IMAXimum impact: Studio movies go big with large-format leader
At the end of April, IMAX chief executive officer Richard L. Gelfond had nothing but good news to share. “Our first-quarter financial results were driven by strong year-over-year increases in recurring revenues.” He attributed total three-month revenues of $55.6 million and an adjusted net income of $4.0 million to “the powerful combination of film performance and our growing worldwide theatre network,” which was up some 32% in the commercial, theatrical exhibition space. “In addition, the box-office momentum we experienced in the first quarter has continued into the second quarter, with gross box office to date up roughly 500% versus the same period last year and the summer movie season still ahead.”
Gelfond anticipates that “the momentum we are currently experiencing, together with our growing network, backlog of theatres, cutting-edge technology and the introduction of our new brand campaign should result in continued growth over the long term.”
For our back-to-back convention editions, beginning with Show Canada this month and continuing on to CineEurope in June, Film Journal International had an exclusive opportunity to speak with two key IMAX executives about the world’s best-known large-format brand and filmed entertainment experience. At the end of February, former Paramount Pictures International president Andrew Cripps joined IMAX in London, England, as president, Europe, Middle East and Africa (EMEA), and was appointed executive VP of IMAX Corp. concurrently.
We begin with Mark Welton, the recently promoted president of IMAX Theatres, last profiled in our ShowCanada 2011 edition when he headed corporate and digital development and theatre operations for the company. At IMAX since 1997, in his current role Welton will now direct IMAX’s theatre sales and operations worldwide. In addition, he will oversee IMAX’s efforts in advancing projection technology, the job description continues, along with “developing and executing strategies to further the company’s growth and extend its leadership position in the entertainment technology industry.”
Recently, Welton led the successful development of the revenue-sharing business model and digital transition, playing an important role in solidifying the company’s partnership with its two largest North American exhibitors, AMC Entertainment and Regal Cinemas.
“You know, it’s a very busy time for IMAX,” Welton acknowledges upon his return from what was indeed a busy CinemaCon. “From the film side, all the studios were at CinemaCon and we were able to meet with all of them.” Greg Foster, chairman and president of IMAX Filmed Entertainment, “was on a panel with various studio representatives and exhibitors,” Welton notes, reviewing a series of activities that also included International Day. “It is very positive to be able to meet with all our clients. We hosted several dinners for them.” He thanked key markets like Russia, Europe and South America for their support and shared with them “what we have planned in the future for the regions and where we are going… During our big dinner on Tuesday night with all the exhibitors and studio partners, Christopher Nolan spoke about The Dark Knight Rises, and his association with IMAX.”
The latest entry in the Batman saga will feature over one hour of footage captured with IMAX cameras that will be shown in full screen ratio at around 100 specially selected locations around the world. Welton confirms this to be part of a strategy of “various forms of IMAX differentiation” that also includes exclusive IMAX engagements prior to the general release date. The Avengers: An IMAX 3D Experience opened in Russia a full week in advance of the wide release, for instance. IMAX is working with filmmakers on differentiating approximately 10 of the 2012 and 2013 films so far.
“As you saw with Mission: Impossible—Ghost Protocol,” Welton continues, “using our IMAX cameras is the greatest differentiation that we can create. But, with that, we also see the possibility of different aspect ratios.” When it came to the IMAX-captured 70mm footage, which subsequently amounted to about 25 minutes of Ghost Protocol, theatrical presentations “went into the 1.43 aspect ratio, which is the ratio of our cameras, and thereby into full-screen IMAX.” Similarly, the opening bank robbery sequence of The Dark Knight was rendered in native IMAX, which Welton believes “is one of the reasons why it was so powerful and why Nolan decided to shoot over an hour of Rises with IMAX cameras.”
The previously quoted first-quarter report also references one-time costs associated with theatres so that they are indeed able to show both IMAX 70mm analog and IMAX digital. A number of highly successful theatres, such as AMC Loews Lincoln Square (New York City), Sony Metreon (San Francisco) and BFI London will be showing The Dark Knight Rises with the special ratio footage, Welton elaborates. “Both Chris Nolan and IMAX thought it was a great idea to have as many film-based screens as possible to take advantage of this powerful presentation. So we worked with another partner on developing a rail system that allows us to move the film-based equipment in and out again if there’s a digital-only release.”
