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Transformers:
Revenge of the Fallen
June 24
Year OneJune 19
Land of the LostJune 5
Sizzling Summer at the Movies2009 on Track to be the Largest Box Office in Two
Decades
Springing Into Summer
• X-Men Origins: Wolverine clawed its way to number one with $87 million
• Star Trek opened with $72.5 million, up 17% over the same weekend in 2008
Receive 25% Off a Contract of 13 Weeks or More if Signed By 5/29/09
Box office-wise, the sky'sthe limit for ‘Up.’
-“ ”
Christian Bale brings some serious star power
to the role of the legendary John Connor.
“”
Night at the Museum 2
May 22
Terminator SalvationMay 21
UPMay 29
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Where Are Advertisers? At the MoviesThose on-screen ads before the movie bring in big bucks for National CineMedia and other
movie-ad sellers By Jon Fine, May 14, 2009
This year has been characterized by advertisers slamming the brakes on spending across virtually all online and offline media. Yet even within this scarred landscape, there are thriving patches of grass. I guarantee, though, that you cannot guess what's built a strong case for being a media business darling of 2009 thus far.
National CineMedia (NCMI) is the biggest U.S. movie theater advertising company. That is, it produces programming for theaters that shoehorn ads into the space between the time you take your seat and the start of the coming attractions. "Across most media, '09 is going to be a down year," says CineMedia Chairman and CEO Kurt Hall. "We are in one of the fortunate areas that is new and growing.“
These ads appeal to many other constituencies for the same reasons that make movieheads grit their teeth: Viewers are alone in the dark with a massive and all-but-unignorable ad message spread out on a sailboat-sized screen. "The mindset of people watching movies is much different than the mindset of people watching TV," says Tim Chaney, director of advertising at Kia Motors America, which just concluded a cinema advertising campaign for its new Soul subcompact. "TV becomes a lot of background noise." At the movies, "you've got people in a more relaxed frame of mind, coming to be entertained." And audience resistance to movie ads has steadily declined, he says.
NO FAST-FORWARD, NO MUTEThere's also a brute fact about this business. "Cinema is one of the only places where the consumer can't make [an ad] go away," says Hall. And, says analyst James Marsh of investment banker Piper Jaffray, movies also attract a younger audience "that TV has had difficulty reaching." (One of National CineMedia's top ad categories is the U.S. military, which obviously is only concerned with reaching young men and women.) And a healthier-than-expected year for movies, with box office attendance and revenue both up in the double digits, means that in many cases cinema ad firms are "overdelivering"—more people are seeing the ads than the advertisers paid for, says Marsh. (This is not a claim many TV networks can make.)
If TV networks continue to command premiums for shrinking audiences because of a scarcity of inventory—there are only so many spots available on American Idol, after all—it's a game cinemas can play, too. Movie houses still keep ads to a (relative) minimum, which, analysts say, also works in their favor. And one simple reality doesn't hurt either: If you believe, as I do, that one reason marketers stick with television is because they love to imagine their product starring on TV—well, then, isn't it even better if their products become movie stars?
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As if crushing debt, the recession, Netflix and Redbox weren't enough, Blockbuster Inc. has a new foe: the booming box office.
That's according to Jim Keyes, chief executive of the struggling but still massive DVD rental chain, who on Thursday blamed much of his company's weak performance last quarter on the growing number of people watching movies in theaters and not their living rooms.
"We estimate nearly 3 million more people are going to the movies each week in 2009 [than 2008]," he said on a conference call with analysts. "This has been pulling traffic from Blockbuster stores."
The 14% rise in movie ticket sales this year hasn't hurt Netflix, which gained nearly 1 million subscribers last quarter and saw revenue grow 21% from the previous year.
It's tough to ignore Blockbuster's own problems, most notably the cash shortage and looming debt repayments that forced it to cut its inventory of new DVDs by 20% during the first quarter to preserve cash. Revenue fell nearly 20% to $1.12 billion from the same period last year, while net income was down nearly 40% to $27.7 million.
Both figures were significantly below investor expectations, which sent Blockbuster stock plummeting 23% in after-hours trading to 88 cents. "The main issue is that same-store sales were worse than expected and there's a concern about how long it will take them to get back on track," said Arvind Bhatia, an analyst at Stern, Agee & Leach.
Keyes promised that Blockbuster's stores would be fully stocked and aggressively marketing the value of rentals since the company eased its liquidity concerns last month by renegotiating a revolving line of credit that was set to expire in August. The so-called revolver now won't end until September 2010, though Blockbuster had to reduce the available credit to $250 million from $350 million and accept a higher interest rate to get the extension.
Keyes pointed to a number of initiatives that could improve performance later in the year, including a strong lineup of films such as "Star Trek" and "Fast & Furious." Blockbuster is also looking to sell products like "movie-themed sunglasses" and Blu-ray players in stores, to grow its Netflix-like DVD-by-mail and digital download businesses, and to roll out more than 3,000 Redbox-like kiosks through a partnership with manufacturer NCR.
