Q3 2022 National Cinemedia Inc Earnings Call
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Q3, 2022 earnings conference call at this time, we are assembling today's audience and we plan to be underway. Shortly we appreciate your patience. Please remain on the line.
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Good day and welcome to the National Cinema Media, Inc. Q3, 2022 earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Mr. Dan door and campus director of Finance. Please go ahead Sir.
Good afternoon, I'm joined today by our CEO Tom Lesinski.
Our CFO Bonnie Inc. I would like to remind our listeners that this conference call contains forward looking statements within the meaning of section 27 day of the Securities Act of 1933 as amended and section 21 E of the Securities Exchange Act of 1934 as amended all statements, including our discussion about.
The future impacts of COVID-19.
Other than statements of historical facts communicated during this conference call may constitute forward looking statements.
These forward looking statements involve risks and uncertainties important factors that can cause actual results to differ materially from the company's expectations are disclosed in the risk factors contained in the Companys filings with the SEC. All forward looking statements are expressly qualified in their entirety by such factors.
Further our discussion today includes some non-GAAP measures in accordance with regulation G. We have reconciled these amounts back to the closest GAAP basis measurement. These reconciliations can be found at the end of today's earnings release or on the Investor Relations page of our website at MCM Dot Com now ill turn the call over to Tom.
All right.
Thank you Dan and good afternoon, everyone.
Welcome to our third quarter earnings call.
As the largest cinema advertising network in the U S with 75% of the opening weekend box office. Each week, we have a lot to be optimistic about after five straight quarters of revenue growth and a strong upfront selling season, most of our prepaid debit catheters are now back on the screen.
Our final upfront negotiations are wrapping up and we're happy to report the return of a longtime in same clients across all key categories and many deepening their investment with us.
Today, we're able to prove that semi is one of the highest value medium is for advertisers to reach a young diverse audiences at scale and in unskillful uninterrupted AD environment with the most culturally relevant content in the world on a 40 foot screen people simply crave the shared moviegoing experience.
According to a recent study going to the movies. This summer ranked as a top must see experience with more adults attending the opening weekend of new film releases compared to other popular summer activities, including baseball beaches or even live music events.
Yeah.
Box office has had a strong recovery in 2002 and 2022 on a number of fronts.
The third quarter brought in $1 9 billion at the box office up 40% from the third quarter of 'twenty, One and July was the first $1 billion box office in three years.
Six films reached or surpassed $300 million Mark this year to date, the first time since 2019.
Minions. The rise of grew delivered the biggest fourth of July opening weekend ever aided by the Gen Z demographic.
Top gun Maverick continued to deliver audiences months after its release with the July total of $112 million and crossing the $700 million Mark this quarter once again, proving how important an extended extended exclusive release window.
Can be ski and successful to launching a film and creating long term value.
Yeah.
While there continues to be fewer films released this year than prior to the pandemic Moody's earned about 50% more per film in 2022 versus 2019.
The major releases. This summer earned an average of $159 9 million domestically compared to 130, $103 5 million in the summer of 2019.
Meanwhile, the release schedule was thinner than normal in the latter part of the summer and into early October things have started to pick up considerably with the successful release of Smile Halloween ends black Adam and tickets Paradise.
An early holiday release kicks off with the Black Panther, what kinda forever sequel set to open this coming weekend.
Diverse Genesee and young millennials continue to drive the box office with 104 million 18 to 34 year olds go to the movies in the third quarter.
This is 54% of the 18 to 34 year old population in the U S and they were not alone audiences across all demographics also showed up for the preferred genre.
68% of the audiences that attended minions, where families and 75% run 25 years old.
The much anticipated horror movie no brought an incredibly diverse audience with 33% African Americans, 20% Hispanic and 17% Asia.
It was also the second highest rated our weighted movie since the start of the pandemic.
More recently limited king reminded the industry that women come to the movies for great content.
The audience for women at King was 60% female and 81% diverse.
