Giant-screen exhibitor Imax posted higher first-quarter revenues as it was lifted by a recovery in the Asian box office.
The company, led by CEO Richard Gelfond, reduced its loss attributable to shareholders to $14.8 million, compared with a loss of $49.4 million last year when Imax was hit hard by movie theater closures during the novel coronavirus pandemic.
Despite the hit to North American movie theaters from the COVID-19 crisis with theater closures and capacity restrictions, Imax has seen strong box office performance for local titles, mainly in China, Korea and Japan as the Asian market reopened. Imax posted an adjusted loss per share of 25 cents, compared with a loss of 48 cents per share in 2020. Analysts had forecast a per-share loss of 26 cents.
Quarterly revenue came in at $38.8 million, against $34.9 million a year earlier. In China, a box office rebound and a pickup in theater installations drove a revenue recovery to a pre-pandemic level of $26 million, in line with first quarter 2019, Gelfond told analysts on a morning call.
“We continue to deliver strong box office and grow indexing across both local language and Hollywood titles. It’s a trend that extends to Japan as well,” he reported as Godzilla vs. Kong and Mortal Kombat have also had global releases. And as an asset-light exhibitor, Gelfond argued Imax has been far less vulnerable to pandemic-era theater closures than major movie theater chains in the U.S. market with whom it partners at the local multiplex.
“And as global markets reopen, we’re able to bounce back quickly to generating box office — essentially flipping a switch without significant start-up costs or lead time,” he told analysts.
Imax said it posted $110 million in global box office, it’s first year-over-year quarterly box office growth during the pandemic era. During the first quarter, Imax said it experienced a strong Chinese New Year period and screened the Japanese box office hits Demon Slayer and Shin Evangelion on its giant screens.
Gelfond on the analyst call discussed Disney using the pandemic era to test consumer appetite for premium video-on-demand, and in particular with the upcoming releases of Black Widow and Cruella, which have prompted speculation of a showdown with theater owners. “Both Cruella and Black Widow will play in the majority of theaters and in the majority of Imax theaters,” he told analysts, while predicting with no certainty that Disney will eventually end up embracing a 45-day theatrical window, in line with other Hollywood studios post-pandemic.
The Imax boss added shorter theatrical windows post-pandemic could benefit Imax, as evidenced by around 1,000 domestic screenings of Godzilla vs. Kong on his giant screens selling out during the film’s first five days of release across North America when it was also available day-and-date on HBO Max.
“People have always been willing to pay a premium price for something special…they want to get out of their houses,” he argued. After the analyst call, Gelfond told The Hollywood Reporter that looking out to the rest of 2021 and into 2022, the health and safety concerns of consumers will begin to recede as the quality of tentpole titles comes to the fore as the main motivation for getting out of homes and into an Imax theater.
Here Gelfond is buoyed by an upcoming Hollywood movie slate that has condensed a number of delayed 2020 and 2021 titles into a theatrical rollout stretching into next year. “In (20)22, whether its Jurassic World, Mission Impossible, Avatar, Spiderman and more Marvel movies, it’s kind of an embarrassment of too many things. There’s a lot of potential,” he said.
But while Imax can work with shorter theatrical windows, what about major exhibitors with whom it has had long business relationships? “For a traditional distributor, there’s still some variables to play out,” he insisted, including whether the terms between the exhibitors and major Hollywood studios change as premium VOD evolves, whether shorter windows may mean better splits for exhibitors and whether shorter windows may attract content now being released online back to the local multiplex.
“So will there be more content that comes into play? Some of that sort of has to play out before we can say what it all means,” Gelfond told THR.
On the analyst call, Gelfolnd also talked about a joint venture in artificial intelligence launched with Maximus, founded by Daniel Nadler, who founded Kensho Technologies, an AI and data science firm sold to S&P Global in 2018 for $550 million.
“Maximus brings not only pedigree and proven success, but also an entrepreneurial, agile approach. We’ve been working with Daniel and his team for a year — as our postproduction and tech teams help develop a proprietary algorithm that can up-res content to 4K, 8K and beyond at high speed,” and with potentially reduced content uploading costs, Gelfond said.
Applications possible via the joint venture with Maximus include high-speed enhancement of library content for streaming, real-time up-conversion of live sports and entertainment, and potential technologies for consumer devices, he added.