Cinema Advertising Breaks Even '09, Positive Outlook for '10

by , Dec 28, 2009, 5:29 PM
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Considering the general fortunes of the media business in 2009, breaking even looks pretty good -- and that's roughly where cinema advertising will end up, according to several recent forecasts. Industry oracles also see a return to long-term growth in 2010, pointing to the past strength of cinema advertising, which shared in the general expansion of digital out-of-home video in 2007-2008.

In the first three quarters of 2009, National CineMedia (one of two companies that dominate American cinema advertising, along with competitor Screenvision) said total ad revenues were up 2% to $262 million. It is forecasting full-year revenues of around $365 million -- basically flat compared to last year's performance -- a 1% decline from $369 million.

That compares favorably with traditional media such as newspapers, where ad revenues were down 28.4% in the first nine months of 2009, according to the Newspaper Association of America. In radio, ad revenues fell 21% in the same period, according to the Radio Advertising Bureau; in magazines, ad pages tumbled 27%, per the Publishers Information Bureau. Broadcast TV was down 15.7%, per the Television Bureau of Advertising; and outdoor was down about 18%, according to the Outdoor Advertising Association of America.

In percentage terms, cinema advertising's year-to-date results even beat the Internet -- down 5.2% in the first nine months of 2009 according to figures from the Interactive Advertising Bureau.

Looking to the future, cinema advertising was one of the few media ZenithOptimedia predicted to return to positive growth in 2010, along with TV, the Internet and outdoor.

From $2.18 billion this year, ZenithOptimedia expects global cinema advertising revenue to grow 4% to $2.27 billion in 2010. While this increase is fairly modest, it again compares favorably to ZenithOptimedia's forecast of further declines in newspapers, magazines and radio.

While not giving a separate figure for cinema advertising in the U.S., Magna also forecast "outperformance" in 2010, noting that "as theaters increasingly become connected to digital networks, the industry has been better positioned to seek budgets which were otherwise allocated towards television advertising."

Cinema advertising's relatively strong performance in 2009 was also due to the continuing popularity of moviegoing, reflected in record box-office sales in 2009. The last holiday weekend alone saw box office sales of $278 million, up from last year's record-breaking $253 million, per AP.

Full-year cinema ad revenues will top $10 billion, compared to a previous record of $9.7 billion in 2007.

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