With Welton in charge of the continued development of said projection technologies, we wanted to know where the recently announced agreement with Barco stands. “As you know, previously with our initial digital projector,” he gives credit, “we had an OEM partner with Christie. Moving forward, we looked at our ambitions around innovation and growth, and Barco seemed to be a leader in advanced digital laser technology.” The company is “well-known for its quality and integrity,” he cites as further reasons to select Barco “to co-develop our groundbreaking, new laser technology.” This will be based on Barco projectors and IMAX research and technology developed from the Kodak laser system that IMAX licensed back in October 2011. While laser illumination is obviously further down the road, Welton anticipates to start rolling out the first Barco digital projectors sometime during the third or fourth quarter of this year.
At press time, Welton was not at liberty to go public with the highly anticipated summer blockbuster to be shown in IMAX during ShowCanada. (Trust me, it is a terrific title.) He is very much looking forward to having an IMAX event and presentation at the SilverCity Polo Park Cinemas in Winnipeg, Manitoba. “We’re all pretty excited about it. This will be the first time that ShowCanada will be showing an IMAX release… And we have just a great lineup of movies this summer, with The Avengers followed by Dark Shadows, Men in Black 3, Prometheus, The Amazing Spider-Man, The Dark Knight Rises… Honestly, since I’ve been here, there’s never been a lineup like that in IMAX theatres.”
And, with that unbelievable schedule, the company will also be launching its new brand motto of “IMAX Is Believing.” “We’ve already met with a number of clients and exhibitor partners,” Welton assures. “We had a very, very powerful acceptance of where we are going with this in terms of building more of an emotional attachment. ‘IMAX Is Believing’ is not so much about the technical advantages of IMAX, but about the emotional feelings that the experience creates when you are right in the movie.” In summary, Welton believes, “It is going to be a very powerful second quarter, and it looks like a very bright 2012 for us too.”
Next month, Andrew Cripps will share their equally bright outlook for the IMAX theatre network worldwide.
First Quarter by the Numbers
During the first three months of 2012, total IMAX film revenue was $19.1 million, compared to $11.5 million in the first quarter of 2011. Production and IMAX DMR (digital remastering) revenues were $13.8 million versus $7.3 million in the year-ago period. Gross box office from DMR titles amounted to $121.7 million in the first quarter of 2012, up from $62.3 million. The average DMR box office per screen in the first quarter of 2012 was $247,600 ($212,400 domestic, $304,100 international).
Joint revenue-sharing arrangements contributed $11.7 million, increasing from $4 million in the prior-year period. During the quarter, the company installed eight new theatres under sharing arrangements. As of March 31, 2012, there were 265 IMAX theatres operating under joint revenue-sharing arrangements, compared to 181 joint revenue-sharing theatres open as of the same day 2011. IMAX systems revenue was $15.7 million, compared to $22.3 million in the first quarter of 2011, primarily reflecting the installation of eight full, new theatre systems and 10 upgrades in the most recent first quarter, compared to 11 full, new systems and 22 upgrades in the first quarter of 2011.
At the end of April, IMAX also announced 21 DMR titles to be released in the IMAX theatre network in 2012. The company remains “in discussions with virtually every studio regarding future titles and expects the total number of titles in 2012 to be similar to that in 2011.”
(Source: First Quarter 2012 Report, IMAX Corporation.)
2012 DMR Films Announced to Date
The Avengers: An IMAX 3D Experience (Disney & Marvel, May 2012)
Dark Shadows: The IMAX Experience (WB, May 2012)
Men in Black III: An IMAX 3D Experience (Sony, May 2012)
Prometheus: An IMAX 3D Experience (Twentieth Century Fox, June 2012)
Madagascar 3: Europe's Most Wanted: An IMAX 3D Experience (DreamWorks Animation, June 2012, international only)
The Amazing Spider-Man: An IMAX 3D Experience (Sony, July 2012)
The Dark Knight Rises: The IMAX Experience (WB, July 2012)
Frankenweenie: An IMAX 3D Experience (Disney, October 2012)
Skyfall: The IMAX Experience (Sony, November 2012)
Gravity: An IMAX 3D Experience (WB, November 2012)
CZ12: The IMAX Experience (JCE Entertainment Ltd., Huayi Brothers & Emperor Motion Pictures, December 2012, Asia only)
The Hobbit: An Unexpected Journey: An IMAX 3D Experience (WB, December 2012)