• by Cliff Marks , November 17, 2014

With all due respect, I’d like to clarify some misguided thinking on the merger of National CineMedia (NCM) and Screenvision.

The offering of “NCM 2.0” will be what advertisers have told us they want to buy, not something to be feared. The combination of America’s top two cinema advertising networks will actually be a huge win for brands and agencies, as well as our theater operator partners.

The combined NCM and Screenvision network will offer greater reach (10 A18-49 rating points per week), ubiquitous national coverage, a greater ability to target specific audience demographics, and lower costs for advertisers because it will unify the way they are able to buy and measure our medium, saving them much time and effort. 

Alarmist statements about a single company controlling 88% market share completely miss the bigger picture — there is no such “market” for cinema advertising. Cinema is merely a small part of a much bigger video marketplace. To give a little perspective:

• Cinema advertising represented only .5% of total U.S. national advertising revenue in 2013.
• NCM and Screenvision combined generate approximately $400M of national advertising revenue — the equivalent of a cable network like Spike TV, VH-1 or BET. No one in the advertising business would be wringing their hands over a merger of all three of them. July is one of our strongest months at the movies, and NCM and Screenvision delivered a combined 100M impressions. Sounds big, right?  Well, those 100M impression only represent .2% of the Nielsen-measured impressions in the TV landscape that month, and that doesn’t even include all of the new impressions from the myriad of online video players!

The one thing we can agree on is that video advertisers have other options, but that is precisely why a combined NCM and Screenvision will have no pricing power.

The idea that “one big marketer would have no other places to conduct business” when the merger is complete is laughable. Unfortunately for our sales effort, no brand “needs” cinema to run an effective campaign or to reach any target audience. Of course, we will argue that with our superior content, recall and engagement, cinema is the best and most effective way to reach millennials and other key demographics. But that’s our job as a sales team — just like any other network — and it doesn’t make cinema a market. 

As for the DOJ comments regarding the “fierce” competitive nature between Screenvision and NCM, you can walk into any media company in America and I guarantee you that there will be conversations and emails flying about their competitors’ business decisions. I spent almost 14 years at ESPN prior to joining NCM, and this is nothing new. It is business as usual at a media sales company and will certainly continue after the merger given the competitiveness of the video advertising marketplace.

The media landscape has changed dramatically over the past five years. The merger responds to those changes by building a bigger cinema network with national coverage and better targeting capabilities to provide our clients with the same kind of powerful network that they can buy with television and online video. 

But the DOJ lawsuit, if successful, will actually cause the things DOJ says it is trying to prevent: forcing cinema advertisers to stand still while the competition gets stronger and leading to a decrease in advertising revenue for theater partners.  

Breaking up this deal would be a bad thing for cinema advertising, a bad thing for brands, and a bad thing for theater operators!