CineMedia Posts Strong Quarter, Coming Attractions Look Good Too

The recession is taking a bite out of most media businesses, but not all of them: on Tuesday National CineMedia, one of the two main cinema advertising networks in the U.S. market, reported positive results for the first quarter of 2009. NCM's good news is a sign of the continued vitality of alternative media, including digital out-of-home video, despite the sharp economic downturn.

NCM said total revenues increased 17.2% in the first quarter of 2009 compared with the same period in 2008, from $62.7 million to $73.5 million. This was due mostly to an 11.9% increase in advertising revenue, from $53.7 million to $60.1 million.

NCM said that the degree of ad inventory utilized also increased, from 58.7% to 67.4%. With the percentage of ad revenue increasing faster than inventory utilization, these results suggest NCM was able to charge higher rates this year than last.

NCM was guardedly optimistic about the future as well, noting that it "continues to expect full year 2009 total revenue and adjusted OIBDA to approximate the results achieved in 2008." This means revenue in the range of $84-$87 million in the second quarter, although NCM conceded that economic volatility makes forecasting difficult; CEO Kurt Hall, however, warned that "should the difficult business environment not begin to improve, there may be some headwinds as we are measured against some strong 2008 second half comparables."



In recent months NCM and its main competitor, Screenvision, sought to bolster inventory and measurement offerings for advertisers. In March, NCM expanded its data pool with television advertising schedules from Nielsen, allowing the cinema ad network to conduct cross-media comparisons of television and cinema advertising effectiveness when it courts media planners and buyers. In early April, Screenvision revealed plans to bring digital video to the lobbies of its various affiliate theaters, giving advertisers another way to reach movie-goers during the cinema experience. Its partnership with Cinema Scene Marketing has already installed digital poster outlets in 100 locations, and Screenvision expects to increase this number to 230 by the end of this year.

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