Making Virtual a Reality: Imax's embrace of VR shows promise for all cinemas
Since 2002, Imax Corp. has set the bar for quality in film cinemas across North America. Its 70mm film stock brought increased resolution and picture quality. This, coupled with a separately contained soundtrack, helped immerse audiences in a way that traditional projectors did not. In the last 15 years, Imax has become a name synonymous with innovation in the movie theatre industry. As virtual reality (VR) begins to enter the consumer market, Imax is stepping forward again to pair its brand with this enhancement in immersive technology—entering a market that Greenlight Insights forecasts will be close to $200 million in size by 2021.
Imax’s success comes at a time when innovative technology is having a mixed reception at the cinema. Since 3D projection made a return in 2003, the technology has not produced the consistent increased audience or returns that were hoped for. Efforts have been hampered by skepticism from successful directors like Christopher Nolan (Dunkirk), who said in 2013, “Until we get rid of the glasses or until we really massively improve the process, I’m a little weary of it.”
Imax, by contrast, has been seen as a huge success. Imax screens routinely record impressive profits at the box office. This has placed the company in prime position to bring VR technology to the moviegoing public. Imax’s first VR center opened in Los Angeles in January 2017. A second location opened in Manhattan in June. Shanghai and Tokyo are locations on the horizon. Imax is leveraging its brand to bring VR to high population areas where it believes the audience will be receptive to new technology, provided it is offered at a reasonable price.
A VR center will have an easier time turning a profit in Chicago than in Normal, Illinois. Population centers, especially centers with a young population, are ideal for VR-enhanced locations. This is especially true in the Asia-Pacific market. North American theatre chains, however, face a harder-to-please consumer market and should again look to Imax’s example to attract attendance.
In addition to high-end VR headsets like the HTC Vive, Imax offers StarVR, which is not available for home use. StarVR provides exclusive advanced VR technology, meaning that Imax VR centers hold appeal to even Vive or Rift-owning enthusiasts who want to try the latest technology. It also helps cement an image of quality. Imax VR centers have hardware that is above the competition.
Another advantage that Imax enjoys over the current competition is content. It is well positioned to take advantage of promotional movie tie-in experiences and has been leveraging this connection to offer topical content that directly relates to the film industry. The John Wick Chronicles and The Mummy Prodigium Strike are VR experiences only found in Imax VR centers, both exclusively on StarVR. Other theatre chains entering the VR space should leverage movie tie-in content as well. Greenlight Insights research indicates that established intellectual properties (IPs) encourage users to try VR.
All movie theatres possess large rooms that can be remodeled into open space. Open space is a requirement for location-based virtual reality entertainment (LBVRE). Theatres and retail locations are in the best position to take advantage of this. Cinemas have already reduced the amount of seating in order to improve seat quality. Turning even one theatre into a VR location will offer an entirely new form of entertainment without the need to build a new facility.
Cinemas enjoy online infrastructure like MovieTickets.com and Fandango that can be utilized for VR content promotion. An infrastructure like this for LBVRE is almost nonexistent in North America, outside of first-party online ticket sales. By tracking ticket sales, theatre chains would know which experiences were being most enjoyed and could tailor future offerings to promote that content. MovieTickets.com and Fandango also have large user bases that could implement large-scale advertising campaigns quickly. Moviegoers are already accustomed to paying for a ticket outside of the theatre.
Lastly, Greenlight Insights consumer research shows that theatres, not arcades, are the most favorably viewed locations for VR enhancement. About 66% of consumers were interested in attending VR theatres, while only 53% were interested in VR arcades. Consumers want VR in a theatre setting.
Imax is currently leading the industry in terms of LBVRE, but there is immense opportunity. Greenlight Insights’ data projects that LBVRE, as an industry, will grow to roughly $825 million by 2021. Cinema chains are in a prime position to dominate this new market. They possess the content connections and the reputation for providing immersive entertainment. Imax has already used this favorability to generate profits, but the road map exists for all theatres to enter the VR space.
Greenlight Insights is the leading market-intelligence firm for the virtual reality and augmented reality business.