2023-08-12 08:30:32
The screen war has taken place. This summer, fans of “Oppenheimer”, the film by Christopher Nolan regarding the father of the atomic bomb, were able to see the film in the best conditions: the production of Universal studios had negotiated the exclusivity of Imax screens in the United States United for the first three weeks of operation. A blow for Tom Cruise and his latest “Mission: Impossible”. Released just before, this opus was only able to enjoy one week of these giant screens, made for blockbuster films.
Christopher Nolan “helped make the film a must-see cultural event, with sold-out Imax screenings at 4 a.m. and people traveling for hours and sometimes crossing borders to see a film in Imax,” applauded his CEO, Rich Gelfond, during the quarterly results at the end of July. If there are regarding 400 Imax theaters in the United States, the must was to see the film, like a great vintage, in its version shot in 70 mm, a format possible in only 19 theaters in the United States and 30 in the world.
With such a locomotive and tickets sold more expensive than in conventional theaters, Imax achieved the best month in its history in July, with 176 million dollars in gross receipts on its screens. The company also outperformed thanks to China, with “more than 16% [des revenus] for the local blockbuster, ‘Creation of the Gods’, on only 1% of the total number of screens,” said Rich Gelfond.
“Premium Experiences”
After a pandemic that has weakened cinema operators, “the evolution towards high-end cinematic experiences that the Imax has created is no longer just a post-Covid trend, it is the new normal, the way forward bet this former lawyer and investment banker, who had bought the small company born in Canada from a few enthusiasts nearly thirty years ago.
Launched in science museums and planetariums (la Géode and Futuroscope in France) to broadcast documentaries on the conquest of space or the oceans with an unprecedented feeling of immersion, Imax groped for a long time to find the key to its economic balance and reach the 1,700 screens today equipped with an Imax system (including regarding twenty in France). Film studios were reluctant to finance expensive equipment to shoot in Imax format, and exhibitors asked for films to invest in their theaters and projection booths…
The market opened up when the small company’s engineers were able to convert films to its format without having to be shot initially with its expensive equipment. From then on, Imax, with concessions on screen size and resolution, was able to offer more films to exhibitors and negotiate a share of the receipts with the studios. With the development of digital, the end of physical copies of films has also reduced costs and helped spread the format.
China, a growth driver
The turning point came at the end of 2009 with “Avatar”, the film directed by James Cameron, another Imax fan, Rich Gelfond told the “Harvard Business Review” ten years ago. And the vogue for franchises then carried the format. For “Avatar 2”, released last year, it represented only 1% of projections, but more than 11% of receipts, according to the professional press.
China has also been, throughout this period, a strong driver of growth (nearly a third of turnover in 2019), with a middle class eager for entertainment and the desire for the company to develop on the Mandarin movies. With cash to invest, Imax has just announced the purchase of the balance of their stake in Imax China.
Actors strike in Hollywood
In total, the company plans to install another 110 to 130 systems in rooms this year – with a sales or revenue-sharing model. Goldman Sachs analysts nevertheless list the clouds that might slow down investments in the coming months, from the postponement of the release of “Avatar”, to “the recent underperformance of superhero films, which have been a constant generator of Imax receipts over the past decade.
Finally, “the risk that the strike of screenwriters and actors will continue until the end of 2023 and lead to delays in releases” next year might also weigh on the investment projects of exhibitors, believes the bank. Goldman Sachs is betting on a turnover of 380 million dollars for Imax this year, with 31 million net profit.
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