NEW YORK - US cinema advertising revenue increased 21% to $527 million (€419.0m; £286.4m) last year, breaking the $500 million barrier for the first time according to a report released Tuesday by the Cinema Advertising Council.

With declining attendance (down nine percent in 2005) and flat box-office revenue, in-theater ad sales have become critical for cinema owners, said CAC president Robert Martin. He forecasts that in-theater ads will surpass $1 billion in five years, "if not sooner".

The are two major drivers of growth, according to Martin. Advertiser demand for new channels to reach consumers, and the switch by the theater industry to digital technology, enabling advertisers to electronically transmit their ads to theaters.