• by Erik Sass  @eriksass1, March 10, 2009

While other media are plodding or imploding, digital out-of-home video is steaming ahead with plans for expansion and positive earnings results. In the latest deal, Screenvision signed up Marcus Theaters, the nation's seventh-largest theater chain--adding 675 screens at 55 locations to its national cinema advertising network, including heavy concentrations in Chicago and Minneapolis.

Marcus Theatres switched to Screenvision from its main rival, National CineMedia, signaling intensifying competition between the two for cinema ad partners. However, NCM had good news of its own, announcing strong results for the fourth quarter of 2008.

Following earlier deals with the United Entertainment Corporation and Studio Movie Grill, two niche movie theater chains, the deal with Marcus Theaters brings Screenvision's total to over 15,300 screens in 194 DMAs, covering 92% of the country and representing about 48% of the total cinema advertising market. Screenvision appears to be pulling even with National CineMedia, long the larger of the two networks, by luring away NCM partners.

Emphasizing the continuing growth of the medium, Matthew Kearney, the president and CEO of Screenvision, said the company planned to continue expanding in 2009, "maximizing new revenue opportunities for our exhibitor partners [and] presenting marketers with engaging advertising opportunities."

As the poaching of Marcus Theaters suggests, there is no love lost between Screenvision and NCM, but the latter had cause to celebrate. Revenue in the fourth quarter of 2008 grew 19% compared to the same period in 2007, jumping from $94.5 million to $112.4 million. That was due mostly to an 18.6% increase in ad revenue, which reached $85.6 million.

Also, NCM meetings and events revenue rose 20% to $10.7 million. For the full year 2008, NCM posted total revenues of $369.5 million, up 11.3% from $332 million in 2007.

In announcing the news, NCM revealed that ad rates increased from 2007-2008, indicating that advertisers are coming to view cinema advertising as a more valuable medium. Cost-per-thousand rates were 12% higher in the fourth quarter of 2008 than the same period in 2007.