Commentary

AMC Theaters: Commercials In Theaters OK - Or Not?


It seems that AMC Entertainment-- the biggest U.S. theatrical chain -- has given up the purity of theatrical exhibition when it comes to full nonstop film entertainment. It has adding regular-looking TV advertising to its overall in-theater viewing experience.

Good news for modern entertainment consumers: It is effectively “pre-roll” advertising -- before the actual film begins. AMC says it is doing this to avoid increasing ticket prices. AMC is perhaps the last movie theater chain to do this.

Just before the actual screening of a movie -- but after movie theatrical trailers -- it is adding 20-30 minutes of commercials. It recently made a deal with National CineMedia, which will sell advertising time.

Some discussion and analysis of the move comes from the need to generate more revenue in the current slowing post-pandemic movie theater period where box-office revenue is still not up to snuff of those pre-pandemic ever-rising theatrical box office revenues.

advertisement

advertisement

The current period of weak box-office revenue is now in its sixth year -- and doesn’t seem to be slowing down. Season-to-date, revenues are still down around 30% from 2019.

Why start up now when in-theater commercials have been around for some time?

AMC’s logic may be that those pre-roll commercial airings in reality have little effect on business -- at least when surveying competitors that have been airing TV-like commercials for some time.

In-theatre advertising -- according to long-held research -- has been a plus for marketers, with its captive audience that has no way to fast-forward or skip commercial content, resulting in higher overall revenue.

The downside is that veteran moviegoers are savvy about the actual "start times" of films these days. They don’t have to be exactly on time when coming to the theater and taking their seats, and often stroll for 20-30 minutes after the published start time of a movie.

But not all non-movie content messages are shunned by consumers. Running trailers is something theaters have been doing for decades. This is content that executives know won’t upset people. But regular-looking TV-like commercials -- for paper products, auto or home insurance, or financial services -- can.

This might include a commercial or two promoting Netflix, Amazon Prime Video, Disney+, or Paramount+. Theatergoers might be interested in that as well.

The problem is that those home-entertainment streaming competitors are the entertainment businesses that theater owners may have an uneasy relationship with these days. For many analysts, they are a major reason that the theatrical-movie business has suffered for the last half decade.

Then again, theater owners will be happy to take their advertising money.

Next story loading loading..