• by Wayne Friedman , April 12, 2023

Movie theater advertising company National CineMedia has filed for bankruptcy -- as a result of the slow growth of the in-theater movie business as it struggles to recover from the effects of the pandemic.

This comes as AMC Entertainment -- the largest U.S. movie theater chain -- announced on Tuesday that it had bought a major stake in the company of 9.1%, which makes AMC the second-largest shareholder in National CineMedia.

For the fourth quarter of 2022, National CineMedia expects to report 44.4% higher revenue to $91.7 million versus $63.5 million in the same period the year before. At the end of March 2022, the company's trailing 12-month revenue was $146 million. At the end of September of 2022, it was $222 million. By way of comparison, it was $433 million at the end of March 2020 -- the start of the pandemic.

Last month, Eric Wold, senior research analyst for B. Riley Securities, said the company confirmed it had secured recent upfront advertising deals of around 85% of what the company’s average take was over the years from 2017 to 2019, during the pre-pandemic period.

Even with uncertainty in the market, Wold said this demonstrated the “attractiveness” of the business in reaching key young consumers with movie-theater advertising that, unlike TV and other media, cannot be skipped.

Recently Cinewold -- the parent company of Regal Cinema, another major movie chain -- filed for Chapter 11 bankruptcy protection.

Wold says that this year, the U.S. domestic box office is estimated to get to nearly $9 billion -- roughly 75% of the nearly $12 billion the U.S. movie industry achieved in 2018. First quarter box office revenue of $1.72 billion exceeded Wold’s $1.68 billion estimate.

Research from National CineMedia last month showed cinema “attention” scores were four to seven times greater than all other video channels including TV, CTV, social and digital ads.

In addition, two-and-a-half times more consumers watched ads playing in a movie theater compared to TV and CTV – 97% for cinema ads versus 38% for TV and 35% for CTV ads.