Silver Screen Has Silver Lining, Cinema Net Posts Boffo Ad Results


National CineMedia, which operates the larger of two cinema advertising networks in the U.S., announced that total revenues increased 12.3% to $427.5 million in 2010, up from $380.7 million in 2009.

However, the company's strong overall performance did slow down in the fourth quarter, when total revenues declined 0.4%, from $118.6 million to $118.1 million.

These figures mostly reflect NCM's performance in advertising, where revenues for the full year increased 13.2%, from $335.1 million to $379.4 million in 2010. In the fourth quarter of 2010, advertising revenue posted a modest 0.6% gain, edging up from $103.2 million to $103.8 million.

Revenue from the company's experiential marketing operation, Fathom Events, increased 5.5% from $45.5 million in 2009 to $48 million in 2010. But in the fourth quarter, Fathom revenue decreased 6.5%, from $15.3 million in 2009 to $14.3 million in the same period in 2010.



While total revenues were basically flat in the fourth quarter, NCM was also able to enforce some discipline in inventory pricing, as CPM advertising rates increased 5.8% from the fourth quarter of 2009 to the fourth quarter of 2010.

For the full year, CPM rates rose 5.7% from 2009-2010. Excluding beverage revenue, this translated into an 18% increase in advertising revenue per attendee in the fourth quarter of 2010, and a 20% increase for the full year -- reflecting increased rates for ads reaching a somewhat smaller total audience size.

On that note, NCM chairman and CEO Kurt Hall remarked that this "demonstrates the fact that our growth is not closely tied to the ebbs and flows of the theatrical box office."

Total U.S. box office attendance and sales declined slightly last year, according to separate figures from IMDB, with the total number of tickets sold slipping 5.3% from just over 1.41 billion to just under 1.34 billion.

Hall said NCM expects future growth will be driven by adding new theaters to its digital networks, increased spending on Fathom events and the introduction of new in-theater and online channels for reaching cinema-goers.

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