Media Buyers Are Confident in Cinema as It Reopens

One of the major sectors most affected by the year-long Covid-19 pandemic has been cinemas—an experience of escapism that has been disrupted perhaps irrevocably. Earlier this week, international cinema chain Cineworld Group said it lost £2.2 billion ($3 billion) in annual earnings over the past year, while its 5,500 workers in the U.K. remain on furlough during the closure of its theaters. But last month, as it announced it was set to reopen its 127 British theaters in May, Cineworld also revealed it agreed on a deal to show Warner Bros. movies across the U.S. and U.K., including such titles as Mortal Kombat and Godzilla vs. Kong. In response, Karen Stacey, the chief executive officer of the U.K.’s largest cinema advertising firm DCM, reaffirmed her confidence in the future of the sector to Adweek, alongside other media buyers. She said people are eager to experience cinema and social activities again. “Distributors continue to believe in the power and benefit of the theatrical release,'' she said. "This is evident as only a handful of titles have gone straight to streaming and most films have been postponed, meaning there is an exciting pipeline of films awaiting cinemagoers." Back to the future “Cinema’s impactful contribution to advertisers’ campaigns is also arguably stronger than ever, and advertisers are rallying around the cinema medium,'' Stacey said. "We have had some exciting conversations with our customers and seen great demand from brands looking to take advantage of cinema’s immersive, distraction-free environment.” The deal, which includes Cineworld's U.S. subsidiary Regal, also has an agreement that a 45-day window of theatrical exclusivity prior to appearing on video on-demand channels will be upheld, with “certain provisions” included. In October, Cineworld confirmed the temporary suspension of its cinemas as a result of restrictions introduced in the U.K. to combat the spread of Covid-19. As a result, advertising revenue has suffered alongside ticket revenue. Those losses have been compounded by studios such as Disney moving film premieres like Mulan and Soul to streaming platforms. Cinema advertising spending in the U.K. amounted to £45.7 million ($63.3 million) last year, an 80% decline from the previous year, according to database company Statista. The new multiyear agreement is a sign of hope for an industry that's seen theaters forced to remain shut for most of the past 12 months, putting on ice major releases such as the next James Bond and Ghostbusters. The health and safety of customers, staff and communities would be a priority when reopenings begin, Cineworld CEO Moshe "Mooky" Greidinger said in announcing the deal. As capacity restrictions ease to 50% in many U.S. states, the company is also monitoring developments in the U.K. and Europe and preparing plans to "gradually reopen'' across the world, taking into account local restrictions. Cautious optimism "We continue to take all the necessary precautions and abide by our CinemaSafe guidelines to confidently provide a safe and comfortable experience," Greidinger said. As media agencies prepared for the theater reopenings, there is "cautious optimism" and "real excitement," especially for the fourth quarter's lineup of potential blockbusters, said Jessica Evans, one of Dentsu Inc.'s managing partners for delivery. While concerns for safety are paramount, there should be confidence among audiences and advertisers around reopening plans. "We are talking to our clients about all of this," Evans said. "We have clients for which cinema has always played a really important part of their communications mix, and we have been engaging closely with them on how best we will manage the return of cinema into our communications plan." Even so, Lee Lythe, the chief investment officer for Publicis Media's Spark Foundry, said advertisers will likely take a more cautious approach because of the potential for changes in restrictions that may force cinemas to close again and uncertainty as to whether audiences would return. "For those brands that have held back budgets for the start of the year, I'm confident cinema will remain an integral part of their media plans'' for the third and fourth quarters as lockdown-weary movie-goers "flock back'' to reopened cinemas that have social distancing measures allowing for audience safety, Lythe said. Last October, the Advertising Association/Warc Expenditure Report predicted a strong increase in cinema ad spending (138.3%) during 2021, once theaters reopen. In March, Disney announced the two-month delay of its already held back Marvel entry Black Widow and Cruella, a live-action prequel to 101 Dalmatians, with both now set to premiere on its Disney+ streaming platform the same day they open in theaters. Walmart Wants to Salvage Summer With Drive-In Movie Theaters and Virtual Summer Camp

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Media Buyers Sound Confidence in Cinema Sector Before Silver Screen Reopenings

As theaters unlock doors, there remains uncertainty over audiences returning

Stephen Lepitak

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Stephen Lepitak