• by George Simpson , Featured Contributor, April 4, 2014

Advertising revenue for movie theaters last year totaled $678 million, up 6.5% from 2012, according to the Cinema Advertising Council.  Since 2004, cinema advertising revenue has nearly doubled even as attendance at movie theaters has essentially stagnated. In fact, North American cinema admissions were slightly down for 2013 but still contributed to $35.9 billion in 2013 global sales, a record for the industry. Apparently higher ticket prices in the U.S. helped offset dwindling attendance.

Theater owners argue that even though ticket prices continue to rise (now well over $10 where I live), advertising revenue is crucial to keeping the industry alive. “It is part of the theater business model; cinemas already pay a large amount of money to studios just to play the film, so there are very few revenue streams for the actual theater. You have got to have money coming back in,” says a movie chain exec.

But I think I agree with this guy: “Movie theater ads are out of control, and history hasn’t been kind to businesses that insult their customers,” a Los Angeles-based media expert told Fox 411 a few years ago. “The experience of going to movie theaters today is, frankly, insulting. By the time the film starts, I am annoyed and exhausted. In the age of TiVo, people are less and less comfortable with being bombarded by commercial messages. They prefer to sit at home in a more comfortable environment with their big-screen TVs. Cinema numbers are declining because people no longer find the experience appealing.”

There was a time I saw a movie a week in a theater. Now it’s maybe once a month. Why? 1) Most movies really suck (there is an entire column or two that could be written about how most of what comes out of Hollywood is a crass insult to the intelligence of ticket-buyers. If you have seen “Noah,” you know what I mean. Bigger, louder, and more special effects do not compensate for boring, predictable story lines); 2) prices for everything, from entrance to popcorn and soda, are ridiculous; 3) people still eat, talk and text as if they are the only ones in the theater, and management does NOTHING to quiet them; and  4) positioning long-form commercials as "pre-show content" doesn't fool anybody.

An auto marketer who runs pre-movie commercials told the Wall Street Journal: “We really like the fact that it’s a captured audience.” Well, yeah, but ask the audience how it feels to be bombarded by a dozen or so ads after having paid ever-higher prices to be "captured."

I am certain the Cinema Advertising Council has a raft of data showing that audiences like the commercials or recall them better than TV ads, or some such nonsense. But the fact of the matter is, the commercials go against the flow of what has been the historical value equation between audiences and media. Media provides free content, monetized by advertising. If you don't want commercials, you have to pay to see the content. In the case of movie theaters, you are paying for content (with no promise it will meet your expectations) AND you have to sit through commercials. That would be right before six or eight previews -- which, in fact, are just more commercials. All of which ends 20 minutes or so after the alleged "start time" of the movie.

The theaters think that if they put in better seats, offer more interesting food or better-quality projection, that all will be forgiven and audiences will flock back to the dark. I don't think so. There are too many folks like me who are happy to pay on-demand fees to watch the same movie in their homes without the commercials, the previews, the guy behind them eating KFC, and the five teens two rows down texting throughout the film.