In the third quarter of 22, our total revenue was $49 5 million, an increase of more than 75% compared to the third quarter of 'twenty. One when we generated $28 3 million of revenue driven by a strong box office at the beginning of the quarter July 22 revenue for <unk> was nearly two five times greater than July of 'twenty one.
Despite the fact that there were no tent pole films released in August we also significantly peripheral August of 'twenty, one with a 67% increase in revenue.
<unk> continues to gain momentum in the third quarter with eight existing clients increasing their spend compared to the third quarter of 'twenty. One other growth categories on our screens included entertainment <unk> CPT category and business services.
Importantly, the automotive category is now also showing solid recovery with four major automakers on our screens in the third quarter.
That number will increase further as we look ahead into the last quarter of this year.
In addition, our platinum business continues to grow with seven platinum deal secured year to date versus only one deal that ran in 2021.
Our upfront negotiations for the 'twenty two 'twenty three TV calendar year periods are now very close to being finalized we anticipate our projected total upfront revenue would be 85% of the average annual upfront revenue. We earned from 2017 through 2019.
To highlight the importance of upfront commitments to our results in 2019 upfront revenue represented 68% of our total national revenue for the year.
Deals include all of the major AD categories, including entertainment automotive travel wireless insurance.
<unk> CPG travel finance technology and pharma.
With this level of upfront commitment in 2023 theater attendance expected to increase we are very well positioned for growth in the fourth quarter and into 'twenty three.
On the local market side, our total revenue was up more than 75% in the third quarter 22 compared to the same quarter last year.
Government health care and education remain our top three local categories up 65, 52% and 82% respectively for the third quarter compared to the third quarter of 'twenty one.
Anticipating we're now beginning to see a rebound of client categories impacted by the pandemic with travel and tourism up 182% entertainment up 448% automotive up 500% and utilities up 600% in the third quarter year over year.
Our digital business continues its trajectory of growth growing year over year and quarter over quarter revenue increases in 22, our third quarter revenue and 22 was up almost 30% compared to the third quarter and 21.
Year to date, we have seen a 34% increase in digital sales business overall.
Our biggest category continues to be government delivering 56% of our digital revenue in the quarter.
While still small part of our revenues the growth of our data driven digital business is strengthening our position in the marketplace as a premium video platform.
Adding our advertisers with campaign analytics, they require to evaluate the effectiveness of their media buys <unk>.
Additionally, this data helps add scale by bundling cinema and digital movie audiences delivering a unique solution that differentiates us from other media platforms.
On the affiliate front, we recently secured more than 800 screens and approximately $16 5 million annual attendees to our network for the long term we.
We added VIP cinemas to our network, which operates a circuit of 17 theatres across eight states from South, Florida Central Kansas. We also extended our service agreements with 10 exhibitors in the U S, including synergy entertainment.
GTT movies, MJ, our digital cinemas and United Entertainment Corporation.
As cord cutting continues to rise as expected to reach 50% by the end of this year advertisers are increasingly challenged and how to reach their targets efficiently across all platforms, including CTV and streaming.
Even with the options to stream of new release at home after theatrical and almost all moviegoers say the availability of new releases on streaming platforms does not lessen their desire to go to the movies. In fact frequent moviegoers are also the most avid streamers.
Cinema advertising is not just delivering performance metrics for clients advertising as a risk. Its also consistently outperforming other mediums in comparison.
Our unique reach amongst the coveted 18 to 34 year old demographic tops, almost all AD supported streaming apps.
And <unk> averaged a $6 seven weekly rating during the quarter, beating the broadcast Prime average every week.
When compared to net retail versus performance. This past summer than we wish are looking like a much better bet for advertisers these days.
<unk> also appears to be benefiting from the various challenges digital platforms are facing as they deal with government privacy concerns and changes in online privacy controls.
Our expanded ability to leverage valuable consumer information to deliver insights that provides various measurable data is a game changer for us our proprietary data intelligence platform <unk> has made cinema, even more targeted and measurable with our power to supercharge, our audience by leveraging over $290 million.
