Fade To Black: National CineMedia 2Q Ads Drop

It turns out that out-of-home video is not immune to the general economic slowdown after all. Cinema advertising--previously one of the fastest-growing media in terms of revenue--hit a rough patch in the second quarter, judging from the results released by National CineMedia, one of two major players in the cinema ad market.

NCM said total revenues grew 3.6% to $86.7 million in the second quarter, compared to the same period last year. This growth rate is sharply down from 46.6% growth between the second quarters of 2006 and 2007. Advertising revenue was down 2.5% in the second quarter of 2008 to $74.8 million, also sharply down from the company's 52.8% ad revenue growth last year.

The percentage of ad inventory used was also down, dropping from 80.8% in the second quarter of 2007 to 66.2% this year.

Kurt Hall, the company's CEO and chairman, remarked: "While I am disappointed with our second-quarter results versus 2007, we are still on track with our long-term business strategy." He added that "our original thesis about the migration of media spending to new, more effective digital advertising platforms like ours remains intact."

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