Think Virtual: IMAX counts on partners for a new premium experience

Features
Technology

“A lot of people are talking about virtual reality,” says Rob Lister, chief development officer at IMAX Corp. “We have actually done something. We are out there, operating a pilot business. We are trying to understand how to make this platform successful. It is really very early. We do not want to raise anybody’s expectations, we are not giving models to analysts or talking about what this will look like if it is scaled out as a full business. Time will ultimately tell.”

Beginning a year ago in January with a standalone location across from The Grove, the most popular lifestyle-shopping destination in Los Angeles, IMAX opened its second VR Center at AMC Loews Kips Bay Theatre in New York City in May. The first location in Asia followed in October, with partner Jinyi in Shanghai, China; and two more opened in November—at Odeon in Manchester, United Kingdom, and the IMAX VR Centre at Scotiabank Theatre in Toronto, Canada. By time of publication, New York City will have its second IMAX VR location at Regal E-Walk on 42nd Street. You can access the full list here.

Except the Los Angeles flagship location, the IMAX VR Experience is located within movie theatre destinations. Given the choice, we asked Lister whether the company would remain connected to movie theatres to have that prime association. “You hit the nail on the head in terms of what we are trying to find out. Our chief executive officer, Rich Gelfond, refers to being in a pilot period in terms of VR that is designed to find out the answers: Is this a good product in a multiplex? Are we bringing the right type of content into it? Are we at the right price points? Do we understand how to operate well? These are all questions that we are trying to answer.”

Interest from exhibitors has been strong, Lister assures. “Because of our long-term relationships with virtually all the big exhibitors in the world, we can roll out a network very quickly if we decide that this is in fact the type of platform we want to build. Whereas we have the ability, I think we need six more months, at least, of information coming from these locations to fully inform us as to whether these are the places we want to locate the centers… Does it work better in a retail center or a shopping mall or another type of entertainment destination? I think we are going to try a few of these and see what works best.”

What is already working, of course, is “The IMAX Experience” itself. This exclusive Q&A with Rob Lister is structured around the greatest strengths of IMAX as they are carried over into the world of virtual reality—one being the IMAX brand, the other the content. And there is all that technology, of course.

FJI: IMAX spent a significant amount of time determining the systems that would best represent the IMAX brand and experience. How did you find your technology partners? IMAX VR is using an approach that is different from your cinema systems that are built in-house and with proprietary technology.

RL: When you are dealing with third-party technology as we are with VR, the process becomes to try and aggregate best-in-class technology, and that could be a moving target. That can change from year to year, time to time. We may find a better platform. We may find a better headset. We start experimenting with free-roam VR, and we may find better technology there as well. My point is: This is an evolving platform, and we will always queue to best-in-class. Right now, we consider the very best to be the Star VR headsets from our partners at Starbreeze, which have a very large, close to an IMAX field-of-view. And the HTC Vive headsets we find make a very nice combo with some of the movie IP that we developed. On top of that, we look for other peripherals to add to the VR experience, such as haptic vests, next-generation hand controllers, D-BOX moving seats. We try and aggregate these together into an experience that is truly immersive and brand-consistent.

FJI: If technology is in such a flux and rapidly changing in the world of virtual reality, does IMAX add a special ingredient to the process? Other than the company’s obvious expertise?

RL: When it comes to the design of our centers and the look and feel of the pods that house the VR experiences, all that is quite proprietary. We developed that ourselves with the goal of creating a very social experience… From our standpoint, trying to build a true location-based entertainment center, we are focusing a lot on the social environment… In addition, we procure specialized content that is optimized for IMAX VR centers. We consider that to be a source of differentiation as well.

We designed these centers almost like a hub-and-spoke model. The hub is this social center where you can watch your friends play. There are monitors and the pod themselves were built quite low to the ground so that your friends can stand around and watch you engage.

So far, we have been adjusting to different environments. Most VR hubs have gone into multiplex lobbies. We are still very open, and as a matter of fact we are keen on trying out an actual auditorium. Screen number 16 or 17 that does not generate a ton of box office, we would like to try that option. We are quite flexible within the overall design. At some places, we installed as few as eight pods, going to as many as twelve. Regal E-Walk in Times Square will have a small number because the pods are complemented by Glo Station technology. This is our free-roam VR partner [https://glostation.com] at the Los Angeles flagship. Think of “Deadwood Mansion” as an escape-room zombie-shooting experience for multiple players. We are really encouraged about the results so far.