One of the largest deterministic moviegoer datasets available this.
This has allowed more brands and agencies to include <unk> in their media plans as performance oriented Kpis are now a must have for all media buyers.
We recently further strengthened our analytical capabilities to our new partnership with ice spot the real time, TV measurement company, extending the value and capabilities of <unk>.
Our eyespot integration expands the opportunities for our brand clients to plan buy and optimize video investments Holistically.
Cinema advertising is one of the few mediums able to engage and connect with a young diverse audience at a national scale, but now the eyespot partnerships enable us to prove how cinema advertising extends the reach for buys across CTV broadcast and cable.
Our ability to marry these unique data analytics capabilities with our broad National network differentiates <unk> from other cinema advertising companies MTV networks, and we have the results to prove it.
Through several multiyear multi category proprietary intercept studies, we're demonstrating strong awareness and recall metrics with impressive case studies across categories improving.
Moving sales lift foot traffic build in incremental ROI specific campaigns recently, we partnered with two technology clients that had not advertised on Ncr's network in the past in both cases, our Cape It our capacity to measure and report success metrics was a key factor in their decision to join our network.
One of these companies has already renew the coming year, increasing their budget by 50%. We're seeing more of these success stories across brands and categories proving once again the value of our audience.
As we look ahead to the fourth quarter. There is a strong slate of films for leasing across all genres set to open exclusively in theaters.
The entire quarter is rich with premium content with a mix of films for everyone. On November 11th the highly anticipated Black Panther, what kind of forever opens followed by a likely Oscar nominees to favor womens and great family fare, including strange world and pushing boots. The last wish the much anticipated release of Avatar the way up water opens on December 14th.
Projected to bring in big box office numbers and diverse audiences in the theaters well into the first quarter of 'twenty three.
Before I turn the call over to Chief Financial Officer, Rodney and I wanted to make a few comments about our delayed bond interest payment and long term partnership and exhibitor services agreement or Esa with Regal.
As has been previously disclosed in court filings Cineworld filed a motion, indicating an intention to reject the Esa and also stated that Regal currently plans and engaging with us regarding advertising services.
And CMA LLC filed a lawsuit to enforce our noncompete and exclusivity agreements.
As the litigation was central this ongoing it would be premature for us to comment any further on this call.
Separately after utilizing a portion of our 30 day Grace period allowed by the bond indenture last week, we made the interest payment on our senior secured notes due 2028.
As Rhonda will discuss in more detail in a few minutes on a consolidated basis. We currently have over $64 million of cash and sufficient liquidity to run our business for the foreseeable future.
As you can tell despite the challenges presented by the pandemic and recent Regal bankruptcy filing we remain optimistic about the future prospects of our business.
We have nearly completed a highly successful upfront sales cycle and with a growing network of theaters, bringing in a higher tenants, we are well positioned for future revenue growth.
Despite the prospect of a recession, we are benefiting from a favorable macro advertising environment that is being driven by the recovery of several significant client categories, most notably automotive and the recovery of local small businesses that are onetime represented over 20% of our total revenue.
We also see benefits as digital advertising spend slows and brokers look to allocate and reallocate a portion of their digital budgets to more effective platforms that allow them to escape the clutter and differentiated differentiate their brands.
So while the last couple of years have been very challenging I'm looking forward to what lies ahead.
I'd like to thank all of our management and staff for their hard work and commitment to National Cinema media.
Would not be on this road to recovery without their dedication.
With that I will turn the call over to Ron to provide you with more details on our operating results and financial condition and future outlook.
Thank you Tom and good afternoon, everyone.
Third quarter, our revenue was near the midpoint of our guidance range provided during the last earnings call. While our adjusted OIBDA was at the top end of the guidance, resulting in a slightly higher margin than we have projected.
The results for the quarter reflect our strong execution to achieve operational efficiency, while navigating through the recovery of the exhibition industry.
In addition.
Our successful upfront advertising results that Tom.
