National CineMedia Says Movie Theater Ads Are Benefitting From TV Industry’s Challenges

The pressures facing the television industry as a result of changing viewership habits aren’t going away any time soon, as evidenced by the latest string of earnings reports from the biggest media players.

Aside from the usual suspects of streaming video services and new online platforms, there seems to be another beneficiary of the TV industry’s woes—cinema advertising.

National CineMedia, which books and produces advertising that airs in movie theaters before the start of film previews, posted a 27% increase in national ad revenue for the third quarter and reported a roughly 15% increase in national upfront commitments for 2016.

“This strong upfront for the second year in a row while TV had another lower upfront, provides clear evidence that we are not being negatively impacted by some of the same secular issues that are affecting TV and other traditional media businesses,” NCM Chief Executive Kurt Hall said in an earnings call with analysts late Monday. “In fact, those issues are actually enhancing our ability to gain video advertising market share.”

NCM—which is majority owned by the nation’s three biggest movie-theater companies, Regal Entertainment Group, AMC Entertainment Holdings and Cinemark Holdings —has been pitching itself as a video network in hopes of helping Madison Avenue ad buyers view cinema ads as a viable competitor in the broader video landscape. It’s the largest cinema advertising company in the U.S., and during its upfront presentation this year, the company touted cinema ads as the intersection of two highly sought-after ad buys: premium primetime video and live events.

National CineMedia said its revenue from selling advertising to captive movie theater audiences is climbing as TV viewers find more ways to avoid commercials. The cinema advertising company posted a 27% increase in national ad revenue for the quarter.

Source: National CineMedia Says Movie Theater Ads Are Benefitting From TV Industry’s Challenges – WSJ

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