IMAX: THE MAN BEHIND THE LIVING SCREEN
Every child remembers their first IMAX experience but seeing their favourite cinematic thrillers on an IMAX screen is a pleasure that doesn't diminish as we age.
IMAX's core philosophy is to ensure that the quality of the consumer experience is second to none and as such, our research and development investments continue to focus on improving quality versus driving lower costs.”
IMAX has just opened its second theatre in the market and they are currently planning to add a third at the Mall of Qatar in 2016 which will accommodate over 600 patrons.
“Once that opens, we will evaluate the market demand based on box office results and look to add additional theatres in conjunction with our partners,” says Richard Gelfond, CEO, IMAX Corporation in an exclusive email interview with Qatar Today.
Gelfond goes back in time to bring back his experience in this enterprise that has amazed cinemagoers.
“When I came to IMAX, in 1994, I had been an entrepreneur, a lawyer, and an investment banker. I didn't know much about the movie business, but I recognised that the movie-going experience IMAX offered had great potential if we could find the right way to grow,” he says.
But it has not been an easy journey with a product that is far removed from the conventional cinema.
As he explains in detail in Harvard Business Review, “most IMAX movies were nature documentaries shown in the theatres of science museums, and figuring out how to move into mainstream markets proved much more difficult than we'd expected. That was due in part to the technology
constraints of the predigital era; it took years to find ways to make it easy and cost-effective to show IMAX movies in a large number of multiplexes.”
Soon after Gelfond and a friend acquired the company, it was made public, which too came with benefits of liquid funds but had other constraints. “Generally it was a good decision because it gave us access to capital and provided the discipline to profitability,” he says. “On the other hand the difficulty is that a business that could be best run by focusing on long-term objectives and public markets often forces you to pay attention to short-term benchmarks.”
But though tough, IMAX cracked the business by “constant innovation” and “adapting our strategy to fit the Hollywood way of doing business” and Gelfond reveals the latest success figures of this innovation.
“The demand for IMAX globally has never been stronger with over 100 new signings for screens so far this year. We already operate 880 IMAX theatres in 60 countries across the globe, and our most recent quarter generated $169 million (QR620 million) in global box office – a 28% increase over the previous year. We have been delighted by the success of our international growth strategy which we are continuing to deliver. This has seen revenues outpace the US domestic box office for IMAX in every quarter since 2013,” he says.
Gelfond has a strategy in place for the future with “IMAX continuing to execute our international growth plans and looking to secure a greater footprint in under-penetrated markets in the Middle East. We must ensure that we innovate and adapt to suit the demand and shifts in the industry,” he says.
In an era where nano technology is gaining popularity, will the “big is better” screen of IMAX and its live imagery be the future of technological innovations? Gelfond is confident that the digital advancements in entertainment have transformed the way in which we consume entertainment. “The cinematic experience must now supersede the at-home offering in order to attract consumers. IMAX's immersive cinematic experience offers something consumers cannot create at home and we are confident that we can continue to deliver, with compelling content and state-of-the-art technology,” he says.
The Middle East market is the big bet for Gelfond and his team. He says, “We are planning to double the IMAX footprint in the region from 15 to 30 outlets by 2017. We have been expanding cautiously in this area since the turn of the century, growing from two IMAX outlets to 15 today. Already we are set to open outlets in Bahrain and our second theatre in Egypt in 2015. The Middle East is relatively under-penetrated compared to other markets and we are excited to harness this opportunity.”
Pay for quality experience
But does a premium cost justify an IMAX experience, we ask the man behind the brand and he says: “IMAX's core philosophy is to ensure that the quality of the consumer experience is second to none and as such, our research and development investments continue to focus on improving quality versus driving lower costs. Our experience over the past decade indicates to us that consumers are willing to pay a premium for a quality experience that they cannot experience anywhere else.”
But IMAX went through some of its toughest periods after it had adjusted the business model to cater to the requirement of Hollywood movies and theatre owners. “In the early 2000s most of the major theatre chains in America (and many around the world) filed for bankruptcy, and we were left with big receivables we couldn't collect. IMAX still carried a lot of debt as a result of the 1994 LBO, and sometimes we doubted whether we would earn enough to meet those obligations,” he says.
And it is then that Genfond learnt some important life lessons. “I've learned that failure is life's greatest teaching lesson. I've had to learn the hard way myself, whether overcoming unforeseen obstacles, managing an organisation in a downbeat mind set or repositioning and redefining models that didn't work. Failure helps you find inner strength. It also helps you appreciate success and understand its fragility.” And then came the turning point in the form of Avatar. “The moment I knew we'd make it came in when Avatar opened. The IMAX version was a global phenomenon. In China there were six-hour lines to get in, and scalpers were charging $100 (QR364) a ticket. Avatar did $250 million (QR910 million) globally on IMAX screens; because we shared in that revenue, it was a financial turning point for us,” he says