When Warner Bros. film executive Jeff Goldstein saw the massive sand dunes and sweeping desert vistas of Denis Villeneuve's first film “Dune,” he thought, “This was made for Imax.”
The same was true for the sandworm sequences in the sequel, “Dune: Part Two,” a blockbuster for the studio earlier this year that earned nearly 24% of its domestic box office revenue from Imax. This weekend’s big-tent action dystopian wasteland, “Furiosa: A Mad Max Saga,” brings even more material to the big-screen format.
Imax's big screens are expected to account for a larger-than-usual proportion of the George Miller-directed prequel's box office sales. (According to analysts, the film will gross more than $40 million domestically during its four-day opening weekend.)
“It immerses you, so you're there,” said Goldstein, president of domestic distribution for Warner Bros. Pictures. “Audiences see Imax as something special.”
As studios and exhibitors lament audiences' slow return to movie theaters since the pandemic, Imax has been one of the few bright spots. This year's box office is down 20% compared to last year, when movies like “Fast to reach Imax screens.
Audience behavior has now changed, and getting people out of their homes and back into theaters requires something special that they can't get at home. That put Imax in a fortuitous situation.
The 57-year-old Canadian company, which operates in Playa Vista, is coming off one of its best years, with Christopher Nolan's “Oppenheimer” helping to boost overall global box office revenue, marking Imax's second-highest-grossing year in its history. . Movies shown in Imax are reaping higher box office numbers, helped in part by higher ticket prices, and that is a powerful draw for studios and filmmakers.
Next year, 13 Hollywood films scheduled for release will be shot on digital cameras or Imax film, surpassing a previous record set in 2021, when seven so-called Imax films were released.
The company hopes that its brand awareness will become so great that viewers will come to their screens first.
“Instead of saying, 'What's happening in the theater?', I want them to say, 'What's happening in Imax?'” said Imax Corp. CEO Rich Gelfond.
For Imax's part, its financial performance in the fiscal first quarter of 2024 exceeded expectations. The company's net income amounted to $3.3 million for the three-month period ending March 31, up 33% from a year earlier, although revenue declined about 9% to $79.1 million. of dollars. Imax shares are up about 10.9% so far this year.
“While there are exceptions like 'Barbie,' it's very, very difficult to be a blockbuster without being on Imax,” said Greg Foster, a former CEO of Imax Entertainment who now runs an entertainment consulting company.
Imax's current overall success is what Gelfond and his business partners envisioned when they acquired the company in 1994. At the time, Imax was essentially a museum staple, although it allowed viewers to immerse themselves in the latest nature film or science documentary. .
The company adjusted its screens and sound systems to suit commercial multiplexes, allowing its business to grow rapidly while limiting costs (Imax does not own the theaters, but rather supplies its projection technology to chains of cinemas). Imax also developed technology to convert films to the Imax format to make them more financially attractive to filmmakers and benefited from the advent of digital film, which made it more profitable.
By 2019, the company had experienced year-over-year global box office growth for several years and expanded its global market share to distribute its box office almost evenly between North America, China, and the rest of the world.
Like its movie theater-owning customers, Imax was hit hard by the COVID-19 business closures. But because the company has few assets and little debt, it was partially shielded from the financial fallout faced by the rest of the industry. The company used the time to update its technology, including a new laser projection system and sound system, worked on its marketing and leaned more toward local-language films, Gelfond said.
Now, in a post-pandemic world, moviegoers want something premium and special for its time, and they are willing to pay for it. This is an advantage for Imax and the so-called premium large format screens operated by cinema chains.
“In an industry that is constantly re-evaluating its present and future in terms of competing with new media and regaining audiences, it is Imax that has been at the center of the conversation when we talk about industry sectors that have recovered. ”said Shawn Robbins, founder of the analysis site Box Office Theory. “It's been a way for studios to have reliability in an often volatile theatrical market.”
Walt Disney Co. has leaned heavily toward Imax and other premium large formats.
Its marketing campaign for “Kingdom of the Planet of the Apes,” launched earlier this month, featured the Imax logo on billboards, bus stop signs and other advertisements. During its opening weekend, 41% of the film's domestic box office came from premium large-format screenings, of which 13% was Imax, Disney said. Normally, a blockbuster that hasn't been shot with Imax cameras, like “Apes,” would get about 10% at the box office, Gelfond said.
As an industry, “we need to give audiences a great experience every time they go see a movie,” said Tony Chambers, executive vice president and head of theatrical distribution at Walt Disney Studios. “Going to see a movie on premium large formats helps drive engagement and frequency.”
From 2022 to 2023, premium large formats accounted for 19% of Disney's total domestic business; just before the pandemic, that total was 15%. Part of that came from 3-D displays, which have been declining in popularity.
The company scored a box office hit with James Cameron's 2022 sequel, “Avatar: The Way of Water,” which generated $1.6 billion in premium large-format revenue out of a total of $2.32 billion (about 11%). of which came from Imax). “Guardians of the Galaxy Vol. 3” obtained 31% of its box office revenue last year thanks to large premium formats.
Especially since the pandemic, there is now more competition for people's time and attention from streaming and social media, making it crucial for studios to give audiences a good reason to get off the couch.
“We need a way to cut through some of the clutter and make it clear to people that you can't wait, that you need to see this on the big screen,” Chambers said. “One of the ways to do that, from a marketing perspective, is to lean heavily on the premium large format.”
For many people, he said, that means Imax. In fact, Imax executives bristle when people lump them in with the other so-called PLFs, which include Dolby Cinema and ScreenX.
Imax box office accounts for 13% of Warner Bros.' total domestic business, compared to 5% to 7% industrywide, according to the studio. Industry-wide, opening weekends typically have 10% to 12% Imax. But some are a bigger draw. The Imax share of the domestic box office for “Dune: Part Two” was 22%.
“It's this whole notion of how to reach critical mass,” Goldstein said. “Imax will help you reach critical mass more quickly.”
The future of Imax depends on continued growth, especially internationally. In 2023, the company had 1,772 screens worldwide, including its institutional theaters and museum screens, a slight increase from the previous year.
The company also plans to expand, particularly into markets it believes are underserved, such as Australia and Japan.
“It has enormous growth potential globally and is certainly not saturated in most of its global markets right now,” said Alicia Reese, media and entertainment analyst at Wedbush Securities. “They should trade at a higher multiple given their growth potential.”
