Studios Decry Cinemas’ Ad-Filled Preshows As AMC Warns Of “25-30 Extra Minutes”: Here Are The Consequences For Movie Biz

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There’s a lot to celebrate this July 4th, read the continued hum of the box office with a $137M-plus opening for Jurassic World Rebirth and even Joey Chestnut’s 17th win at the Nathan’s Hot Dog eating contest.

But for movie studios, it’s not all fireworks as No. 1 circuit AMC is jumping on the bandwagon with No. 2 and 3 rivals, Regal and Cinemark, to run more non-Hollywood commercials before an actual movie’s start.

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Even worse, the studios have recently discovered that AMC is providing notice to their ticket buyers to “Please allow 25-30 extra minutes for trailers and additional content before the movie starts”. The Leawood, KS based chain has been running that disclaimer since 2017, however, they recently tweaked the notice and made it more prolific. The ad-warning can also be seen if one hovers over a ‘?’ mark on the circuit’s showtimes page, and the message also reappears during checkout.

Studios execs have an enormous bee in their bonnet over this latest disclaimer, and AMC’s agreement to run more ads has just become a tipping point for a practice that Regal, Cinemark and Marcus have been practicing for quite some time: Running more than 20 minutes of trailers and ads before a movie actually begins. On top of that pre-show that runs after a movie’s posted showtime, the top three chains also air National CineMedia’s Noovie Show, before every posted showtime. Hosted by Emmy winner Maria Menounos, the pre-show, which clocks in just under ten minutes, is a combo of movie trivia, non-industry and local market commercials, the occasional movie trailer, but overall it’s a lot of noise and fluff. So, if you arrive really early to a movie theater, you could be bombarded with the Noovie Show, plus the additional 20-minutes-plus of trailers and non-industry commercials which air after the movie’s posted showtime. Some chains are weighing in with a pre-show that’s as long as 30 minutes.

Studio execs cry that more ads contribute to a less-than premium experience at the movies. Audiences are already paying a premium to leave their house, why then subject them to commercials, which they have the benefit of avoiding on most streaming services?

But there’s a greater concern at play here and that’s that moviegoers are put off by the pre-show to the point that they’re arriving and skipping all the movie trailers — one of the most powerful forms of studio marketing for a title. Quite often, PostTrak audience exits cite that in-movie trailers are the most influential forms of marketing to a moviegoer, read a majority of moviegoers at 22% said the in-theater trailer for Mission: Impossible – Final Reckoning convinced them to buy a ticket, ditto for F1 (18%). It was also a big reason for those who watched Lilo & Stitch (14%) in addition to social media (19%) and buzz from friends and family (16%) about the film.

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“If a tree falls it the woodsandthere’s no one around to hear it, what if a trailer plays in a movie theater and no one sees it? What good does it do?” Sony Motion Pictures Group Chairman & CEO Tom Rothman tells Deadline.

In the wake of AMC’s decision to run more ads, studios have their own scouts out in full force measuring the length of pre-shows, and observing attendance for such trailers prior to a movie actually hitting the screen. Some studios actually pay in the hundreds of thousands of dollars for trailer placement for a movie, while other majors wrap up their trailer bookings in a broader marketing agreement with a circuit. At the end of the day, it’s about CPMs for a studio, and what the reach of their trailer is for the money they’ve ponied up.

One rival studio recently measured the attendance during a pre-show for Sony’s 28 Years Later at a Chicago AMC theater and found that during a 30-minute pre-show (after the movie’s listed showtime), only 20% of the audience were in their seats at the start of showtime to watch trailers. By the 12-minute mark after the listed showtime, 70% of the audience were in their seats. The auditorium didn’t reach full capacity until a minute before the movie actually started.

“It’s incredibly self-defeating andshortsighted. Since the beginning of the movie business, the single best inducement to see movies is trailers in movie theaters. And now, nobody sees them,” adds Rothman.

