Cinema ads suffer slowing growth

Mon Jun 15, 2009 2:45am EDT
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By Paul Bond

LOS ANGELES (Hollywood Reporter) - Revenue from advertising in U.S. movie theaters grew just 5.8 percent last year, marking the slowest gain in the seven years that such statistics have been kept.

Still, the Cinema Advertising Council, which is expected to release its 2008 report Monday, can boast of an ad industry still showing growth while most others are not.

"Media has seen such huge slippage -- with audiences and advertisers both leaving -- that to have a medium with growth is significant," CAC president and chairman David Kupiec said.

According to the CAC, cinema advertising in the U.S. grew 5.8 percent to $571 million in 2008, down from 19 percent growth the previous year and 15 percent the year before that.

The CAC has been keeping track of revenue generated by the industry since 2002, when the industry took in just $186 million. Since then, it has grown at an average clip of 21 percent each year.

The CAC measures ad dollars from onscreen and other in-theater initiatives but only at member theaters, which account for 82 percent of U.S. movie screens.

Kupiec said that this year theaters are closing more ad deals than last year, but, because of the weak economy, they are smaller in size.

(Editing by Dean Gooodman at Reuters)