Imax Is the Future of Movies

ShoWest is abuzz about Imax (IMAX) now that the company's big format theaters broke records this past weekend with the debut of DreamWorks Animation's (DWA) Monsters vs. Aliens. The movie was Imax's biggest 3-D debut ever, generating $5.2 million in revenue from just 143 screens. That statistic is striking — Imax generated a whopping nine percent of the movie's total box office from just about two percent of the screens.

I spoke with Imax co-CEO Richard Gelfond at ShoWest. (On Wednesday, he becomes the company's sole CEO when his co-CEO becomes non-executive chairman.)

Gelfond says the company hasn't seen any negative effect from the recession, despite the fact that Imax theaters charge $13 or $14 per ticket, about five dollars more than the average multiplex. Gelfond points out that as home theaters get better and better, when they head out to see a movie they need the experience to be really different, something they couldn't replicate at home — which is exactly what Imax offers.

Imax, which lost about $33.6 million last year, up from a $26.9 million loss in 2007, is narrowing its losses, on track to be profitable for the full year 2009. The company's new digital systems are helping, cutting down on the costs of shipping film reels, among other things. Digital cinema also allows Imax to double the number of movies each theater can show every year, from five or six, to eleven. And Imax's joint-venture deal with theater owners helps the company build long-term revenue streams.

Gelfond isn't interested in bringing Imax to every mall across America — it'll always be a premium experience. But there's still plenty of room for this niche entertainment company to grow.

Comments

[Linda Nelson:]

Ten years ago, I started a company called Showmax. The Business Plan set out to show that IMAX was the future of movies. Mind you, most of the IMAX screens were in science museums back then, but it was clear that this was a superior experience. With my partner, I produced a very commercial large format film that played in fifty IMAX and other large format theaters worldwide. It was an NSYNC concert film at the height of their phenomenal success. It helped bring a new audience to museums. After many attempts to get the company off the ground, including lawsuits from people and companies/institutions that didn't "get it", we abandoned the company because we were unable to raise enough financing to get the company properly funded and deal with the opposition. I'm thrilled to see that the concept is finally being embraced and perhaps it's time to revisit the possibility of making more BIG movies.

Apr 01 12:43 PM