packaging and producing the most profitable movie of 2017, “Get Out.” IDE has also been nominated for several Academy awards and Oscars, including its recent win for Best Adapted Screenplay for “BlacKkKlansman” at the ninety-first Academy Awards in February 2019.

Under the terms of the joint venture agreement, WONDERFILM will pay a monthly consulting fee of $7,500. IDE will provide a list of films they are working on to WONDERFILM.

The Movie Studio Partnership

In April 2019, WONDERFILM announced that it was forming a strategic alliance and joint venture with The Movie Studio Inc., a vertically-integrated motion picture production and distribution company. The alliance allows for asset alignment, co-production and the acquisition of intellectual property between WONDERFILM and The Movie Studio to reduce the capital expenditures incurred by both companies.

“The Movie Studio is an exciting venture that broadens Wonderfilm’s feature film IP and adds significantly to the Company’s main film production business,” said Shaw. “In addition to talented people, The Movie Studio has great projects in development that we look forward to merging with Wonderfilm’s expertise and production slate. This exciting partnership brings new opportunities for both companies to broaden films and series production which we expect to further expand revenue and shareholder returns.”

WONDERFILM Global Sales Limited Joint Venture

In July 2019, WONDERFILM acquired a 50.1 percent interest in the joint venture company, WGSL. WGSL is a new film, television and media foreign sales and distribution company. The joint venture with 101 Films Limited is expected to give WONDERFILM direct control over its slate of films by growing the movie library and gaining new revenue streams. The company intends to keep its distribution rights in-house instead of outsourcing to third-party distribution companies who earn 10 percent of the profits made. The joint venture is expected to immediately impact WONDERFILM’s revenue.

“Ever since we founded Wonderfilm in early investor presentations, securing the company’s own foreign sales subsidiary was forefront of our growth strategy. Over the past year, Wonderfilm evaluated many options and looked at acquiring several companies, but kept coming back to the perfect fit 101 had both in terms of business and team culture. I have known 101 for some time with joint venture discussion ongoing since last fall. I can’t express to shareholders how revenue and business critical this move is for Wonderfilm and its base film production business. It’s exciting for us to launch the Wonderfilm Global at Cannes where we are targeting $4 million in movie pre-sales over the week,” said Shaw.

Voltage Pictures Agreement

In July 2019, WONDERFILM signed a four-picture production and financing deal with Voltage Pictures, a film and television production, financing and sale company that has won six Academy Awards since the company’s inception in 2005. The first picture in the deal is the action-thriller “The 2nd”, which tells the story of an estranged father who goes to pick up his son from college for the summer and discover a plot to kidnap the daughter of a Supreme Court Justice. The film is currently in post-production.

Management

Kirk Shaw — CEO, Founder, Producer & Director

Kirk has produced over 230 movies, becoming North America’s second most prolific film producer in history. Best known for his production packaging and financing prowess, over his 30-year career Kirk has contributed his talents to many U.S. television series and feature films, including the Oscar winning, “The Hurt Locker.” Kirk has worked with all major studios, plus notable stars such as Charlize Theron, John Travolta, Woody Harrelson, Kim Basinger, John Cusack, Ray Liotta, Nicolas Cage, Thomas Jane and Cuba Gooding Jr. As CEO of WONDERFILM, Kirk remains on the cutting edge of industry trends, actively shaping WONDERFILM’s financing and production-packaging model to meet the demands of a fast-changing industry.

Dan Grodnik — Founder and Producer

Dan has been a driving force in the Indie Film business for more than three decades. His ability to bring more than 50 motion pictures from concept to the screen display his ability to stay on top of current market demands in creative, budget management, finance, sales and distribution. Since 2014, Dan has produced 11 feature films with stars such as Robert DeNiro, Keanu Reeves, Michael Caine, Katie Holmes, Jason Biggs, and Olga Kurylenko. Mr. Grodnik is the former Chairman/CEO of the National Lampoon, and when time permits, an adjunct professor in graduate film studies at Chapman University.

Jeff Bowler — Founder and Producer

Jeff is an Emmy Award winning producer/executive with two decades of experience. He has been a key consultant to many corporations in various industries and is one of the founders of “The Fox Think Tank” along with FOX CEO Peter Chernin and Fox TV Studios CEO David Grant. In 2017 Bowler won an Emmy Award and is producing and part owner of “The Three Stooges” film franchise reboot as well as releasing “Wild Oats” a film that Bowler was Executive Producer on starting Demi Moore, Jessica Lange and Shirley McLain.

Bret Saxon — Founder and Producer

The Saxons brings to WONDERFILM a long successful history in marketing, M&A, and production. Their firm, TMP Inc., has built campaigns for products that have collectively grossed billions of dollars in 113 countries around the world. They are responsible for M&A deals worth north of US$750 million in industries as wide ranging as entertainment, media, manufacturing, and online. In entertainment, they are award winning producers and has financed and produced dozens of television and film projects.

Randy Charach — Executive Producer

Randy works with WONDERFILM as an executive producer and branding consultant. He is also an in-demand keynote speaker and entertainer, as well as a best-selling business author. As a guest expert and celebrity, Randy has appeared on dozens of radio and television programs including CNN and other notable media outlets. With over three decades of experience in show-business and corporate communication, Randy is a valued member of the WONDERFILM team.

Tony Zhang — Founder

Tony has the unique ability of bringing people, money and ideas together. He understands the requirements of a unique team to build a multi-national platform for movie productions. In 2015, Tony sold North America’s largest Chinese language Online to Offline (O2O) website that he founded. Tony was one of the original founders of WONDERFILM with Kirk and Norm. ​

Norman Tsui — Executive Vice President and Director

Norm been financing, operating and investing in technology, media, biotechnology, and high-growth companies for over 25 years. He began his career at KPMG and has since been involved in divestitures, movie financing, structured financings, IPOs, RTOs, CPCs and restructuring. He has been involved with financings and transactions in excess of $4 billion. He has a BSc in Biology and MSc in Bio-resource Engineering from UBC and is also a CPA/CA. Norm is also the Executive Vice President and Director for WONDERFILM.

Rob Straight — Director

Rob Straight is a highly reputed Senior Executive and Advisor with more than 41 years of success spanning entertainment, media, film, TV, and publishing. Leveraging extensive experience in strategic leadership for sales-focused organizations, Rob is a valuable asset for companies requiring expert assistance with growth and direction or exploring and expanding markets. His broad areas of expertise include sourcing and identifying demand, management, team building, international relations, maximizing returns and margins, achieving goals, and executing strategy.

Rob holds a BBA in Marketing from the University of British Columbia. As an experienced board member, Rob has held positions on the boards of Horizon Motion Pictures and the Save Desolation Sound Society.


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