National CineMedia CEO Kurt Hall warned Wall Street analysts today that his movie ad business is in for more turbulence, even though theater owners expect to fill seats this summer and TV networks predict robust ad sales in their upfront market. For instance, Hall noted that Japanese auto and consumer electronics companies are among the biggest advertisers in theaters, but they don’t know whether there’ll be enough parts to meet production goals following the country’s earthquake and tsunami. ”They don’t want to spend a lot of money [on movie theater ads] if their products aren’t going to be in the stores or dealerships,” Hall says. And Hall said those high-testosterone Army National Guard recruitment ads are disappearing in movie theaters before the trailers. It’s due to budget cuts in Washington — and the National Guard doesn’t need to hunt for applicants in this anemic economy. ”A lot of people go into the military because they can’t find jobs in the private sector,” Hall noted. The No. 1 seller of movie theater ads reported a 1Q net loss of $1 million, down from a $1.2 million profit in the same period last year, on revenues of $59.1 million, down 12.8%. The lost advertisers are hard to replace. National CineMedia says it only has about 300 national clients. But Hall had some encouraging news for investors, although not necessarily for moviegoers: The company is starting to sell a lot of pre-movie ads to insurance companies.

David, yesterday I was at Borders in NYC and I nearly fell over when I saw ” movie DVDs ” for sale for ” NY price ” at $5.99 . The reality sank into me how grave things really are for our industry. I think it’s important now that all projects must be acted out with ” precision ” and smart choices, our industry cannot afford to make ” frivilous ” choices anymore.
Just a guess that those $5.99 DVDs you saw were either at a going-out-of-business Border’s location, or product from a store that already closed.
Is this wealthy movie industry CEO suggesting that people join the military because they need a job and not because they want to serve their country? What a slap in the face to our men and women in uniform. Then again, Bill Maher said essentially the same thing, calling them low-lying fruit, and was vilified by the right.
Jeez, poor and lower middle class folks have been going into the U.S. military to improve their economic lot for decades. Yes, many join strictly out of loyalty many others join to improve their economic prospects.
The military used to promote itself as a place for young people to learn marketable skills for companies in a post military career.
I think the GOP continues to show how out of touch it is with average people and the choices they have to make for survival. They really don’t understand how tough it is for people of all ages to find decent employment. Sadly, the same can be said for Democrats who aren’t doing much to create jobs either.
i try to go to the Landmark as often as possible – one reason – no ads!
Landmark most certainly shows ads before its films. They’re usually promotion for other Mark Cuban properties such as HDNet but they also run automotive and beer spots.
I guess I’m economically challenged, but why exactly do theaters need to advertise at all? Don’t the viewing public, between the tickets and the concessions, keep them covered? I’m not too old, and I remember going to the theater and seeing just the trailers for the upcoming features. Now, I’m bombarded with 10-15 minutes of ads before the previews even start. It’s definitely one of my least favorite things about going to the movies.
No, tickets and concessions do not cover their costs. Depending on the theatre chain, cinema ads can represent 20%-50% of their operating profit. In some cases, chains NEED ad revenue to remain solvent.
Yes, the preshows can be long but the studios aren’t helping by making us watch 6-7 2:30-long previews before each film.
Those military ads will probably never come back. With the trillions of dollars of debt we’re dealing with, Democrats are touting the need to substantially cut the military. I suspect it will happen, and when it does, there goes yet another opportunity for young people.
Like Republicans care about opportunities for young people. The GOP has been shipping kids’ jobs overseas since the days of Reagan.
Nice try, Walter.
Back-door draft. Good times in neo-depression America.
If you know your history, you know what comes next…
In Canada, while automotive ads are big in cinemas (including the big 3), the bulk of the adspace is purchased by the big 5 banks, the largest grocery store/lifestyle chain, and the two largest cell phone providers. And of course, Coca-Cola, which has a virtual lock through it’s relationship with Cineplex. Not exactly diverse, but not as heavily dependent on one or two sectors. Of course, we have less competition among theatre chains here – there are only 2 or three, and in most cities (outside of Canada’s 5 largest metro areas) there is only one provider with multiple locations.
US Army, US Air Force, and probably US Marines, too, will all run cinema ads before the end of the year. National Guard was the biggest player but the military has not abandoned cinema as a marketing platform.