Is IMAX too big to fail? IMAX CEO thinks so.
There is a reason we enjoy going to the movies. No other screen can compete with the sharp images on a giant IMAX screen. The deep colors, explosive sound, and captivating images suck you in all over again. It is why I have been returning to my local IMAX screen to watch classics like Titanic and Jaws in their full glory.
There is something magical about IMAX, and IMAX CEO Rich Gelfond is fully aware of this. Despite many movie theaters struggling to stay afloat after the COVID-19 pandemic, Gelfond believes that IMAX will return to its pre-pandemic gross box office levels of $1.1 billion in 2023.
After the company’s Q4 earnings call, Gelfond told IndieWire that he expects the company’s earnings will go up from 2022’s $850 million. This is a massive increase in profit that many traditional movie exhibitions would see. Gelfond knows that the traditional theatrical model won’t support a profitable return for many exhibitions in the game, but IMAX is in a different league.
“The overall box office in that traditional model won’t support a return to 2019 levels. But the fact that IMAX is in the blockbuster business, not the overall movie business, and the fact that we’re diversified and global, enabled us to get back to those levels, where I don’t think people in other businesses can,” he said.
IMAX caters to the big movies that everyone wants to see. Audiences have demonstrated that they have no reservations about paying a little more for a ticket to see blockbusters like Top Gun: Maverick, Nope, or Spider-Man: No Way Home on the biggest screen with the best quality. Truthfully, audiences are not going to the theater unless they are going for the spectacle of movie watching.
While we all hope for the indie movie to make a strong theatrical comeback, the theatrical model isn’t what it used to be.
In 2019, the box office globally piqued at $42.3 billion. In comparison, the 2022 box office globally made $26 billion, which is still an improvement from 2021 but still leaves room for improvement.
In 2023, IMAX has already made $110 million globally off of Avatar: The Way of Water. With Cameron boasting that the only way to watch the Avatar films in is theaters, it is no surprise that the 1 percent of IMAX screens showing the film hauled in 11.3 percent of the sequel’s global box office revenue. The film quickly became the highest-grossing IMAX release of all time in 48 countries.
“We made a bet that Avatar was going to work, and it did,” Gelfond said. “There was a day when $250 million for a movie was a lot of money, and IMAX did it on only less than 1 percent of the screens in one distribution channel. So the good news is I think the case for Avatar going forward is an obvious one.”
Gelfond isn’t worried about the state of theaters, with places like Regal and its parent company Cineworld closing some of their doors due to bankruptcy. IMAX screens are generally available at the top-performing multiplexes, which won’t close their doors. The company is safe because it didn’t put all of its eggs in one basket.
“I’ve been around IMAX long enough to remember the 2001-2002 bankruptcies, and at that time almost all of our clients were bankrupt, and we’re incredibly stronger than that 20 years later,” he said. “Where our locations are aren’t really at risk because of bankruptcies.”
With upcoming projects like Oppenheimer, Dune: Part Two, Guardians of the Galaxy: Vol. 3, Aquaman and the Lost Kingdom, Fast X, and Mission: Impossible – Dead Reckoning – Part One coming to an IMAX screen near you, it is safe to say that the current industry and audience behaviors are working in the company’s favor.
Do you prefer watching movies on IMAX screens? Let us know in the comments below!
What is this Imax of which you speak? Imax died 14 years ago. Are you talking about that 2 1/2K LieMax that has overcharged customers for over a decade and turned off two generations of movie goers from spending extra on a true large format experience?
February 23, 2023 at 11:56PM
Really a great post it is, going to share my views with my friends about this article.
February 28, 2023 at 3:41AM
a good word
February 28, 2023 at 3:54AM
March 5, 2023 at 6:26PM