'Dark Knight' fuels sunny day at Imax
Top exec calls weekend haul a 'game-changer'Imax has been thisclose to breaking big on the exhibition scene, well, seemingly forever. So it might ring a bit hollow when execs predict that favorable publicity from Imax's role in the record success of "The Dark Knight" will prove to be a watershed for the giant-screen vendor.
"This is a game-changer for us," Imax Filmed Entertainment president Greg Foster said.
The claim — made in the heady afterglow of Warner Bros.' record bow of its latest Batman sequel — is similar to sentiments expressed by Imax execs at various points in recent years, when Hollywood films like "The Matrix" and other big commercial releases started hitting giant-screen venues simultaneously with conventional theaters. Yet for all that hype, Imax's usable base of commercially viable screens has yet to hit triple digits domestically.
So why might success with "Dark Knight" finally push Imax into the exhibition mainstream? Two big reasons, potentially:
> The $158.4 million opening for the latest Batman sequel featured $6.2 million from just 94 Imax screens, or a mind-numbing $67,000 per venue.
> The unprecedented giant-screen grosses come just as the company is making a big push into digital exhibition.
That latter point is particularly important.
The digital push is lowering exhibitors' costs on Imax equipment for prospective partnerships — from $1 million-plus per installation to about $150,000. So combined with favorable publicity from its "Dark Knight" success, Imax hopes to have a much larger installed base of giant screens soon.
It also will help Imax participate more aggressively in the spreading 3-D mania.
The Warners-distributed adventure film "Journey to the Center of the Earth" enjoyed a much better market "hold" this weekend than other holdover titles, primarily because its hundreds of 3-D screens bolstered its overall weekend gross. All of the film's 3-D screens were installed by RealD, a vendor of digital 3-D systems.
Now 40 years old, Toronto-based Imax operates 160 screens in North America. But many of its screens are in institutional venues considered inadequate to needs of commercial releases, so Warners was limited to 94 noncompetitive venues for "Dark Knight."
Internationally, Imax has 140 screens, but only about 60 of those are suitable for Hollywood-style exhibition.
Imax probably will never see its domestic screen count hit 1,000, in keeping with the exclusive, high-end premise it offers for the moviegoing experience. But execs hope to supplement its current inventory with at least 200 new screens within two years and expect to have about 40 new domestic screens and 10 overseas installations up and running by year's end.
"Within a two-year period, we're going to go from 160 worldwide to at least 360," Foster said. "And my guess is it's going to be more. My phones are ringing today like you can't imagine."
Even if Imax's new installations roll out at the lower end of expectations, Warners should be able to show its sixth "Harry Potter" movie on about 130 or more Imax screens in November.
"I'm thrilled for the success in Imax," Warners domestic distribution president Dan Fellman said. "We've come a long way together, and it doesn't get any better than this. They've been able to create a very prestigious branding of their product, which has helped to event-ize our films, not only with our consumers but with our fimmakers as well."
Imax auditoriums appear likely to do land-office business for weeks with "Dark Knight," whose director Christopher Nolan shot 30 minutes of the almost 21/2-hour film using an Imax camera to add to its giant-screen impact. The Christian Bale starrer is largely sold out on its Imax screens through next weekend, though exhibitors have been getting creative in shoehorning in additional showtimes in some venues, Foster said.
Imax's ever-struggling stock price has been bolstered considerably by the "Dark Knight" success.
Shares are up 23.5% since a near-term bottom of $6.29 on July 3. They were up fractionally Monday to $7.77.
Wall Street seems eager to buy into the notion that "Dark Knight" will prove a big event for the little company with the giant movie screens. All of the analysts covering the stock now rate it a "buy" or "strong buy."
"This weekend's record-breaking results could be a welcome start to what we expect to be a game-changing era for Imax," said Merriman Curhan Ford's Eric Wold, who reiterated a "buy" recommendation Monday.
Imax also might benefit from the U.S. economic downturn by offering "a differentiated viewing experience for consumers — one that becomes even more enticing as consumers keep more of their entertainment spending local during a tough economy," the analyst said.
The huge Imax screen average for "Dark Knight" almost doubled the $37,000 average of the past 13 commercial films playing on Imax screens. From an industry perspective, the giant screens "generated about 4% of the total weekend boxoffice on less than 1% of the screens," Wold noted.
Imax's longer-term market fortunes are tied less to "Dark Knight" than its digital rollout.
Recent share-price catalysts included news of a 100-theater joint venture with AMC and a 31-venue pact with Regal. That sort of growth is expected to shape a climb in earnings before interest, taxes, depreciation and amortization from $27 million this year to $100 million by the end of 2010. (partialdiff)