UK cinema circuits set up new screen ad venture

Source: Screen Digest from SAWA Newsletter

 

It looks like the end of the road for UK cinema screen advertiser Carlton Screen Advertising (CSA), following

a sell-off to a new venture established by two major UK cinema circuits. Odeon and Cineworld have joined

forces to launch Digital Cinema Media (DCM), a new company based on the proposed acquisition from

CSAowner broadcaster ITV of ‘certain assets’ from the screen advertiser. ITV has picked up £500,000 ($1m) in

cash for these assets. The proposed venture is now awaiting competition clearance, which is likely to happen

before the end of summer 2008. CSA will continue trading until that takes place. Payments to CSA and the

new venture will be on a revenue-share basis. Renegotiated deal between Cineworld and CSA will also be

terminated with creation of new company.

 

This move is a bold one by two leading cinema circuits and will change the dynamics of the sector

in the UK if approved. Previously, cinema circuits were not in control of the on-screen advertising,

preferring to leave that to stand-alone companies and to pick up a split of the revenues. However,

the sector’s economics have degraded in recent years and to have an exhibition controlled sales arm

may now be the best way to make the necesary margins. The owner of Pearl & Dean, the other

screen advertiser, is also looking to divest that group but was obliged to give the company a zero

valuation on its books, suggesting that the prospects of a sale are limited. However, this new move

may open up the market again as Odeon and Cineworld can provide only 44 per cent of the country’s

screens, whereas CSA held three-quarters of the screen base. Digital technology will be a driving

force behind its strategy—something that both screen advertisers have so far failed to come to

terms with. DCM aims to offer a more flexible, targeted solution to advertisers.

 

Carlton Screen Advertising: UK; +44/20 7534 6363; www.carltonscreen.com

Odeon: UK; +44/20 7930 6111; www.odeon.co.uk

Cineworld: UK; +44/208 987 5000; www.cineworld.