What happened

Shares of National CineMedia (NASDAQ:NCMI) are plunging today, down by 15.4% as of 11:34 a.m. EDT, after the cinema advertising specialist's parent company released a weak preliminary second-quarter earnings report.

So what

AMC Entertainment (NYSE:AMC) pre-announced second-quarter revenue of $1.2 billion, well below the Street's $1.3 billion consensus estimate. On the bottom line, analysts wanted to see earnings near $0.10 per share but will instead have to settle for a net loss of approximately $1.35 per share. The weak results stem from soft box office trends across the industry, and none of these metrics are likely to inspire big cinematic ad buys in coming quarters.

A boy and a girl, asleep in an otherwise empty movie theater.

Image source: Getty Images.

Now what

National CineMedia and AMC are fighting many headwinds at once. The box office receipts actually mask even weaker attendance figures because average ticket prices are rising. Lower foot traffic to the malls where you find most cineplexes isn't helping either. The same cord-cutting generation that doesn't want to pay extra for TV channels they never watch aren't really into driving down to the movie theater when an internet-connected set-top box can provide hours of high-quality entertainment right at home.

AMC is doing its best to stem these negative tides with better seating, in-theater dining, and other customer-friendly improvements to the cinematic experience. Maybe that's enough to save the theater chain itself. But I'm afraid the market for in-theater advertising sales is fading fast and there may be no going back. National CineMedia is in deep trouble, and trading at fresh multiyear lows for good reason.