Tom mentioned of 85% of our historical average demonstrate the.
The importance of our value proposition to advertisers.
These upfront commitments combined with a stronger film release schedule and higher movie attendance will set the stage for meaningful growth in the fourth quarter and 2023.
As we mentioned on our last call for the third quarter, we experienced a lighter film release schedule.
During the late summer and early fall than we anticipated.
This was simply a matter of timing related to film production and post production bottleneck.
During the Covid lockdown.
With the holiday season on the Horizon, we expect the number of films to again increase.
<unk> during the fourth quarter 2022 and into 2023.
Total revenue for the third quarter was 54 and a half million dollars.
Roughly 72% compared to the same quarter last year.
National revenue for the third quarter of $39 7 million was up over 75% compared.
Compared to the prior year, while local and regional revenue for the third quarter of $9 8 million was up 72% compared to the same period last year.
Looking at the operating metrics, we continue to deliver a large high quality captive.
Audience to our advertising partners.
This large scale and broad geographic coverage is critical to advertisers as we compete against large national and local television networks and various online social search and entertainment platforms for advertising budgets.
Even with the last substantial film release schedule third quarter network theater attendance remained over $100 million at nearly 107.
This represents the third quarter last four where attendance exceeded $100 million.
In addition, overall attendance levels was roughly 65% of the pre pandemic levels, which we experienced in the third quarter of 2019.
65% was consistent with what we saw during the second quarter.
Looking at our pricing.
During the quarter, we continued to see improved year over year trends driven by favorable client mix and higher platinum sales similar to what we saw earlier in the year.
We continue to see the client mix evolved with large cap tech media and travel making up a large portion of our top 10 accounts for the quarter.
As a result of this favorable mix of our third quarter National CPM.
Exceeded that of the third quarter of 2019 by 26%.
Making this the fourth consecutive quarter in which pricing exceeded 2019 levels.
The CPM trend has been accelerating with the second quarter of 2022 up 19% versus the second quarter of 2019.
First quarter of 2022 up 2% over 2019 levels.
With a much higher percentage of our fourth quarter and 2023 revenue coming from our upfront commitments. We do not expect this accelerating CPM trend versus 2019 to continue as our revenue growth will begin to be driven more by an increase in inventory.
Utilization, resulting in an overall increase in revenue per attendee on Sandy <unk>.
In fact, our third quarter revenue per attendee was up 22% versus the third quarter of 2021.
Advertisers also continued to embrace and purchase our platinum inventory spots.
Despite the softer movie slate in August and September we successfully sold platinum advertising in each month of the quarter.
We continue to expect platinum spots to be in high demand for the fourth quarter with sales in each month of the quarter.
As you can see there are some very encouraging underlying market signals in our kpis.
Those favorable underlying trends continuing to tell us that as movie attendance improves we are well positioned for revenue growth in the future.
Turning to our expenses.
The third quarter operating expenses, excluding depreciation and amortization noncash charges and onetime items were <unk> 47, and a half million dollars.
Overall, a 9% decrease compared to the second quarter, while representing 19% increase over the same quarter last year.
These variances primarily reflect the seasonality other than the and variances in the theater access fees and affiliate expenses related to increases in industry attendance.
Our selling and marketing costs remained generally flat compared to the second quarter.
<unk> increased 27% over the same quarter last year.
While we continue to make great efforts to contain costs did increase certain costs over the prior year, where it was strategically necessary to support our growth and ongoing recovery in our business.
Third quarter adjusted OIBDA was 7 million for a margin of approximately 13% compared to negative $8 2 million last year.
As mentioned this.
This was at the high end of our guidance range provided in August .
Which was a result of higher CPM and focused expense management.
Our recent performance, we continue to be reinforced in our view that as theater traffic back towards normal historical patterns and our inventory utilization increased due in part to our successful upfront campaign.
Including the sale of more of our high margin Platinum unit.
We are well positioned to continue to improve our adjusted OIBDA margins.
