National CineMedia 2Q sales, subscriptions down

Published on: 2015-02-05

According to MediaDailyNews:

NCM said total revenues grew 3.6% to $86.7 million in the second quarter, compared to the same period last year. This growth rate is sharply down from 46.6% growth between the second quarters of 2006 and 2007. Advertising revenue was down 2.5% in the second quarter of 2008 to $74.8 million, also sharply down from the company's 52.8% ad revenue growth last year.

The percentage of ad inventory used was also down, dropping from 80.8% in the second quarter of 2007 to 66.2% this year.

Our take:

National CineMedia has been a darling of the digital out-of-home industry thanks to years of strong growth and very healthy profit margins.  They managed to prove that only could digital signage advertising be profitable, but that it could do so in a venue where ads were once anathema.  As Kurt Hall, the company's CEO noted, "our original thesis about the migration of media spending to new, more effective digital advertising platforms like ours remains intact," so he clearly thinks that the drop in revenues is more likely a one-time affiar due to broader macroeconomic conditions, and not something that indicates the health of our industry or the business model.  We would have to agree with this assessment.

Subscribe to the Digital Signage Insider RSS feed

Looking for more articles and research? Our newest articles can always be found at Digital Signage Insider, but there are hundreds of additional research articles in our historical articles archive.

You may also be interested in M2M Insider: our blog about M2M and the Internet of Things.