AMC Theatres to run even more ads before movies play after holding out for years amid financial struggles
AMC Entertainment Holdings Inc. has agreed to run more advertising in its theaters, ending its yearslong opposition to commercials that come right before each movie.
The largest US theater chain, AMC reached an agreement with National CineMedia Inc. to run the spots, according to a statement Tuesday. National CineMedia owns and operates an ad network in major theater chains, including AMC, Cinemark Holdings Inc. and Regal Cinemas.
Starting July 1, AMC theaters will feature a 'platinum spot' that's shown on screens right before the start of a film. The theater chain, which has struggled financially, will get a cut of the ad sales, receiving what it described as 'vital revenue.'
Shares of National CineMedia rose 4.8% to $5.29 at the close in New York. AMC was down 3.2% to $3.33.
Almost six years ago, AMC was the lone holdout among major theater chains when National CineMedia first introduced the new ad spot, predicting at the time that 'US moviegoers would react quite negatively.'
'While AMC was initially reluctant to bring this to our theaters, our competitors have fully participated for more than five years without any direct impact to their attendance,' the company said in an email Tuesday.
Officials with National CineMedia said they had no immediate comment.
Movie fans have long been accustomed to stretches of ads that run before the lights go down and the coming attractions start to roll. In 2019, National CineMedia introduced an ad that comes during the trailers, with its CEO Tom Lesinksi telling analysts it would be 'one of the most attractive spots in media.'
Lesinski said at the time that National CineMedia was in talks with AMC about introducing the ad spot, but AMC countered that the companies weren't in discussions and 'didn't envision entering into such an arrangement with NCM anytime in the foreseeable future.'
On its website, AMC advises fans 'there are approximately 20 minutes of preshow material, including trailers, between the published showtime and the start of the feature film.'
In its first quarter financial report last month, AMC said the industry experienced the worst start to a year since 1996, excluding the COVID-19 health crisis.
The box office has bounced back in recent weeks thanks to a record performance during the Memorial Day weekend.
To stoke midweek sales, AMC is offering 50% off regular ticket prices on Wednesdays starting July 9.
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