A Touch of Class: Spotlight Cinema Networks finds niche in theatre advertising marketplace

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Cinemas Features

It’s been a good five years for Spotlight Cinema Networks. Though still a relatively new player in the in-theatre advertising space, since its founding in 2010 Spotlight has become a favored advertising provider for your more upscale, art-house type of theatre. Their recipe for success is a simple one: Find your niche and serve it well.

What sets Spotlight apart from other in-theatre advertisers, says president Michael Sakin, can be summed up by the old adage “Quality over quantity.” A Spotlight program is defined by a lack of advertising clutter. What ads there are are high-end, both in terms of product and production value. Their five top advertising categories are upscale automotives, luxury goods, spirits/beer, travel/tourism and tune-in advertising for television programs. “It’s not about booking and clutter and revenue,” Sakin explains. “It’s smart revenue. It’s revenue that makes maximum impact to the advertisers. [You want to] keep the exhibitor happy with a nice revenue stream, but without customers complaining about over-commercialization of their movie theatre.”

The philosophy that has led Spotlight since its inception is a simple one: Bombard customers with ad after ad, and they’re likely to disengage, pulling out that ever-present smartphone and spending those last few minutes before the lights go down making a conscious effort not to watch ads but to block them out. “Spotlight’s main purpose is to find the happy medium between the exhibitor, the advertiser and the actual consumer,” Sakin elaborates. “If you [advertise] in the correct, classy way—minimal advertising but in the most effective environment—it will achieve everything that everybody wants. The exhibitor doesn’t upset their audience, the advertiser gets maximum impact from their ads, and the consumer will be shown some really beautiful, creative ads with products that they care about.”

Spotlight also programs short films through their partnership with DC Shorts, one of the nation’s premier short film festivals. And the ads themselves are getting more and more sophisticated. Sakin highlights the output of alcohol and spirit companies, in particular: “They are creating more and more content that is more like movie shorts than ads. They’re looking for platforms to get these longer-form, 60-, 90-second [ads] in front of adult audiences. And cinemas—specifically Spotlight, because we are so skewed to the adult audience and we don’t attract teenagers—have really become the perfect marketing venue for them.”

Over their first five years of operation, Spotlight has gone from being the little guy on the block, attempting to carve out a niche for themselves alongside Screenvision and National CineMedia, to a company that higher-end advertisers have come to trust. Spotlight currently operates in 200 venues and 825 screens across 95 exhibitors, up from the “little over 400” screens they started out with. The growth shows no signs of slowing down, either; Spotlight’s revenue from the fourth quarter of 2015 was the highest in their history to that point. “We have grown each year, and part of that is because there are more and more advertisers coming to us. We’re really in a fortunate situation being so niche that we are kind of living in our own marketplace,” Sakin observes. “For the most part, our advertisers are unique to us… [they] keep coming back, because they realize that we’re not just a cinema platform, we’re a video platform that specializes in the upscale luxury space. We’re not defined by cinema. We’re defined by the niche audience we bring to the table.”

But advertisers and consumers aren’t the only ones Spotlight has to please. The company prides itself on the way it works with exhibitors to provide custom content that doesn’t look generic. Exhibitors can decide to go with a preshow, a three- to five-minute “trailer pod” that runs after the lights go down but before the trailers start, or both. “Each exhibitor is part of the Spotlight family. We really earn their business and work with them. They always have the final say to accept and reject anything,” Sakin explains. “Internal promotions, announcements and exhibitor information” can be integrated into preshows, as can ads for important cultural events in the area, like film festivals or art shows, if the exhibitor “wants to embrace the local community a little bit more… We are flexible enough to take out some of our content market by market and customize it to the exhibitors’ needs and desires.”

Sakin highlights Spotlight’s work with “mom-and-pop art houses across the country,” many of whom receive “a significant part of their revenue stream” from Spotlight advertising. “I’m so proud that exhibitors stay with us. Once they come onboard, even if they’re skeptical about advertising, they recognize that we are a really nice revenue stream but will not offend their customer and will not hurt their business from a customer satisfaction point of view.”

Customer satisfaction is a key concern in everything Spotlight does, including their forays into smartphone technology. In an era when increased phone and tablet usage means keeping customers’ attention is more difficult than ever before, Sakin notes that Spotlight actually has a pretty good relationship with tech. “We really try to understand the consumer and give them either a platform to use their phones when there is nothing on the screen, and then pay attention when the lights go down”—relevant for the 80 percent of Spotlight venues that run a trailer pod but no preshow—“or, with the preshow, give them something that’s pure entertainment that makes them want to put down their phone and enjoy a movie short.”

In early 2015, Spotlight embraced technology more fully by launching CineLife, an app targeted at indie-minded film enthusiasts. In January 2016, another piece was added to the puzzle when Spotlight partnered with The Tone Knows, a marketing and technology platform that embeds a silent tone (or “audio beacon”) into advertisements. Any audience members with the CineLife app open on their phone will receive an alert about the product in question after they’ve left the theatre; they don’t have to do anything, nor do the exhibitors.

Sakin is very careful to note that the entire procedure in no way invades the sanctity of the moviegoing experience, which is a major factor in why Spotlight partnered with The Tone Knows in the first place. “Personally and professionally, Spotlight wants to see the pure cinema environment stay true to what cinema is, and that’s not really encouraging the use of smartphones,” he observes. “But we always stay in touch with technology, and we felt that The Tone Knows is the first foray that makes sense for us. The reason for that is that it doesn’t cause or require an interaction in the theatre at the time… We can delay the message by two, three hours, whatever we choose. So it’s the way to take the message from the big screen and bring it to handheld devices without taking away from the cinema experience.”

That unobtrusive nature is good for everyone: Exhibitors, who don’t have to contend with a rash of cellphone usage; advertisers, who aren’t fighting with consumers’ phones for their attention; and consumers themselves, who in Sakin’s words won’t be “bothered while they’re in the cinema, when they want to have their escapism and enjoy the movie.”

Though exciting, Spotlight doesn’t view these experiments with smartphone technology as an integral part of their business model going forward. As Sakin notes, it’s “going to be something that we always need to keep in our portfolio of products...but I don’t ever see it being more than just a piece of the puzzle.” That’s because Spotlight’s emphasis on providing a quality in-theatre experience has served them well over the last five years, and there’s no need to mix the formula up for the next five, or beyond. “We have these conversations constantly: Who do we want to be? And the truth is, we want to stay true to who we are, and we are and will stay laser-focused on the upscale and art-house audience. It is a niche. They need to be served.”