FJI: Even with multiplayer games for two to six people at one time, the irony remains that moviegoing is inherently social. Instead of sitting with hundreds of people, virtual reality is individual, and at best you have someone watching you. Do you think eventually this may become as large as one hundred guests partaking in more of a movie-like shared experience?

RL: I think that the technology exists right now—and not just in movie theatres but in your home too—to have a fantastic experience watching a movie without the headset. Presented with great audio, visuals, and one that is quite social. While there can probably and will be further improvements in that area, I do not think that is where virtual reality needs to go to find success. If you look at some of the free-roam VR technology that is emerging right now, such as what The Void is doing [www.thevoid.com/faq], and Glo Station, you will see more and more people—two, four, eight, and I do think it will ultimately be even a few dozen people—all interacting in the same virtual environment… I think, unlike moviegoing, that’s an area where virtual reality has a ton to offer.

FJI: With regards to branding, IMAX has some heavy hitting to offer as well. More than any one of the new VR players, to say the least. IMAX is well known worldwide for creating immersive experiences.

RL: Whether relating to our large screens, with immersive audio, and we are really the inventors of the modern incarnation of 3D, we are building a laser system now—all the technology that IMAX built on the cinema side has been geared to create a more immersive experience that puts the viewer inside the movie. It is hard to think of another platform where you are placed more inside the content, and inside the experience, than in virtual reality. In our cases, we are really trying to err on the side of the most interactivity possible. So instead of going to an IMAX VR pod and watching a 360-degree video, you are interacting with the environment. You have a gun, you have hand controllers, you are impacting the environment and the environment is impacting you. The ultimate kind of immersive entertainment is one where you are literally interacting with the environment, and that is IMAX VR.

FJI: The third element to IMAX VR is content. In addition to some great experiential tie-ins with new film releases from John Wickto Justice League: Dawn of Justice, does IMAX foresee digging deep into its library and offering some of the classic assets, such as nature documentaries?

RL: I would offer a little bit of a twist on that thought. Rather than going back and wrapping existing movies into 360-degree videos, we can instead leverage our relationships with the content providers in creating VR experiences out of movies that are in the pipeline. For example, we just released Justice League, both the IMAX movie and the VR component, at the same time, working with our friends at Warner Bros. Our involvement in the VR experience was completely piggybacking off our involvement in the cinema experience. Being at the table in discussions about the Justice League film resulted in us being able to talk with the same creators and filmmakers about Justice League the VR experience. Having those relationships with studio executives and with filmmakers allows us to get involved at the earliest stage in terms of creating VR content around tentpole movies… Think of people like J. J. Abrams, and Christopher Nolan, who are big-time IMAX filmmakers. They are not the types of filmmakers that will just allow their intellectual property to be used by any new platform. Content creators really must trust the technology behind the platform, and we have engendered that very trust over years of working with them on the IMAX cinema side. I think that gives us a big advantage in virtual reality.

FJI: We talked about content, branding, what type of locations and technology. What we still need to know about is the underlying business model. With a per-admission charge, is the setup very much like for a film? How does it work?

RL: With the multiplex operators, it is a split revenue model [that] roughly breaks down in thirds. One third goes to IMAX, one to the exhibitor and a final third to the content provider. While you remove the multiplex partner at the standalone location, we take two-thirds…while paying rent and incurring operating expenses that we don’t get to share with a partner. Multiplex locations provide the space for us. We provide all the hardware and install it, we train their staffers, their staff runs the VR experience.

FJI: Looking at the larger business model, talking about scale and bigger pies, do you foresee this becoming an affordable way for people to experience IMAX VR in the home?

RL: I really don’t think that is the ultimate goal, honestly. That is not what we are looking for. IMAX is looking to do what IMAX does best, which is location-based entertainment. We are about taking a piece of great content or entertainment and eventizing it, just like we do with our movies. You know, Star Wars: The Last Jedi is released very soon and it is going to be an event in IMAX. I just do not anticipate us to bring eventizing into the home. We bring people to our events. That’s really what the goal is here.

FJI: And it sounds like a good one indeed. Thank you for the conversation.