Imax doubles down on China with expansion and upgrades

Imax Corp. sees the potential to add at least 400 theatres in China by 2023, as the cinema chain operator looks to expand its footprint in a country that's emerged as the world's largest movie market this year.

The Mississauga, Ont-based firm known for massive screens in its movie halls, has signed a deal with its Chinese partner Guangzhou Jinyi Media Corp. for five new locations and upgrades at seven existing ones, it said in an email. Imax, which has about 700 theatres in China, sees the possibility of expanding its network by more than 50 per cent over the next three years, it added.

The theatre chain is stepping up its commitment in China as the Asian country rebounds strongly from the coronavirus pandemic-induced slowdown while the outbreaks continue to ravage the U.S. and Europe. While both U.S. and China contributed about a third of Imax's global box office in 2019, the latter has surpassed the U.S. as the world's top film market this year underscoring its importance for movie hall operators.

“One big vote of confidence in the Chinese market is that a number of our Chinese leading exhibitors are adding more theatres to their Imax footprint,” Imax chief executive Rich Gelfond said.

The company has also “been on a trajectory to release more local language Chinese films,” he said.

China's box-office gross revenues touched US$2.5 billion this year, compared with about Us$2-billion ticket sales in the U.S., according to data from ticketing platform Maoyan Entertainment and market tracker Box Office Mojo.

“Imax's exposure to China's quick box office rebound gives it a leg up against regular theatres that have a greater presence in North America and Europe, where the recovery has been tepid,” Bloomberg Intelligence analysts Geetha Ranganathan and Amine Bensaid wrote in a Nov. 17 note.

Box office revenues in China are now at 75 per cent of the levels seen last year, owing to local-language blockbusters such as The Eight Hundred, — also the world's top-grossing movie this year — Gelfond said.

The pandemic has also accelerated the company's commitment to releasing more Chinese-language films, he said.