Imax CEO on 'Crouching Tiger 2' Netflix Ruckus: "I Knew It Wouldn't Work for Some People"

Rich Gelfond

Rich Gelfond insists the revolutionary deal to release the sequel simultaneously on Netflix and in select Imax locations does not threaten theatrical windows

Ted Sarandos, the maverick chief content officer of Netflix, first approached Imax CEO Rich Gelfond a year ago with a tantalizing, and controversial, prospect: Why not release new films simultaneously on the streaming service and in Imax theaters?

Those conversations turned into a reality with Monday's announcement that sequel Crouching Tiger, Hidden Dragon: The Green Legend, produced by The Weinstein Co., will make its debut Aug. 28, 2015, on Netflix and in select Imax venues, bypassing traditional theaters. Netflix, intent on getting into the first-run movie business, and Imax expect to release several such titles each year.

Read more Netflix's Ted Sarandos Slams Theater Owners: They 'Try to Strangle Innovation' (Video)

Regal, Cinemark and Carmike, three of the country's four biggest chains, immediately slammed the plan, saying they wouldn't play Green Legend in any of their Imax venues (Regal operates 86; Cinemark, 14). Even as movie  attendance dwindles, theater owners continue to insist upon a three- to four-month window between a movie's debut on the big screen and in the home.

In an interview with The Hollywood Reporter, Gelfond said he was well aware there would be resistance.

"I knew it wouldn't work for some people," Gelfond explained. "We've been an innovator for 20 years and frequently when you come up with a new idea, not everybody is going to like it. I understand that people are reluctant to change, but if you look at our track record, everything that we've done has ultimately benefited the box office. If we sat on our hands, there would be no Imax."

There are roughly 400 Imax theaters in the U.S. and another 320 overseas. Imax itself owns only four or five, while the rest are joint ventures. With Regal and Cinemark out of the running, AMC Entertainment — the country's second-largest circuit — is the big question mark, since it operates more Imax theaters than anyone in the U.S., while parent company Wanda has the biggest footprint overseas.

Read more Imax's Greg Foster on 'Gravity's' Appeal, China and 'Hunger Games: Catching Fire' (Q&A)

So far, AMC hasn't commented on whether it will carry the Crouching Tiger sequel in its Imax theaters, but insiders point out that AMC has been known to rent its theaters to specialty distributors for day-and-date VOD releases. Gelfond declined to comment on those discussions.

"I can tell you that I've met with international exhibitors and domestic exhibitors over a period of time to talk about this from a theoretical perspective. Some were completely opposed, while others said they would be somewhat flexible," he said.

Gelfond said Imax is a "huge supporter of the windowing system" and that it will only release day-and-date Netflix titles during down times at the box office, such as the end of August, when moviegoing falls off dramatically (as fate would have it, the only title set for nationwide release on Aug. 28, 2015, so far is TWC's thriller Regression).

Read more Imax CEO Talks Recent Box-Office Challenges, Touts 2015 and 2016 Slates

"We think of it as alternative content, like the opera. We can come up with a very high quality film and you have the choice to play it. No one is saying you have to play it. We would not do anything to undercut windows. But in this case, at that time of year, it's like the opera or another special event. There are no blockbusters and we are trying to give people a choice," Gelfond continued.

Gelfond said they narrowed in on Green Legend in the last month.

"Originally, they [Netlflix] wanted to release it on a competitive date and we were not interested. We won't disrupt the windowing system," he said.

Two key markets where there won't be a conflict over Green Legend is China and Korea, where Netflix isn't available. Imax has a massive presence in China, where there are more than 130 theaters.

Read more Wanda Orders Up to 120 New Imax Theaters for China

Regal didn't mince words when addressing the Netflix-Imax alliance: "While a home video release may be simultaneously performing in certain Imax locations, at Regal we will not participate in an experiment where you can see the same product on screens varying from three stories tall to 3 inches wide on a smartphone. We believe the choice for truly enjoying a magnificent movie is clear."

For his part, TWC co-chairman Harvey Weinstein praised Netflix when announcing the deal for Green Legend, which comes 15 years after Ang Lee's Crouching Tiger, Hidden Dragon turned into a cultural phenomenon (Lee is not directing the sequel).

“The moviegoing experience is evolving quickly and profoundly, and Netflix is unquestionably at the forefront of that movement,” Weinstein said in a statement. “We are tremendously excited to be continuing our great relationship with Netflix and bringing to fans all over the world the latest chapter in this amazing and intriguing story.”