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Some executives say that the best trailer policy was enforced by the old Arclight Cinemas which would only show three to four before a movie’s start. At the same time, all of the studios jockey the circuits for more trailer-run time. A moviegoer can easily find themselves watching ten trailers, a consumer commercial ala Coca-Cola, and a circuit intro/silence your cell-phones bit before a movie’s title logo actually appears on the screen.

With box office in continued rebuild post Covid and strikes, the reasons for circuits, especially the near $4 billion debt strapped AMC, taking part in more ads makes financial sense from their standpoint: They can’t survive on movie rentals and concessions alone.

“With the box office as weak as it was back in February when we made the decision, we could no longer afford to pass up the funds that we were offered to do now what has become standard practice by our largest competitors for more than five years,” AMC Boss Adam Aron tells Deadline.“The alternative to take in the same monies Cinemark and Regal have been getting for years would have been to raise our ticket prices substantially — which would not have generated press coverage but certainly would have been unpopular with our guests,” Aron adds.

The data on pre-show trailers and ads go against not just exhibitors’ wishes, but studios’ as well, even though according to a February NRG study, 69% said they enjoy watching trailers before a movie.

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The same study reported that 36% “intentionally arrive at the theater later than the posted showtime to skip ads/trailers”.

The NRG findings further underscore that moviegoers prefer ten minutes or less of trailers to play ahead of the movie. At the same time, 47% said that “advertisements before the movie makes the movie experience feel less premium.”

Exhibition sources tell us that that there isn’t any hard data out there which shows that non-movie ads are curbing attendance, impacting revenue, or preventing non-frequent moviegoers from coming back. AMC did issue a statement when news leaked four weeks ago about their taking on the additional platinum spot in the pre-show that there was “a strong indication that this NCM preshow initiative does not negatively influence moviegoing habits.”

Note that studios’ pearl-clutching over non-movie ads is nothing new, and it’s been creating ire between Hollywood and movie chains for years. Back in the late 1980s, there were reports that a simple Coca-Cola ad running before the Tom Cruise Born on the Fourth of July created upset with moviegoers. In 1990, Disney’s Head of Distribution, Richard Cook, made an edict that the studio would no longer allow commercials to run before any Disney, Hollywood Pictures, or Touchstone theatrical release. During the early 1990s, I was a college intern in New Orleans, LA with the Buena Vista College Network. In addition to spotting audiences reactions to their new movies on a Friday night, we also had to inform Burbank, CA HQ whether any non-movie ads aired before an actual Disney release. It was a big deal. During my annual internship, there was at least one time when a Coca-Cola ad ran before a Disney movie at a United Artists Theater that I was covering in Kenner, LA.

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Wait a second — if studios put the kibosh on ads back then, why did they ease up? Sources tell us that the bankruptcy of chains around the start of millennium forced studios to look the other way.

So, how does the industry solve this pre-show ad problem?

It’s not easy. But interestingly enough, it’s another push-and-pull in studio and exhibitor’s ongoing haggling; circuits’ lobbying for longer windows to the majors’ desires for a shorter pre-show. Studio sources tell us they’re going to look closer at their broader marketing agreements with exhibitors in order to achieve a more efficiently timed and wider reaching preshow. In studios’ minds, they’re putting forth their best marketing with in-theater trailers, and the audiences aren’t around to watch them. It’s counterproductive in encouraging people to go to the movies again.

We heard that back in the day, 20th Century Fox had a clause in their contracts with movie theaters that if any non-trailers were shown before their releases, they’d get a cut of the ad revenue. Such terms would require consistent policing by the majors.

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But there’s a bigger obstacle when it comes to fewer ticket buyers watching trailers before a movie, and it’s the whole perk of reserved seating, a theater practice that has been in place for at least a decade. Why rush to the movie theater when one has a guaranteed seat? Will studios argue for less reserved seating at showtimes?

Still, the majors are adamant on shorter pre-shows, and the most eyeballs for their trailers.

Says Rothman, “This isn’tjustan AMC problem, this is industry wide.”

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