Ask Scott Felenstein, chief revenue officer at National CineMedia (NCM), what date he was most looking forward to this year, and he answers September 3.
That's when movie theaters around the country, shut down since mid-March because of the coronavirus pandemic, finally reopened with Tenet, Christopher Nolan's long-awaited espionage caper. It scored an encouraging figure at the box office as the 3rd highest grossing film on a Labor Day weekend ever, despite the fact that the two biggest movie markets – New York and LA – were still closed for business and social distancing rules reduced theater capacity elsewhere. But when those cinema houses welcomed audiences back, NCM, the top seller and supplier of in-theater advertising messages, welcomed those crowds back as well.
"We're excited that the day is finally here when we can get back to the movies," Felenstein says. "There's a great slate of content that's scheduled for September, all the way to the end of the year. Then a lot of the films that we were supposed to debut since mid-March are rescheduled for 2021. So 2021 now looks like a tremendous year."
With AMC, Cinemark and Regal, the top proprietors of movie theaters, reopening the majority of their theaters as quickly as possible this fall under industrywide CinemaSafe protocols, Felenstein expects a big snapback for NCM's primary business: presenting ads prior to feature presentations. In 2019, National CineMedia generated nearly $450 million in revenue, and ended the year with the best Fourth Quarter ad sales in our company's history and the biggest year ever for our National Sales team. From April to June 2020, according to the company's latest quarterly earnings roundup (released August 3), NCM had $4 million in revenues, way down from $110.2 million over the same three months last year. Over the first half of 2020, the company had $68.7 million in revenue, compared to $187.1 million at the 2019 halfway mark.
At the time movie theater owners went to lockdown mode, NCM was several months into a restructuring of its Noovie pre-show ad showcase. Introducing new inventory running in 60 percent of its affiliates, commercials could now run in two new premium positions: lights down and platinum. Under the lights down format, five minutes of spots appeared on-screen after the house lights were dimmed at advertised movie showtime, wrapping up with an invitation to turn off mobile phones as a courtesy to all moviegoers. The platinum spot, 60 seconds in length, came on before the second-to-last trailer of coming attractions. Walmart, General Motors' Cadillac division and Google were the initial platinum sponsors of what NCM is calling one of the most valuable and impactful ad spots in the entire premium video advertising marketplace.
Initial audience research on both formats "came back fantastic," Felenstein discloses. "You're already in a very engaged environment (and) you have a highly engaged audience in front of a 50-foot screen, surround-sound…Now the inventory works even better."
Another conclusion of the research: young theater audiences expressed more interest in watching the commercials, in part because they were seeing messages crafted to take full advantage of in-theater display. Walt Disney's messages, for example, highlighted their theme parks or cruise line excursions. A WarnerMedia campaign consisted of behind-the-scenes activity with upcoming programs on TBS, TNT or HBO.
"It feels like great content because it is great content," continues Felenstein. "It's also getting across a great commercial message. The recall on the platinum spots went through the roof."
Company officials have been working overtime to make sure advertisers like Amazon, Mars, Unilever, Progressive, Ford, AT&T and Heineken were back up on the big screen for Tenet's Labor Day Weekend premiere. As that business gets generated, Felenstein and other top NCM executives are exploring a number of pathways for expanding in-theater revenue, such as programmatic sales, new digital products like NCM's Noovie Trivia app, targeted national ads for specific audience demographics and expanded local advertiser opportunities. The way NCM sees it, Noovie is a fully integrated suite of products designed to innovate the moviegoing experience in ways that help brands tap into the excitement, emotion, and magic of the movies.
"This is a good time, maybe, to reset everything," understands Felenstein. "We're looking at all aspects of our business. Are our formats as engaging as they could be? Are there other ways, new ways, that we could get brands involved with reaching movie audiences that we haven't worked with before? Are we doing the best job we can?"
Branded content looms as one promising opportunity in Felenstein's mindset. "There's definitely an appetite for brands to want to do that. What better place to do that—the big screen—when you've got a captive audience in a captive environment watching the best storytelling medium anywhere?"
NCM's effort to capitalize on that opportunity is Noovie Studios, the company's custom content unit focused on connecting brands with movie audiences. Campaigns have included Hyundai's What Drives You? which featured top actors and directors discussing what motivates their work. CNN chose to collaborate around Name That Movie, NCM's on-screen and digital gaming app adapted from the classic TV show Name That Tune, to create a co-produced gaming experience around the channel's miniseries The Movies. Brands can also integrated with NCM and HQ Trivia with their new Movie Trivia Night every Wednesday night.
Geared toward a core audience of Gen Z and Millennial movie fans, NCM's Noovie offers exclusive content and unites brands with the power of movies anytime and anywhere. In a pre-COVID-19 interview, an NCM executive commented, "Noovie is a brand that has a personality, a point of view, and provides value and relevance to our consumers, so much so that brands want it to rub off on them as well. The second key piece is to build engagement. We already benefit from some of the highest engagement metrics in the industry. We want to make sure that we deliver a fully engaging show, with people interacting in a meaningful way with content and brands on the big screen and beyond."
Photo courtesy of Cinemark
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