Tuesday 24 February 2015

TRENDS: IMAX

Audiences and Institutions: pick out key trends for your exam essay!

As the film business changes, IMAX is determined to stay in the front row

WHEN Richard Gelfond, the boss of IMAX, goes to China, people sometimes ask for his autograph. That is because for the Chinese, watching films on a screen 20 metres high is still a novelty, and IMAX is the best-known brand in giant-screen cinemas. No one in Hollywood has yet asked for Mr Gelfond's autograph, but he is happier being a star abroad. China is now the world's second-largest cinema market. Its box-office receipts rose by 37% in 2014, to around $4.8 billion. Along with other emerging economies, China will drive the film industry's growth in the years ahead.

IMAX's roots are in museums and science centres, where audiences goggle at documentaries about sharks, dinosaurs and planets. Its fortunes were boosted when, in 2009, its cinemas did 3D screenings of Avatar, a film about tree-hugging blue aliens. The film broke worldwide box-office records and introduced IMAX to millions more popcorn-chewers. Now, the company is in "the sweet spot of what is working well globally in the box office", says James Marsh of Piper Jaffray, an investment bank. The high-budget, high-octane blockbusters that Hollywood spews out these days are ideally suited to IMAX screens; and more than 55% of IMAX's 800 screens are outside America, mostly in high-growth markets.

IMAX's margins are more than double those of cinema chains such as AMC and Regal, because it does not bear the costs of owning theatres or employing ushers. It makes its money by selling or licensing its screens and other technology to cinema operators, and by taking a cut of their box-office receipts. IMAX also makes money from studios by assuming the cost of remastering films so they look slick on its giant screens, in exchange for a slice of what the studios get from ticket sales. So, when films do well, IMAX gets a piece of the action; when they bomb, its costs are limited.

Mr Gelfond may not get mobbed by film fans on Hollywood Boulevard, but his number is in every studio boss's Rolodex. The studios want their big-budget productions to be shown on the largest possible screens; and negotiations to get them into IMAX cinemas can start a year or more in advance, says Michael Burns of Lionsgate, a big studio. Sometimes producers will delay a film's release until it can get a good slot. This has happened with Mission Impossible 5, whose debut has been postponed from December 2014 to July 2015.

Worldwide ticket sales are expected to hit a record this year, as the latest instalments of such well-known film franchises as James Bond, Star Wars and the Avengers light up the screens. But it has not been a smooth walk down the red carpet. Last year America had its lowest cinema attendance in two decades. With such sophisticated home-entertainment options on offer, "people need a reason to leave their house," says Mr Gelfond. Theatres are offering better food and plusher seats in return for higher ticket prices. To fill seats in quiet periods they are also offering new content, such as filmed operas, ballets and virtual museum tours. This month IMAX has been screening episodes of HBO's Game of Thrones television show.

As TV screens get bigger and sharper, and as streaming services like Netflix expand, cinemas may get an ever-shorter period of exclusivity before a film is made available for home viewing. So IMAX is hedging its bets: it plans to sell smaller versions of its screens for the homes of rich Chinese film buffs; and it is working on some sort of home-cinema technology (it won't say what) for the American market. Its bet is that some people will always be willing to pay more for a bigger picture.

Source Citation (MLA 7^th Edition)

"Just the ticket; Cinemas." The Economist 7 Feb. 2015: 61(US). Student Edition. Web. 24 Feb. 2015.

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