No more free passes for movie makers

Theaters making studios pay for trailers

Los Angeles TimesFebruary 26, 2013 

Coming soon to a theater near you: a multimillion-dollar battle over coming attractions.

Theater owners are squeezing extra coin out of film companies by charging them to play the trailers for their upcoming movies.

Traditionally, theater owners were happy to run the advertisements for upcoming movies on the understanding they drove box-office receipts and concession-stand sales. Studios paid to make the trailers and cinemas screened them. Each movie came with two coming attractions attached, while others ran at the discretion of the theater, often as a result of lobbying by Hollywood marketers.

But now theater owners, realizing the value of having Hollywood's target audience already in the theater, have begun charging movie companies to run their trailers.

"We've reached the tipping point," said Jeffrey Neuman, chief executive of Verites, a Burbank, Calif., company paid by studios to check theaters to see that trailers are being shown and marketing materials such as lobby cards and standees are in place. "If you're not one of the ones paying for trailers, you're left struggling for placement."

In one controversial move, the nation's largest cinema chain, Regal Entertainment Group, recently cut the number of trailers that studios can run with their own movies for free from two to one.

"It's logical a theater operator has an obligation to market studios' movies, when we're spending hundreds of millions of dollars on (making) each one," said one studio executive who asked not to be identified because of the sensitive nature of the topic. "But they have gone all the way around to wanting to be paid."

Four of the major studios — 20th Century Fox, Sony Pictures, Universal Pictures and Warner Bros. — reportedly have made annual marketing deals worth several million dollars with theater chains such as Regal and AMC Entertainment. In exchange, the studios are exempt from the one-free-trailer-only rule and get the best possible placement.

Walt Disney Studios and Paramount Pictures don't have such deals, while smaller studios may pay as much as $100,000 to play a trailer for one film.

Large theater chains won't publicly acknowledge that they charge for trailers, nor will the studios that pay them. Spokespeople for Regal and AMC declined to comment, as did representatives of Cinemark Holdings Inc. and Carmike Cinemas Inc., the next largest national cinema chains.

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