Regal And Cinemark To Run Ads Closer To Feature Films Under National CineMedia Pact – Update

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UPDATED with AMC response. Under a new agreement with major in-theater advertising firm National CineMedia, top exhibitors Regal and Cinemark will incorporate advertising just prior to the “attached” trailers before feature films.

But AMC, the No. 1 U.S. circuit, has come out strongly against the plan.

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The pact starts November 1 and will designate a single 30- or 60-second ad as a “platinum spot.” That ad will play immediately before the “attached” one or two trailers right before the feature. (Customarily, the studio distributing the feature “attaches” one or two trailers for its upcoming titles.)

Exhibitors will get a 25% cut of the revenue collected from the platinum spots, which National CineMedia CEO Tom Lesinski said “will become one of the most attractive spots in the advertising industry.”

Previously, the pre-show complement of ads had ended before the stated showtime, at which point trailers would begin to play. National CineMedia said the new agreement means its “pre-feature program” of ads will now play up to five minutes past the scheduled showtime. In other words, a showtime of 8PM can now feature on-screen ads playing until 8:05.

In a conference call with Wall Street analysts, Lesinski called the announcement “the most significant strategic announcement since the company was founded in 2003.” He said AMC is in active discussions to join the initiative and expressed confidence it would be added soon. AMC, in a press release issued later Tuesday, flatly denied it is talking with National CineMedia.

“In April of this year, NCM proposed this concept to AMC of commencing a platinum advertising position during the end of trailer play, which AMC flatly rejected at the time because of AMC’s concerns that U.S. moviegoers would react quite negatively to the concept,” the company said. “AMC has no plan to introduce commercial advertising close to the start of a movie’s commencement at its theatres in the United States, nor does AMC envision entering into such an arrangement with NCM anytime in the foreseeable future.”

As to the idea that fewer trailer slots would be available — not likely a welcome development for movie studios — National CineMedia President Cliff Marks said the company was not in a position to assess trailer shelf space. “That’s a question to ask exhibitors,” he said. “What we feel will be very unique will be the creative” approach of the platinum spots. The expectation, he added, is for “something special and something that consumers even look forward to. … This is a very valuable piece of real estate.” Lesinski effusively compared the way platinum ads would play in theaters to the way ads play during the Super Bowl.

The move comes at a delicate time for theatrical moviegoing. Exhibitors and studios alike are facing intensifying challenges from subscription streaming. Attendance and revenue, while it has held steady, is under pressure. Even though advertising has been a presence in U.S. theaters for at least a generation, there is an element of risk in injecting more commercial messages into the theater environment.

Lesinski minimized the potential downside in his remarks to analysts. Theaters in Canada, Europe and elsewhere have long showcased advertising in a similar fashion, he reasoned. “We don’t believe it will be a significant issue for exhibitors or consumers,” he said.

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