The Dallas company is also looking to slash $250 million in costs through store closures and other initiatives. All that won't matter unless Blockbuster can improve the terms of its debts, which stand at $922.5 million. Keyes described the renegotiated line of credit as "a bridge to the future when the cost of capital is not as punitive."
Bhatia said it essentially gives the company a year of breathing room. "I think they can focus on operations for the next 12 to 15 months," he explained. "But they will not have the same flexibility they did before unless the capital markets improve dramatically.”
Blockbuster sales drop 20% in first quarterThe DVD rental chain says more people are watching movies at theaters, pulling traffic from Blockbuster stores.
Profit plummets 39%.By Ben Fritz
May 15, 2009
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The Movies: America’s Favorite Entertainment Destination
Concerts: 51 MillionShows: 12 MillionShows: 12 Million
Sporting Events: 198 Million
Source: MPAA 2007 Entertainment Industry Market Statistics, Billboard Magazine November 2007, Crain’s New York Business January 2008
Attendance
Movies: 1.4 Billion
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Cinema Delivers Key Consumers
• They’re on the go: 18-30 year-olds spend less time with most traditional media and more time out-of-home than the average adult 18+
• They pay attention to movie advertising: among the vast majority who go to the movies, 84% notice movie theater advertising
• And they’re spending time in places where your products and services are sold: movie enthusiasts are more likely than non-enthusiasts to visit:
Source: Aegis Media Americas’ Posterscope USA, Out-of-Home Consumer Survey, August 2007
Malls
Casual Dining Restaurants
Bars
Coffee
Shops
Gyms
Airports
Key findings from Aegis/Posterscope Out-of-Home Consumer Survey; August
2007
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Cinema Advertising Breaks Through
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NEW MEXICOBIG SCREENS BIG ADVANTAGES
9% Growth Since 2006
• 11 Theaters• 120 Screens
• 5.8 Million in Annual
Attendance• Frequent moviegoers are 11% more likely have
attended college• Frequent moviegoers are 16% more likely to
have graduated college• Frequent moviegoers are 30% more likely to
make $75,000 or more• Frequent moviegoers are 40% more likely to
make $100,000 or more
IN ALBUQUERQUE OUR PATRONS ARE EDUCATED AND HAVE HIGH INCOME
THE AGES OF MOVIEGOERS IN ALBUQUERQUE• 34.1% - 18 - 34 • 40.3% - 35 - 54• 25.6% - 55+
IN ALBUQUERQUE OUR PATRONS WORK IN A VARIETY OF PROFESSIONAL OCCUPATIONS• Frequent moviegoers are 7% more likely to work
in sales/offices• Frequent moviegoers are 33% more likely to
work in professional fields• Frequent moviegoers are 9% more likely to work
in management/business/finance
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Cinema’s Recall Scores Can’t Be Beat
*Source: Morgan Stanley Dean Witter, 2001; Cinema Recall (i.e. September 2007 NCM On-Screen IAG Report); LSU Manship School of Mass Communications, June 2003 for O-O-H
9Source: OTX FirstLook Survey, May 2006
Patrons Enjoy FirstLook
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Cinema Advertising Ranks First Among 40 Media Categories For Advertising Attentiveness
• Pre-movie video advertising is the highest indexing medium among audiences who say they are "very likely/extremely likely" to pay attention to advertising in 21 media categories.
• Pre-movie video advertising indexes 134 compared to the average attentiveness of 100. (Pre-movie video advertising is 34% higher than the index average).
Likelihood To Pay Attention To Advertising Messages
Index
Movie Theaters Pre-movie video entertainment 134
Movie Theaters Pre-movie slide messages 122
Movie Theater lobbies (posters, video, kiosks, etc.) 118
Home, Food & Family Interests Magazines 117
Entertainment Weeklies 116
Websites you visit for TV and movie related information 113
Primetime Drama Series 108
Women's Lifestyle and Special Interests Magazines 107
News Magazines 102
Travel Publications 101
Situation Comedies 99
Primetime Reality Series 99
Elevator TV Screens 93
Primetime Variety / Competition Shows 87
Video displays in public locations 87
Men's Lifestyle and Special Interests Magazines 87
Gossip Tabloids 86
Video displays at Retailers 85
Dramadies and Primetime Soaps 84
Business Publications 84
Video in Grocery and Drug Stores 72
As Seen in Myers Report
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Cinema is One of the Most Engaging Ad Environments of all Major Media
Consumers pay attention to ads in
cinema at a rate of 2.5 times greater than
television*
*Source: Jack Myers Media Business Report, "Jack Myers Emotional Connections Survey of 8,000 Americans on Audience Attentiveness to Advertising" as cited in JackMyers.com "Daily Data," as cited March 18, 2008, NCM Attitude and Recall Test, April 2008;
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Cinema Ads Drive Purchase Intent
Cinema ads are TWICE as effective as television ads driving consumers to consider purchasing a
product being advertised
Source: Myers Publishing/OTX, October 2006, NCM Primary Studies May 2003 – June 2007
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