NY Times: Advertisers Pour Money Into The Big Screen

posted by Patrick Crowley on July 6, 2005 at 5:33 am

A recent New York Times article took a look at the rising amount of advertising being shown at movie theaters.

A few interesting highlights:

• In 2004, ads in United States movie theaters grew 23 percent to $438 million, according to the Cinema Advertising Council.

• More than 27,000 of the total 37,000 movie screens in the United States run cinema advertising

• Off-screen promotions – including revenue from in-lobby promotions – rose 41 percent to $64 million.

• On-screen advertising revenues grew 20 percent last year to $374 million

Comments (2)

JimRankin on July 6, 2005 at 8:39 am

All this advertising is, indeed, making some people rich, but it is also turning off the majority of movie goers, which is why the attendance figures they don’t mention have been dropping steadily for years now. Hollywood’s studios and distributors are keeping the vast share of the movie ticket’s revenues, forcing the exhibitors who own the cinemas to raise both ticket and concession prices in order to pay off the conglomerates who now own 90% of the screens. Hollywood is killing the goose that laid the golden egg (at least as far as your local cinema is concerned)! Many experts now say that within a decade or so there will be no cinemas aside from a few in New York and Los Angeles where people can flock to see a film on first release (and where TV cameras will be stationed to record them to serve as the premiere and anticipation drivers of their sales), before they go a week later and buy it on DVD or whatever the newest home theatre medium will prevail then. This Cinema Ad Council boasts about their huge incomes from lobby sales now, but wise people see the handwriting on the wall and know that the future is most profitable to the film makers if they sell directly to the public, as recent DVD sales volumes have proven. This means good-bye to THOUSANDS of cinemas across the nation and then in the rest of the world as the money men figure out ways to cut themselves the entire money pie, and not just the largest slice as they do now! I find these figures appalling, not encouraging, for all they portend, but at least we can rejoice that such as the Cinema Ad Council will perish along with the cinemas/theatres they helped to destroy.

Don K.
Don K. on July 6, 2005 at 3:30 pm

The future does not bode well for motion picture exhibition as we have known it. As of this writing, the technology exists for high speed interconnect delivery of programming to home computers that interface with home theater systems. It is just a matter of time before a system is marketed at a price point that seems affordable to the middle class. When the public can download High Definition programming, and/or buy a uniform standard for High Definition DVD (are you listening Sony/Philips and Toshiba?), thousands of movie theaters in the country will probably close. It could even resemble the situation that occurred after the 1948 Federal Court Consent Decree that required the “Big Five” studios to divest themselves of their holdings in exhibition. From 1948 into the mid 1950’s, thousands of movie theaters closed across the country. History may be about to repeat itself.

In addition, the recent Supreme court decision affirming the right of local governments to condemn private property by eminent domain for the benefit of private developers could affect many movie theaters eventually. In time, you can expect numerous movie theaters to go out of business and the land sold or condemned for development.

Personally, I hate the thought that some day going out to see a movie in a theater may be regarded as a quaint ritual practiced by an earlier generation. At that point, it would be like comparing it to people listening to radio programs before the advent of television. Does that comparison bother you? Well, I hope so!

You are right – today the studios are killing the goose that lays the golden egg. As of this writing, the current box office slump has lasted nineteen weeks. The screen ads are becoming a real sore spot for much of the public. With the price of parking and concessions, it’s just more economical to rent the DVD.

Currently, the studios still need the exhibitors to launch a movie release and prepare the market for the eventual DVD release. When they figure out how to make movie theaters redundant, expect things to change dramatically.

Only a Federal Anti-Trust suit can stop the media conglomerates from monopolizing film and electronic media. So, try writing you congressman – it’s time to break up the media conglomerates!

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