Richard Gelfond, the chief executive at Imax Corp., likes to say “eventicize.”
It is not a word. But he believes his massive movie screens — 1,505 of them in 80 countries — can “eventicize” movies, make them premium, something that cannot be replicated at home. And that is why, as cinemas face off with the streaming services, Gelfond is not worried about his business.
“No matter how big your TV set or how good your sound system, it’s not Imax,” he said, awaiting an egg white omelette at the Four Seasons in Toronto on Wednesday.
Lately, whenever Gelfond speaks publicly, people want to know where he stands on Netflix. The streaming service is making major investments in feature films, but has largely avoided screening them in theatres because of an ongoing disagreement with cinemas. Imax could act as a bridge between Netflix and traditional theatres, using its sound and screen technology to do justice to Netflix’s select big-budget productions, but Gelfond is reluctant.
“If they respect the windows, we’d like to work with them,” Gelfond said. The problem is that Netflix has historically not respected windows — cinema speak for the amount of time new releases are shown in a theatre. Usually, it’s three months. But Netflix, Gelfond said, wants to show exclusively in theatres for two or three weeks before putting their films online. And if theatres allow Netflix a small window, the fear is that Hollywood studios will start demanding the same.
“And a lot of the economics upon which theatres are built would start to chip away,” he said. “If a movie is in a theatre for three months, if you want to see the movie you’re going to go to a theatre to see it. If it’s in a theatre for three weeks, then they’re worried people will just wait and watch it at home.”
Gelfond, personally, doesn’t worry much about windows, since Imax only shows blockbusters for their first and second weeks, anyway. But he depends on theatres too much to risk upending their operating model.
Imax itself doesn’t own theatres. Gelfond gets frustrated by this misconception, which he said is common, particularly among the investor set. But Imax is “a different animal.”
It licenses its projection in sound technology to theatres, while working with film producers to use high-resolution Imax cameras or remaster footage shot on other cameras. In exchange, Imax takes a cut of the box office sales. The arrangements vary by theatre and by region, but broadly speaking, Imax usually offers two options: It sells its technology to the theatre and takes a smaller share of ticket sales; or it provides the equipment up front at no cost and takes a bigger portion of sales. Either way, Gelfond said, Imax sees about 20 per cent of ticket sales on average.
In the twenty-five years since Gelfond bought Imax — then a Canadian company started by Canadian filmmakers that showed documentaries and nature films in cinespheres, museums and science centres — it has become a global entertainment brand with screenings that grossed more than $1 billion in 2018. This month, the company saw its fifth-highest grossing film, Captain Marvel, which brought in $36 million in Imax screenings during its opening weekend.
Imax’s major expansion in China has seen the company ramping up its partnership with Chinese productions rather than just offering its slate of Hollywood blockbusters. Earlier this year, the Chinese film, The Wandering Earth, grossed $45 million in Imax screenings.
Still, Gelfond said, Imax gets lumped in with North American theatre chains.
“If it’s a bad weekend for movies in the U.S., our stock will go down,” he said, adding that 70 per cent of revenues come outside North America.
“We’re in a lot of crazy places. We’re in Pakistan. We’re in Oman. We have a big presence in Russia.”