1. Sizzling Summer at the Movies 2009 on Track to be the
Largest Box Office in Two Decades Box office-wise, the sky's
Springing Into Summer the limit for Up. - X-Men Origins: Wolverine
clawed its way to number one with $87 million Christian Bale brings
some Star Trek opened with $72.5 million, up serious star power to
the role 17% over the same weekend in 2008 of the legendary John
Connor. Receive 25% Off a Contract of 13 Weeks or More if Signed By
5/29/09 Terminator Night at the UP Land of the Lost Year One
Transformers: Salvation Museum 2 May 29 June 5 June 19 Revenge of
May 21 May 22 the Fallen June 24 1
2. Where Are Advertisers? At the Movies Those 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. quot;Across most media, '09 is
going to be a down year,quot; says CineMedia Chairman and CEO Kurt
Hall. quot;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. quot;The mindset of people watching
movies is much different than the mindset of people watching
TV,quot; says Tim Chaney, director of advertising at Kia Motors
America, which just concluded a cinema advertising campaign for its
new Soul subcompact. quot;TV becomes a lot of background
noise.quot; At the movies, quot;you've got people in a more relaxed
frame of mind, coming to be entertained.quot; And audience
resistance to movie ads has steadily declined, he says. NO
FAST-FORWARD, NO MUTE There's also a brute fact about this
business. quot;Cinema is one of the only places where the consumer
can't make [an ad] go away,quot; says Hall. And, says analyst James
Marsh of investment banker Piper Jaffray, movies also attract a
younger audience quot;that TV has had difficulty reaching.quot;
(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 quot;overdeliveringquot;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 inventorythere are only so many spots
available on American Idol, after allit'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 TVwell, then, isn't it even better if
their products become movie stars? 2
3. Blockbuster sales drop 20% in first quarter The 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 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. quot;We estimate nearly 3 million more people are
going to the movies each week in 2009 [than 2008],quot; he said on
a conference call with analysts. quot;This has been pulling traffic
from Blockbuster stores.quot; 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. quot;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,quot; 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 quot;Star
Trekquot; and quot;Fast & Furious.quot; Blockbuster is also
looking to sell products like quot;movie-themed sunglassesquot; 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 quot;a bridge to the future when the cost of capital is not as
punitive.quot; Bhatia said it essentially gives the company a year
of breathing room. quot;I think they can focus on operations for
the next 12 to 15 months,quot; he explained. quot;But they will not
have the same flexibility they did before unless the capital
markets improve dramatically. 3
4. The Movies: Americas Favorite Entertainment Destination
Attendance Movies: 1.4 Billion Sporting Events: 198 Million Shows:
12 Million Concerts: 51 Million Source: MPAA 2007 Entertainment
Industry Market Statistics, Billboard Magazine November 2007,
Crains New York Business January 2008 4
5. Cinema Delivers Key Consumers Key findings from
Aegis/Posterscope Out-of-Home Consumer Survey; August 2007 Theyre
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 theyre
spending time in places where your products and services are sold:
movie enthusiasts are more likely than non-enthusiasts to visit:
Coffee Shops Malls Airports Bars Casual Dining Restaurants Gyms
Source: Aegis Media Americas Posterscope USA, Out-of-Home Consumer
Survey, August 2007 5
6. Cinema Advertising Breaks Through 6
7. NEW MEXICO BIG SCREENS BIG ADVANTAGES THE AGES OF MOVIEGOERS
IN ALBUQUERQUE 34.1% - 18 - 34 11 Theaters 40.3% - 35 - 54 120
Screens 25.6% - 55+ 5.8 Million in IN ALBUQUERQUE OUR PATRONS ARE
EDUCATED Annual Attendance AND HAVE HIGH INCOME Frequent moviegoers
are 11% more likely have attended college 9% Growth Since 2006
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 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 7
8. Cinemas Recall Scores Cant 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 8
10. As Seen in Myers Report Cinema Advertising Ranks First
Among 40 Media Categories For Advertising Attentiveness Likelihood
To Pay Attention To Advertising Messages Index Movie Theaters
Pre-movie video entertainment 134 Movie Theaters Pre-movie slide
messages 122 Pre-movie video advertising is the Movie Theater
lobbies (posters, video, kiosks, etc.) 118 highest indexing medium
among Home, Food & Family Interests Magazines 117 audiences who
say they are quot;very Entertainment Weeklies 116 likely/extremely
likelyquot; to pay Websites you visit for TV and movie related
information 113 Primetime Drama Series 108 attention to advertising
in 21 Women's Lifestyle and Special Interests Magazines 107 media
categories. News Magazines 102 Travel Publications 101 Pre-movie
video advertising Situation Comedies 99 indexes 134 compared to the
Primetime Reality Series 99 Elevator TV Screens 93 average
attentiveness of 100. Primetime Variety / Competition Shows 87
(Pre-movie video advertising is Video displays in public locations
87 34% higher than the index Men's Lifestyle and Special Interests
Magazines 87 average). Gossip Tabloids 86 Video displays at
Retailers 85 Dramadies and Primetime Soaps 84 Business Publications
84 Video in Grocery and Drug Stores 72 10
11. 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, quot;Jack Myers Emotional Connections Survey of
8,000 Americans on Audience Attentiveness to Advertisingquot; as
cited in JackMyers.com quot;Daily Data,quot; as cited March 18,
2008, NCM Attitude and Recall Test, April 2008; 11
12. 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 12