Integration and other encumbered theater payments due from AMC for the third quarter were $1 2 million compared to 0.2 melanoma for the same period during 2021.
As a reminder, integration payments are based on what <unk> could have earned had advertising been sown in those theatres by our sales teams.
These integration and other incumbent theater payments are added to adjusted OIBDA for debt compliance and partnership cash distribution purposes.
Are not included.
And reported or adjusted OIBDA.
They are recorded as a reduction to net intangible assets on the balance sheet.
As our overall revenue increases these payments will also increase.
Third quarter GAAP loss per diluted share was <unk> 11.
Versus a loss per diluted share of <unk> 19.
The third quarter of 2021.
Turning to our consolidated balance sheet.
Total debt net of cash.
<unk> LLC at the end of the third quarter was $1 1 billion.
Approximately the same as at the end of 2021.
Changes in debt related primarily to the $50 million revolver funded in January 2022, net of the approximately $25 8 million of MCM LLC is 585 senior secured notes, which <unk>, Inc. Acquire for an average price and then.
Mid seventy's during the second quarter.
Our average interest rate on all debt was approximately six 5% for the quarter compared to five 6%.
Third quarter of 2021.
This increase was primarily due to the higher rate of the new $50 million revolver that was funded in January .
2022.
Excluding LCM llc's revolver balances approximately 53% of our total debt outstanding at quarter end had a fixed interest rate.
MCM LLC cash balance at the end of the third quarter was $60 9 million and including the $7 2 million of availability under the revolver MCM LLC total liquidity at quarter end was approximately $68 1 million, which was in excess of our liquidity covenant that requires a mid.
On liquidity.
Right.
Last week, our board of directors voted to pause the MCM, Inc. Regular quarterly cash dividend as we continue to prioritize financial flexibility and liquidity.
As always the <unk>.
Declaration payment timing and amount of any future dividends will be at the sole discretion of the board of directors. We will also consider general economic and advertising market business conditions and the company's financial condition.
With respect to the broader economy and its impact on our business, we have not experienced significant client marketing budget contraction as consumer spending has remained strong. Despite the recent significant increases in market interest rates and the fear of a future recession.
We have also not noticed any impact on our theater partners business as the cinema business has historically done very well during periods of economic slowdowns.
Cinemark continues to be one of the lowest priced forms of out of home entertainment, we expect that trend to continue.
And while certain client categories.
They cut short term marketing expenditures in fear of a future recession, many important categories to us such as auto have already been depressed over the last couple of years due to supply chain issues.
As those issues abate and more of their products become available.
We have actually begun to see an increase in their marketing budgets.
This is also true in certain consumer product categories, such as telecom and insurance.
These companies compete for consumers' during recessionary times.
We will also benefit should the economy began to slow from our successful upfront campaign that will help offset any contraction in the scatter market that usually accompanies an economic slowdown.
Turning to guidance.
We expect revenue for fourth quarter of 2022 will be between $85 million and $95 million.
We expect fourth quarter 2022, adjusted OIBDA to range between $32 million and $42 million, which compares to $18 4 million in the fourth quarter of 2021.
In addition, we expect cash interest expense for the fourth quarter, TV $18 million $19 million and capital expenditures to be $1 million.
While we remain optimistic about the recovery of our business over the medium to long term.
Our large four quarter guidance range reflect some level of prudent conservatism with respect to the headwinds of a slowing economy.
And its impact on advertising spending.
Having said that it.
It is important to note that due to our successful upfront campaign.
70% of our national revenue guidance for the fourth quarter of 2022.
Is already contracted.
Versus 41% in the fourth quarter of 2021.
Okay.
As many of you are aware during the early part of September Ringo and its parent center World commenced a chapter 11 reorganization.
The process is in the early stages and as Tom mentioned, there is not much we are able to add.
Beyond what you already know.
From our perspective.
Nothing has change on a day to day basis with Rio.
We are advertising and all of their theaters without disruption.
Our business remains unaffected, while the process related to their agreement with us that have been in place for almost 20 years plays out.
