Less than a week after denying bankruptcy rumors that caused the stock price of French conglomerate Thomson SA to plummet 15%, the company has moved aggressively to sell off its cinema advertising unit Screenvision. Industry chatter that the Thomson subsidiary has entered talks to merge with its chief competitor, National CineMedia (NCM), may turn out to be more than just rumor and speculation. That is if you believe USA Today, which published a story about the potential merger on Monday.
A merger between Screenvision and NCM seems unimaginable, if not impossible, given the two firms majority share of the North American cinema advertising business. Surely there will be some regulatory group that will object to having only one company control most of the profitable advertising placement in the country’s leading movie theatres. This issue didn’t escape USA Today either who quoted Lazard Capital Markets Analyst Barton Crockett as saying:
“I’m not sure that (a combination) is possible from an antitrust perspective. It would affect some advertisers, studios and independent theater chains that like to play those two (companies) against each other.”
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John Fithian of NATO
These days, with the global economic crisis at full force dominating headlines, it seems mainstream media will jump on anything that even smells like positive news. So, it’s no wonder with North American box office earning a billion dollars in January and an additional US $800 million in February that media outlets would break their tradition of only covering box office grosses on Monday mornings in favor of feature stories about how moviegoers have returned to theatres.
A spate of articles in various publications was kicked off on February 25th by Andreas Fuchs’ Film Journal piece in which John Fithian, president of the National Association of Theatre Owners (NATO), holds forth in a “state of the industry” interview. A good portion of the lengthy piece is devoted to the current state of the digital cinema transition, which Fithian still believes will heat up in 2009 despite any financial woes. Fithian then goes on to describe the exhibition industry as being “recession-resilient” though stopped short of calling it “recession-proof”:
“The cinema is a relatively inexpensive way to be entertained. If people don’t have money to go on a big vacation, they take a mini-holiday at their local movie theatre. So the environment of challenging times is generally good for us, but that doesn’t mean it always works. You need to have good movies. People are not going to escape the burdens of the day by going to see a bad film.”
While U.S. box office set an all time record in 2008 with US $9.79 billion in grosses, Fithian points out that admissions were actually down 2.5% Read More »
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