In Tough Box-Office Year, Theaters Bicker Over the Pre-Show Ads

(Bloomberg) -- With box-office sales down 6% this year, theater owners are fighting over those annoying pre-show commercials.

On Tuesday, National CineMedia, one of the biggest theater advertising companies, said the Regal and Cinemark chains have agreed to run six minutes of commercials after the posted movie showtime, including a new minute-long promo during the coming attractions, right before the movie starts.

But the leading U.S. cinema chain, AMC Entertainment Holdings Inc., is having none of it. The company said Wednesday it rejected the new ad strategy out of concern “that U.S. moviegoers would react quite negatively.”

The more aggressive commercials would mark a big change for U.S. theater chains. Previously pre-show ads ran before the posted movie showtime. Now they’ll run after that point, including during the trailers, a switch that’s already sparking controversy. Since most fans are seated and glued to the screen by that point, the final ad is being marketed by the company as a “platinum spot.”

National CineMedia has a 65% market share of in-theater advertising, so the change will be hard to miss.

Marketers’ Prize

“When you go to see ‘Star Wars,’ come December, within a trailer or two of the movie, you’ll see a 60-second ad that we’re calling the ‘platinum spot,’” National CineMedia Chief Executive Officer Thomas Lesinski said Tuesday at a Goldman Sachs Group Inc. conference. He called it “one of the most attractive spots in media.”

AMC’s fears of a backlash are understandable. Film and TV fans enjoy an increasing array of commercial-free home-entertainment options that compete with theaters. Netflix Inc. invests billions of dollars in programming and backs high-profile awards contenders, like Martin Scorsese’s “The Irishman,” which will be released later this year.

Advertiser demand for the spot is being driven by the advent of reserved seating, Lesinski said, because marketers tend to believe that allows fans to show up later. National CineMedia is controlled by Cinemark and Regal, which is owned by London-based Cineworld Group Plc

The new platinum spot will debut Nov. 1 in just over half of the company’s network.

©2019 Bloomberg L.P.

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