We continue to be the cinema advertising leader with 75% market share of the opening domestic box office each week.
<unk> was superior sales marketing research and operations teams, along with one of the largest movie goers databases.
With the most robust campaign analytics platform in the business.
All of this allows us to deliver industry, leading revenue per attendee to our theater circuit partners.
As disclosed last week, we received a standard notice from the NASDAQ regarding our listing due to our current stock price.
In addition to the recovery of our business.
We have several other alternative measures, which we may pursue to maintain long term compliance with NASDAQ NASDAQ standards, including a reverse stock split.
We remain focused on building back our business to pre pandemic levels and consider our NASDAQ listing to be an important component of that effort.
As you can see.
While we are being somewhat cautious about the current general economic conditions, our business is well positioned to benefit from our successful upfront campaign and improving film release schedule and higher theater attendance, which will help generate improved margins and start the process.
So the deleveraging.
Operator, please open the line for questions.
Thank you.
I would like to ask a question. Please signal by pressing star one on your telephone keypad.
You are using a speaker phone. Please make sure your mute function is turned off to allow the signal to reach our equipment. Once again, if you would like to ask a question at this time. Please press star one.
We will take our first question from Eric Wold with B Riley. Please go ahead.
Thank you.
Afternoon.
Tom Roderick.
Couple of questions I guess.
First off.
And the commentary around the.
85% upfront commitments versus the 2017 2018 period can you.
Can you remind us where we are a CPM wise versus those periods right now.
Within the increase.
Yes.
I guess for clarification are you talking about.
The fourth quarter or are you, referring back to the prior year quarter.
No sorry, the commentary.
The Upfronts that you are completing right now are.
About 85% of revenue would generate between 2017. Thank you curious I'm just trying to compare what the CPM is are embedded in that.
Brian can you just completed or are completing versus back then okay. Fair question, Eric the Cpm's in the current upfront are comparable to where they were.
On an average basis from 2007 to 2019, there hasnt been an erosion.
In Cps, which we're quite happy about as you know we've never been a discounter in this category.
So the pricing levels.
In the upfront or in fact, the good news is basically flat to where they were from 2017 to 2019.
Got it okay.
And then.
I'm wondering I connect the dots on something.
The commentary around it obviously.
Slash CPM is right there.
And then your comments around revenue per.
Attendees, if I look at the revenue per attendee in the first two quarters. It was down about 9% versus the same quarter to 19, but then the revenue per attendee in Q3 was down 24% versus Q3 19.
Overall revenue for Nash.
National and local regional the decline versus <unk> 19 for the total revenues had been comparable through all three quarters of what happened in Q3 that a blip because there's something else there that I'm missing that should be included.
No I think I think the numbers, you're you're signing is correct, where we saw I think in the first half of the year were closer to 2019 on a revenue per attendee basis versus in the third quarter I think the quarter to quarter was was really just a reflection of one August .
Lower activity level in terms of the movie slate.
Two I think you really saw.
A weaker scatter market.
We all anticipated I think those two things combined combined together kind of led to what we saw in the third quarter, but I think the most important thing to remember is that the weak slate is important.
In terms of generating <unk>.
Volume.
And activity with with advertisers.
Also as it relates to the CPM comment from before that that's a forward look Eric for really Q4 too.
<unk>.
And it's not an explanation of the softer scatter market that we saw in Q3.
Correlated as well to lower box office estimates that we had in September .
Got it Okay and then just final question for me then.
CPM is Florida.
Satish versus 19, we get back to a.
Healthier film slate and activity next year.
Any thoughts on it.
Scatter is it still a question Mark any thoughts on where you think revenues per attendee can start trending in the 'twenty two 'twenty three.
Okay.
Bruce.
We're not going to guide on.
23, yet.
Hopefully over the next quarter, we'll be in a position to start talking about that.
I'd like to get this year wrapped up and then hopefully we can provide more specificity on 'twenty three on the next call.
