Movie ads gaining traction

Study finds 63% of viewers 'do not mind'

New York — Ads on movie screens, widely considered an abomination just a few years ago, appear to be gaining traction with moviegoers.

A study released Thursday by Arbitron found that 63% of those who had seen a movie in the past month “do not mind the advertisements they put on before the movie begins.” Among frequent moviegoers, defined as those who had seen five or more pics in the prior three months, the number rose to 68% and among teens it was 74%.

Among other key findings:

  • About 59% of all moviegoers recall seeing pre-film ads.

  • Frequent moviegoers consider movie ads more acceptable than ads on TV by a margin of 53% to 46%.

  • Frequent moviegoers are elusive targets for TV ads. About 29% of them have digital video recorders and, on average, they are 14% more likely to be among the lightest TV viewers in the U.S.

The survey was based on telephone interviews conducted last summer with 1,010 random participants aged 12 and older.

While “does not mind the ads” sounds like faint praise, it is better than the “intends to sue and dismember the projectionist” responses that flowed in before.

Despite that early skepticism and charges that the B.O. slump of 2005 was tied to a perceived glut of trailers and ads, the screen ad biz is now generating some impressive returns.

In February, National CineMedia, which is jointly owned by exhibs Regal, AMC and Cinemark, held a successful public stock offering. Shares were up almost 3% Thursday to close at $27.23, close to their IPO level. Regal alone expects to net $445 million from the offering.

National and ScreenVision, the other major player, are tapping into a total market projected to reach $1 billion by 2008, up from $480 million in 2004, according to media investment firm Veronis Suhler. An estimated 79% of theaters are now equipped to show ads.

That situation is a dramatic leap from the late-1990s, when bankruptcy-riddled exhibs were welcoming the extra revenue as wary studios stewed. Some, namely Warner Bros. and Disney, refused to allow their pics to be screened after ads. Entire complexes like Pacific’s ArcLight Hollywood were built on the concept of an ad-free experience.

A 2003 lawsuit in Chicago charged Loews Cineplex with fraud, asserting that films routinely started well after advertised showtimes, forcing on-time patrons to sit through ads. A judge dismissed the case, but after an appeal, Loews agreed to add a disclaimer that features begin 10-15 minutes after published showtimes.

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