Coming Distractions

Kim Johnson goes to the movies to escape reality. So the Irvine High School senior doesn’t appreciate it when a soda company or automobile manufacturer commandeers the silver screen to make a sales pitch.

“I don’t like commercials because I feel [advertisers] are just trying to make more money off of you,” the 17-year-old said. “I just try to tune them out.”

But it will keep getting harder for movie fans to tune out the growing presence of advertising. The exhibition industry--seeking additional sources of revenue amid the financial woes of several major players--clearly sees full-motion commercials playing on the silver screen as a relatively untapped gold mine. Movie theater operators are courting major marketers that, for the most part, have yet to buy into the concept of using the big screen to deliver commercials in Panavision and Dolby sound.

Hollywood traditionally has resisted sharing the movie screen with commercials, but only a few studios, including Walt Disney Co., still are grumbling. John Fithian, president of the National Assn. of Theatre Owners, describes remaining opposition as “hypocritical” because Hollywood films regularly run in European theaters where commercials are commonplace.

More than half of the nation’s 35,500 movie screens display some sort of advertising. Low-tech slide projectors that beam messages from community colleges, hair salons, restaurants and other local advertisers are believed to generate half of the theater industry’s advertising revenue.

Movie theater operators are augmenting slide-show revenue with audio advertising mixed in with movie soundtracks playing before the house lights dim, as well as advertising on popcorn tubs and soda cups. Some area theater chains have struck deals to run commercials for the Los Angeles Times and other regional advertisers.

Theater operators and a few commercial networks hope to build upon early success with cola companies and auto manufacturers and persuade other free-spending national brands to run their commercials on theater screens.

Exhibitors are confident that moviegoers will sit still for three minutes of advertising without getting antsy or irate. Some executives say the total could rise to more than four minutes during the winter holiday movie season and Memorial Day weekend, when the industry releases its blockbusters.

Demographics clearly are the driving force behind the commercial assault. Moviegoers who’ve bought tickets, snacks and soft drinks have signaled their willingness to spend--something that’s not as apparent with consumers who hunker down at home in front of a big-screen television.

“We have a captive audience in a dark room with a 40-foot screen and Surroundsound,” said Todd Siegel, an executive with Screenvision, a commercial network that matches advertisers with theaters. “At home, a guy watches sports with a remote control in his hand, the kids are crying, the dog is barking and the doorbell is ringing.”

Movies also draw a young audience that seems to have developed an immunity to traditional advertising. “It’s under 34 years of age primarily, which is the perfect youth audience for us,” said Steve Sturm, vice president of marketing for the Toyota division of Toyota Motor Sales USA.

Each category of films delivers a different demographic. The recent debut film of singer and aspiring actress Britney Spears, for example, will draw a dramatically younger crowd than a film starring Judi Dench.

“We can get their messages to a target audience because a commercial can be [tied] to a specific movie rating, say, R or PG-13, or even a specific movie title,” said Ray Nutt, a United Artists Theatre Circuit executive.

Movie theater operators say a primary selling point is the focused nature of their advertising venue. Clairol Inc. last summer used movie theater screens to introduce its Herbal Essenses hair-color line because consumers’ eyes are focused on the big screen. The theater introduction worked because “television can be very cluttered, and this allowed us to create great buzz even before the product was available in stores,” said Andrea Davey, brand manager for the line.

Movie screens played a key role in a broad campaign that used print and electronic media to promote Spears, star of Paramount Pictures’ “Crossroads” who had a new album and a concert tour to promote. Commercials on movie screens were augmented by advertising on popcorn bags and a tie-in to a Clairol contest that rewarded consumers with a trip to the “Crossroads” premiere in Los Angeles. Theaters distributed discount coupons that “bounced” moviegoers to record stores, Nutt said.

Initial studies suggest that moviegoers remember what they see on the big screen. National Cinema Network, a subsidiary of Kansas City, Mo.-based AMC Entertainment Inc., last year released a Nielsen Media Research survey that shows consumer recall of movie commercials dwarfs recall rates for television advertising.

Despite exhibition industry research suggesting that consumers are OK with on-screen commercials, the practice has generated a backlash. Portland, Ore.-based Commercial Alert has urged moviegoers to chant “no commercials” when advertisements are running. The consumer group wants theaters to post times that movies begin, so patrons can opt out of viewing commercials.

And not everyone in the exhibition industry is convinced that commercials belong on the screen.

“I may be old-fashioned, but once the lights go down, I think the screen should be held sacred for the moviegoers,” said Dan Harkins, chief executive of Harkins Theatres, which operates 233 movie screens in Arizona.

Harkins, a second-generation theater owner, said he’s forgoing at least a six-figure revenue stream by refusing to screen commercials. He said his stand won’t make economic sense if major chains continue to embrace commercials.

Harkins clearly is the exception. Three chains that entered bankruptcy proceedings--United Artists Theatre Co., Regal Cinemas Inc. and Edwards Theatre Circuit--now are owned by billionaire investor Philip Anschutz, who has signaled his intent to bolster profit from operations, in part through increased advertising.

The industry also is getting a push from commercial networks, including National Cinema Network and Screenvision, a wholly- owned subsidiary of England’s Thompson Multimedia. The networks hope to act as brokers for national advertisers and theater operators.

The commercials apparently are here to stay. Admissions and box-office receipts hit records in 2001, but theater owners say ticket revenue is eaten up by the high cost of renting films. Refreshment counters and coin-gobbling video games no longer are enough, they say, so the industry is counting on advertising to squeeze more profit from movie theaters that the late James Edwards Sr., a theater chain founder, once described as “million-dollar popcorn stands.”

Concession stand profits are being augmented by revenue from slide shows and advertising that appears on audio feeds provided by National Cinema Network and other companies. Revenue also is coming from huge signs being erected in theater lobbies once reserved for colorful “coming attractions” posters.

Toyota Motor Sales USA has used large, two-sided billboards to advertise its new Celica and Matrix models. Clairol handed out promotional material last summer when the company used “Bridget Jones’s Diary” and other films to introduce its Herbal Essences line.

The number of commercials being shown on screen has grown in recent years despite the depressed economy that has stalled overall advertising revenue. Exhibitors say they’re able to charge a premium for on-screen commercials because movie theaters are jammed with younger consumers who are tuning out traditional advertising.

Marketing experts caution that consumers will tune out if the quantity or quality of advertisements isn’t carefully monitored. “There’s a fine line between commercialism and entertainment,” said Toyota’s Sturm.

Commercials that are dull, that use the hard sell or that have run on television won’t click with viewers who use the moviegoing experience to escape reality.

Consumers will have the last word when it comes to truly effective advertising. Carrie Robison, 18, who regularly goes to the movies, offers the ultimate insult to advertisers.

“I don’t really remember what they were about,” she said. “We usually talk when they’re running. It’s like they don’t filter through.”