Fair enough. Thank you Bill.
Youre welcome.
We will take our next question from Jim Goss with Barrington Research. Please go ahead.
Okay. Thanks, a couple of them.
Burst.
I'm wondering about the.
As you approach them.
Attitude toward the platinum spot.
In terms of the context or the.
The share of growth.
You might achieve in the.
National advertising segment.
Segment like will this be a bigger portion.
Will it really be the only place really growing within national.
The time being.
In terms of total dollars.
I think actually platinum is a growth story, but I think the post show that incremental five minutes on top of platinum that we negotiated right before Covid hit is also a growth part of our business.
We've got seven advertisers committed flatten or this year.
Which is a lot more obviously than we had last year.
So platinum is a growth story, but so is the post show.
<unk>.
Without the combination of those two things we wouldn't be able to commute virtual growth story. So that's why we tried to future proof the company and in the fourth quarter of 2019.
And now we're finally at a point, where we can sell the upfront again against post shell and platinum.
So I think the Upfronts, a real testament to the strength of the growth opportunity associated with platinum and post show.
Okay.
With the return of.
Greater share of local that you mentioned would it be complementary or would it be.
Yeah.
Just taking some of the share that might've been with national.
I don't know the correlation.
I would say, it's incremental it's not really substituting it's different advertisers.
And it's a lot of it's been in scatter lately.
So I don't look at local as being contributing a cannibalistic piece to our business at all its different advertisers and different municipalities. So we're hoping that local can continue its momentum.
And get back to where it was which was a really significant part of our business in 2019.
Many of the key categories in local are recovering.
Including local automotive.
So I think local has been the last sort of segment to come back in our portfolio.
Largely related to smaller companies still.
Grasping with budgets coming out of Covid, but the.
The recent indications are the locals coming back and we're really optimistic that trend will continue over the next several quarters.
Okay and then the last one for now.
Obviously.
There with the preference of premium.
Box office.
Then.
Growing more rapidly.
Turning more rapidly than the number of attendees.
And I'm wondering if.
Yes, whatever CPM increases your.
We're getting our.
Attempting and helping to offset maybe that erosion that we've experienced and if there is an opportunity because of the demographics and because of the appeal of your ad spend.
To maybe stay ahead of that erosion.
Well I think it's critical that we focus on our most premium inventory in light of what you just said.
Obviously, nothing can substitute for attendance.
And as you know the attendance is still.
Still significantly.
Significantly down from 2019.
So it's going to take both a combination of selling more premium inventory combined with what we believe will be a very healthy 23 and 24.
But we need both and thankfully we have some of the most premium high CPM inventory available of any kind.
But we do need the attendants to continue to recover.
No one knows what the actual tenants is going to be in 'twenty, three and 'twenty appropriate that release schedule.
Which our clients bought into in the upfront would suggest that there is a lot of optimism for premium inventory and the fact that we sold seven times more platinum spots this year than last.
It is a good indication of that but obviously, we have a ways to go but we're really happy with the momentum that we've achieved just in the last six months or so.
Okay.
Thanks, Tom.
Sure.
That will conclude today's question and answer session. Mr. Lesinski I will turn the conference back to you for any additional or closing remarks.
Okay, well. Thank you everyone for your questions and thank you for your support with a robust fleet slate of scheduled content in Q4, and our advertisers back on screen with US we look forward to a really strong finish to 2002, we know that the content is there.
Noninterest will show up, especially that hard to reach young audience that are not available in the TV marketplace anymore. So we can now easily prove out to our advertisers that cinema outperforms linear television delivering better engagement than social and the AD supported streaming apps.
And as we look ahead, we anticipate even more people will be coming into the theater to enjoy their favorite new movie on the big screen.
I want to thank our entire team and see them for their hard work and thank our shareholders, our lenders and our advisors for their support and patience. We truly appreciate you joining us on our call and look forward to seeing all of you at the movies. Thank you.
This concludes today's call. Thank you for your participation and you may now disconnect.
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