posted 03-22-2004 02:46 AM                    

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Coming soon to area theaters: more advertising

Tony Quesada
Staff Writer

JACKSONVILLE -- As Renee Reed waited in the concession line at Southside's Tinseltown movie theater on a recent Friday afternoon with her 11-year-old daughter, she didn't have to wait to be sold to.

Above her one of a dozen or so televisions showed not only the latest movie trailers but also commercial messages for products, including the popcorn she was already in line to buy. Being part of an increasingly coveted audience for advertising is something to which Reed, 45, a Southside resident and mother of three, has become accustomed.

"I just accept [advertising] as part of coming to the movies," she said.

That's good news to Clarke Mazza, CEO of Jacksonville-based Pot O' Gold Cinema Productions, which sells advertising time on movie screens and in-lobby video screens in 35 states, Mexico and the Caribbean. Mazza touts cinema advertising, particularly on-screen advertising, as a way to reach a captive audience.

"They can't turn it off," Mazza said. "They're not going anywhere. And it's bigger than life."

With about $1 million in gross annual revenue, Pot O' Gold has a small but growing presence in a $300 million industry projected to reach $2 billion by 2008. Such growth would be in line with what already has been experienced in Europe, where movies are preceded by about 15 minutes of on-screen advertising compared to three to four minutes in the United States.

According to Screenvision, one of the top three cinema advertising sellers, about 70 percent of the nation's 36,000 movie screens show some form of advertising -- a percentage that promises to rise rapidly. The industry has grown so much that the three biggest companies -- Screenvision, National Cinema Network and Regal CineMedia -- joined efforts last year to create a new national trade association, the Cinema Advertising Council, which Pot O' Gold plans to join soon. Together, the founding companies command more than 70 percent of the cinema advertising market.

Meanwhile, Pot O' Gold has been expanding its market share through a series of recent agreements, acquisitions and a strategic joint venture. A year ago, Pot O' Gold entered into an agreement with Cinemark USA Inc. to provide digital advertising for concession and arcade-area monitors in selected Cinemark theaters nationwide. And a recent deal with Metropolis Theaters brings Pot O' Gold's reach in Mexico to 20-plus theaters with more than 120 screens, plus in-lobby advertising rights.

Perhaps the most promising development, however, is Pot O' Gold's 2-month-old joint venture with Limelight Media Group, a Memphis, Tenn.-based company that has created a digital media management system able to simultaneously deliver digitized video content -- entertainment and advertising -- to a variety of locations. Under the joint venture, Limelight will install and manage the delivery network, and Pot O' Gold will market the revenue opportunities created by it.

"Why are we both spending money developing the same product? There's so much business out there, there's no reason to beat each other up," Mazza said, adding that the two companies complement each other.

David Lott, founder and CEO of Limelight, agrees. His company has the technical expertise to streamline cinema advertising, he said, but it realized it lacked the relationships with theater owners needed to build a national network.

"We provide structure, and Clarke [Mazza] is providing advertising sales and marketing," Lott said.

Most of the on-screen advertising sold by Pot O' Gold is in two forms: rolling stock, film that must be spliced onto the beginning of each movie reel; and slides, static ads that show for several seconds at a time. Both formats must be delivered by mail or courier to every theater. But the Pot O' Gold-Limelight joint venture is seeking to replace those media with digital video that can be delivered electronically and updated remotely.

"Digital gives us the capability to save on operations and delivery," Mazza said.

The joint venture plans to apply the same technology to in-lobby advertising, which Lott said is the fastest-growing segment within cinema advertising. About 20 percent of theaters have in-lobby video programming, and most of that is used for trailers and for ads on a limited basis, he said.

"The market will grow as it becomes digitized and it becomes full-motion video," Lott said.

To get in on that, Limelight has contracted with MPH Entertainment to produce 22-minute entertainment-oriented programs that will be interspersed with eight minutes of advertising and shown digitally in theater lobbies beginning April 1, Lott said. After that, the goal is to bring those programs to the screen before each movie, he said.

The joint venture also plans to expand its product to other venues where people have to wait, such as at banks and stores.

"The captive audience market is good anywhere there's a line of people," Lott said.

One aspect of cinema advertising that its proponents say can't be matched by television advertising is the ability to target an audience geographically. Most movie patrons tend to live close to the theater they're attending -- within seven miles, according to Pot O' Gold. It reasons that those looking to focus their messages to a specific geographic market and eliminate wasted advertising can do so.

That's what attracted Jim Linn and Carole Davis, co-owners of ERA Davis and Linn Real Estate, to cinema advertising.

"It targets the market where we do business," said Linn, whose 28-year-old business has been buying on-screen slide ads for 15 years. "Theaters can give you a head count of how many people come to that theater. We can target the money we spend on advertising."

Linn calls it a form of institutional advertising whose effectiveness became evident after about 18 months.

"People would stop us on the street and say, 'Your face looks very familiar,' " Linn said. "Then they'd say, 'Oh yeah, you're the real estate people on the movie screen.' "

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posted 03-24-2004 01:21 PM                    

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"They can't turn it off," Mazza said. "They're not going anywhere. And it's bigger than life."

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BAH! What arrogance! I have a mind to drive up to Jacksonville and flick this guy off.

Ads in the lobby are somewhat tolerable but KEEP THEM OFF THE BIG SCREEN!

We have the Pot-O-Gold system installed in the lobby, except they send us CDs instead of it being connected to the network. Trailers seem VERY low resolution. Has anyone seen the large-screen ads? Do they compare (read: are as bad as) with the Regal T20wenty?

=TMP=