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The 2024 box office is terrible. But Imax’s big-screen appeal is a bright spot

By Samantha Masunaga, Los Angeles Times
Published: May 26, 2024, 6:07am

LOS ANGELES — When Warner Bros. film executive Jeff Goldstein saw the huge sand dunes and expansive desert vistas of Denis Villeneuve’s first “Dune” movie, he thought to himself, “This was made for Imax.”

Same went for the sandworm sequences of the sequel, “Dune: Part Two,” a box office hit for the studio earlier this year that pulled in nearly 24% of its domestic box office revenue from Imax. The dystopian wasteland of this weekend’s big action tent pole, “Furiosa: A Mad Max Saga,” brings yet more fodder for the big-screen format.

Imax’s giant screens are expected to account for a greater-than-typical share of the George Miller-directed prequel’s box office sales. (The film is tracking to gross more than $40 million domestically for the four-day weekend opening, according to analysts.)

“It immerses you, so you’re there,” said Goldstein, president of domestic distribution for Warner Bros. Pictures. “Audiences look at Imax as something special.”

As studios and exhibitors bemoan 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 pictures like “Fast X,” “Barbie” and “The Super Mario Bros. Movie” propelled ticket sales, and yet studios are clamoring to get onto Imax screens.

Audience behavior has now changed, and getting people out of their houses and back into theaters requires something special they can’t get at home. That put Imax in a fortuitous spot.

The 57-year-old Canadian company is coming off one of its best years, with Christopher Nolan’s “Oppenheimer” helping to fuel overall global box office revenue — marking Imax’s second-highest grossing year in its history. Films shown on Imax are reaping bigger box office numbers, helped in part by higher ticket prices, and that’s a powerful allure for studios and filmmakers.

Next year, 13 Hollywood movies slated for release will be shot on Imax digital cameras or film, beating a previous record logged in 2021 when seven so-called filmed for Imax movies came out.

The company hopes its brand awareness eventually looms so large that viewers come to its screens first.

“Instead of saying, ‘What’s happening at the movies?,’ I want them to say, ‘What’s happening at Imax?’” said Imax Corp. Chief Executive Rich Gelfond.

For Imax’s part, its financial performance in the first fiscal quarter of 2024 beat expectations. The company’s net income totaled $3.3 million for the three-month period that ended March 31, up 33% from the previous year, though revenue decreased by about 9%, to $79.1 million. Shares of Imax are up about 10.9% so far this year.

“While there are exceptions like ‘Barbie,’ it is very, very difficult to be a blockbuster without being in Imax,” said Greg Foster, a former Imax Entertainment chief executive who now runs an entertainment consulting business.

Imax’s current mainstream 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, albeit one that allowed viewers to immerse themselves in the latest nature film or science documentary.

The company adjusted its screens and sound systems to fit in commercial multiplex theaters, allowing its business to grow rapidly while limiting costs (Imax does not own theaters itself, but instead supplies its screening technology to cinema chains). Imax also developed technology to convert movies to Imax’s format to make it more economically attractive for filmmakers and benefited from the advent of digital film, which made it more cost effective.

By 2019, the company had seen year-over-year global box office growth for several years and expanded its global market share to spread its box office almost evenly among North America, China and the rest of the world.

Like its movie theater owner customers, Imax was hit hard by COVID-19 business shutdowns. But because the company has few assets and little debt, it was insulated in part from the financial fallout that the rest of the industry faced. 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 into local language films, Gelfond said.

Now in a post-pandemic world, moviegoers want something premium and special for their time, and they’re willing to pay for it. That’s a bonus for Imax and so-called premium large-format screens operated by the theater chains.

“In an industry that is constantly reevaluating its present and its future in terms of competing with new media and bringing back audiences, it’s Imax that has been at the heart of the conversation when we talk about sectors of the industry that have recovered,” said Shawn Robbins, founder of 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 hard into Imax and other premium large formats.

Its marketing campaign for “Kingdom of the Planet of the Apes,” released earlier this month, prominently featured the Imax logo on billboards, bus stop signs and other advertisements. During opening weekend, 41% of the movie’s domestic box office came from premium large-format screenings, 13% of which was Imax, Disney said. Typically, a blockbuster that hasn’t been filmed on Imax cameras, like “Apes,” would do about 10% at the box office, Gelfond said.

As an industry, “we need to give audiences a terrific experience every time they go to see a movie,” said Tony Chambers, executive vice president and head of theatrical distribution for Walt Disney Studios. “Going to see a movie in premium large formats helps drive engagement and helps drive frequency.”

From 2022 to 2023, premium large formats made up 19% of Disney’s total domestic business; just before the pandemic, that total was 15%. Some of that came from 3D screens, which have tapered off in popularity.

The company saw box office success with James Cameron’s 2022 sequel, “Avatar: The Way of Water,” which brought in $1.6 billion in revenue from premium large formats out of a total of $2.32 billion (About 11% of which came from Imax). Marvel’s “Guardians of the Galaxy Vol. 3” last year brought in 31% of its box office revenue from premium large formats.

Especially since the pandemic, there’s 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 leave their couches.

“We need a way to cut through some of the clutter and make it clear to people that you cannot wait, 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 into the premium large format.”

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For a lot of people, he said, that means Imax. In fact, Imax executives bristle when people lump them with the other so-called PLFs, which include Dolby Cinema and ScreenX.

Imax box office makes up 13% of Warner Bros. overall domestic business, compared to an industry wide 5% to 7%, according to the studio. Industry wide, opening weekends are typically 10% to 12% Imax. But some are a bigger draw. The Imax share of “Dune: Part Two’s” domestic box office was 22%.

“It’s this whole notion of how do you hit critical mass,” Goldstein said. “Imax will help you get to critical mass faster.”

Imax’s future hinges on continued growth, especially internationally. As of 2023, the company had 1,772 screens across the globe, including its institutional theaters and museum screens, up slightly from the previous year.

The company also plans to expand, particularly into markets that it thinks are underserved, such as Australia and Japan.

“It has massive growth potential globally, and it’s certainly not at saturation in most of its global markets at this point,” said Alicia Reese, media and entertainment analyst at Wedbush Securities. “They should trade at a higher multiple given their growth potential.”

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