posted 05-05-2011 08:09 PM                

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Here's why you no longer see so many of those high-testosterone Army National Guard recruitment ads in movie theaters before the trailers: It's due to budget cuts in Washington -- and the National Guard doesn't need to hunt for applicants in this anemic economy. "A lot of people go into the military because they can't find jobs in the private sector," National CineMedia CEO Kurt Hall told Wall Street analysts Thursday to help explain why 1Q earnings were so disappointing at the No. 1 seller of movie theater ads. The company reported a net loss of $1 million, down from a $1.2 million profit in the same period last year, on revenues of $59.1 million, down 12.8%. Hall warned that the business is in for more turbulence, even though movie theater owners expect to fill seats this summer and TV networks predict robust ad sales in their upfront market. Japanese auto and consumer electronics companies are among the biggest advertisers in theaters, and they don't know whether they'll have enough parts to meet their production goals following the country's earthquake and tsunami. "They don't want to spend a lot of money (on movie theater ads) if their products aren't going to be in the stores or dealerships," Hall says. The lost advertisers are hard to replace. National CineMedia says it only has about 300 national clients. But he had some encouraging news for investors, although not necessarily for moviegoers: The company is starting to sell a lot of pre-movie ads to insurance companies.

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