More ads before movies.....

Ads now part of the picture

Theaters want their customers to sit still for new commercial spots

03/03/2003

Associated Press

LOS ANGELES – Talk show host Jay Leno can be seen on the big screen this month – not in a new movie but in a three-minute short film that serves as a commercial for his Tonight Show.

The film, which features Mr. Leno as a hooded, unshaven maniac who beheads his guests, is part of a 20-minute block of commercials and programs that theater owner Regal Entertainment Group hopes will grab their audiences' attention without angering them.

Across the country, theaters are revolutionizing what they show customers before the start of a movie, replacing decades-old static slide shows advertising local businesses with digital projectors showing short films and national advertising spots.

The trend comes as the industry recovers from a decade of ambitious building plans that left theater chains with a glut of screens and a load of debt incurred from building state-of-the-art stadium-seating movie houses.

That building spree forced 12 chains into bankruptcy and sparked a consolidation that left three large chains dominating the industry. In 2002, the industry saw its best box office year since 1957, success that's expected to continue this year with the release of several expected blockbusters, including two Matrix sequels, Terminator 3 and the last installment in the Lord of the Rings trilogy.

The cyclical nature of the business, however, has forced theater owners to seek new ways to make money.

"On average, we operate on slim margins. ... Finding other ways to supplement that revenue base so we can keep ticket prices affordable is an important part of the business plan of our members," said John Fithian, president of the National Association of Theater Owners.

Advertisers also are looking for more ways to get their messages in front of consumers. A proliferation of broadcast and cable channels has splintered audiences, and new recording devices allow people to skip commercials.

"From Regal's perspective, they have an attendance level of 200 million plus. Nearly 70 percent of the U.S. population goes through their doors in a year," said Kavir Dhar, an analyst for Jefferies and Co. "If you're an advertiser, that's something that makes you stand up and take notice."

While such advertising has been commonplace in European theaters for years, Regal and other chains run the risk of angering moviegoers by showing too many commercials.

Last month, a Chicago English teacher filed a lawsuit against Loews Cineplex for showing advertising after the lights go down. The suit claims the practice is deceptive because it delays the advertised start of the film.

The suit, which is pending and seeks class-action status, asks that theaters state films' actual start times in their advertisements or pay up to $75 per patron as "lost time" damages. Loews dismissed the lawsuit as "ludicrous."

 

It doesn't say it outright in this article, but Regal has talked about how these particular ads will start before the movie showtimes and replace the slide ads that currently inhabit the pre-movie time.