Imax signs China deal
Big-screen cinema firm will open 14 hightech laser theaters in the next three years.
Big-screen cinema company Imax Corp. has signed a deal to open 14 of its new high-tech laser theaters in China, in a move to boost its business in a country that has become essential to the success of blockbuster films.
Imax signed a deal with Wanying Cinema Line, a subsidiary of a major stateowned developer, which will use the theaters as attractions to anchor shopping malls across the country, the company said Tuesday. The first of the new theaters will open Saturday in two cities, Chongqing and Taiyuan, with the rest expected to open by the end of 2021.
The deal underscores the continued importance of China to U.S. entertainment companies, as the audience for theatrical movies there continues to grow. The Chinese box office hit a record $7.9 billion in 2017 and is on pace to overtake the U.S. and Canada as the world’s largest film market by 2020, according to analysts.
The nation’s regulatory crackdown on major overseas investments in entertainment and other industries has made Hollywood executives increasingly wary of doing business with China.
But the Imax deal is different because it potentially serves the government’s interests by promoting commercial real estate development in the country.
“This is not a passive investment in an overseas entity,” said Imax Chief Executive Rich Gelfond. “This is an operating business in China that is going to be used for Chinese consumers.”
Imax — a Canadian corporation with offices in New York, Toronto and Los Angeles — has taken pains to crack the Chinese market in recent years. Its Shanghai subsidiary Imax China went public on the Hong Kong stock exchange in 2015.
The venture has weathered some choppy waters, though. The entity’s stock flagged as China’s box office slumped in 2016, and audiences began to increasingly favor local-language movies, rather than the latest U.S. studio imports.
Imax has adapted by putting more Chinese-language movies in its theaters. The strategy appears to be working. Imax’s Chinese theaters generated $190 million at the box office in the first six months of 2018, up 13% from the same period last year.
The company’s latest pact will bring the total number of Imax theaters in China to 900, Gelfond said.
The new Imax theaters will be among the first to feature the company’s new laser screening technology, which offers crisper and more vivid images and more immersive sound than conventional cinemas.
The initiative comes as Imax faces growing competition from Netflix and other rivals encroaching onto its turf.
AMC and Cinemark have been promoting their own premium, large-screen experiences in order to draw increasingly discerning audiences to cinemas. San Francisco tech company Dolby Laboratories, meanwhile, has been pushing its Dolby Cinema offering, which also uses laser-powered projection.
Imax hopes its new experience will set it apart and give customers a compelling reason to pay the higher ticket price. In April, it forged a deal with AMC Theatres to install laser technology at 87 of the exhibitor’s U.S. cinemas. Imax also plans to add or upgrade theaters at 55 sites owned by Regal Cinemas and its European parent Cineworld Group.
“This gets us back to where we were, and then some,” Gelfond said. “I think it will reinforce the fact that Imax is at the top of the food chain.”