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Giant-screen exhibitor Imax posted higher first-quarter revenues as a pandemic-era recovery in its North American box office follows a rebounding Asian film business last year.
Imax disclosed global box office of $173.2 million in the quarter, a rise of 57 percent over the same period of 2021, based on the strength of box office for The Batman and Spider-Man: No Way Home. That performance underlined Imax’s rising profile as a platform for Hollywood to eventize blockbuster releases as its giant screens draw premium ticket prices.
“I do think as competitive movies come out in the marketplace, you should see the move to premium in general and Imax specifically,” company CEO Richard Gelfond told analysts during a post-results call.
Imax, with its global footprint, also released a record seven local language titles for a first quarter. That slate included China’s Battle of Lake Changjin 2, India’s RRR, Japan’s Jujutsu Kaisen and in France director Jean-Jacques Annaud’s Notre Dame Brûle, a film about the 2019 Notre Dame cathedral fire in Paris.
Overall revenue for Imax was up 55 percent to $60 million and the net loss attributable to shareholders came to $13.6 million or 23 cents a-share, against a year-earlier loss of $14.8 million or 25 cents a-share.
The latest first quarter loss for Imax included a non-cash provision of $6.9 million, or $0.12 per share, for reserves given the uncertainty of collecting receivables in Russia after president Vladimir Putin’s invasion of Ukraine. “This provision was taken in an exercise of caution due to the ongoing conflict in Ukraine, and covers substantially all of the company’s net receivable exposure in the Russian market,” Imax reported.
During the first quarter of 2021, Imax faced a hit to North American movie theaters from the COVID-19 crisis with lingering theater closures and capacity restrictions, even as it recorded strong box office performance for local titles, mainly in China, Korea and Japan after the Asian market reopened.
One year later, as the North American box office continues to recover as the pandemic wanes, Imax pointed to the promise from upcoming Hollywood releases like Marvel Studios’ Doctor Strange in the Multiverse of Madness sequel, Paramount’s Top Gun: Maverick, Jurassic World: Dominion and Pixar’s Lightyear.
At the same time, Imax reports current closures in its theater network in China as recent COVID-19 lockdowns in Shanghai, Beijing and other cities to stamp out infection spikes impact its Chinese box office performance.
“In China, box office was also a bit softer than anticipated due to rolling closures of certain markets given the resurgence of COVID. We have implemented cost reductions in the market where appropriate. And we are cautiously optimistic around the continued reopening of impacted markets in China,” Gelfond told analysts.
“I don’t think this will be a long term issue there,” the Imax CEO added. Gelfond also pointed to a promising recent increase in the number of Hollywood movies getting into the Chinese market: “While it’s hard to pinpoint the trajectory, throughout the year you’re going to see a rapid return to normalcy.”
Returning to North America, Gelfond reaffirmed the value of the multiplex release for Hollywood studios looking to kickstart the launch of superhero movies and other popular tentpoles ahead of play on digital platforms.
“Our partners at the studios and streamers have told us unequivocally that a theatrical window is pivotal to their strategic plans going forward. And that content that benefits from a theatrical launch performs far better on streaming platforms and drives greater value throughout the chain, most recently evidenced by the strong performance of Spider-Man: No Way Home and The Batman on digital platforms,” he told analysts.
To underline his point, Gelfond added he doesn’t see Hollywood studios returning to a streaming-first movie release model for bigger tentpole titles, as happened during 2021 amid the pandemic. “They had their chance during an existential threat to the whole business, and it didn’t work. That’s an experiment that’s over,” he told analysts.
If anything, Gelfond said recent conversations with studio execs revealed tentpoles that bowed in movie theaters subsequently played better overall on streaming platforms. “It’s all theatrical for the studios. I don’t think you will see a hybrid or a streaming model for a blockbuster film for 2022 or probably beyond. The studios realize that’s a model that didn’t really work,” he insisted.
The Imax CEO later told The Hollywood Reporter that the long-delayed Top Gun: Maverick greatly impressed him when Tom Cruise screened the blockbuster movie for him last year before Paramount delayed a planned Thanksgiving 2021 release to 2022 due to a coronavirus surge.
“I thought it was one of the best films I’d seen in recent memory. I thought it had all the elements, not just the action and photography, but also the drama,” Gelfond recalled.
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