Imax Corp.'s (ticker: IMAX) theater signings surged in the second half of the year. Management attempts to explain why during its March 10, 2005 conference call with investors.
Why the second half momentum? The successful installation of our first MPX theater in late June changed the selling dynamic… we were able far the first time to generate substantial data showing that an MPX retrofit is a win-win for IMAX theater operators and movie goers.
[see data below]
Second the data supported [that] IMAX's are incremental, not cannibalized from other 35-millimeter boxes…I can't over emphasize the importance of this because obviously both exhibitors and studios wanted to know whether they were bringing in an incremental patron or just taking patrons from one box to another. As an example, the national amusements theater that opened in Louisville Kentucky…we compared the market share before the IMAX theater opened [and after]..and found that the market share was higher meaning that the other screens got a bigger percentage of the market than that it did when there were more screens….the evidence demonstrates that the attendees to the IMAX theater were additive to the 35-millimeter audience.
Finally, box office results for the 2004 films demonstrate that IMAX screens can generate the more than $1 million in box office revenue modeled for exhibitors to earn a three year pay back or 30 percent plus IRR on an IMAX MPX retrofit.
(Quotes are from the CCBN StreetEvents transcript.)
Data on moviegoers' Imax experience:
- 86% said the Imax theater improved their perception of the multiplex
- 86% said that they are more likely to visit that multiplex again soon
- 93% said they were extremely/very satisfied with the Imax 3D experience