Imax's Richard Gelfond on Virtual Reality, Woody Allen and Reservations Over Netflix
The giant-screen exhibitor's CEO opens up about the 'Crouching Tiger 2' misfire, film versus digital and why China matters (but not as much as you'd think).
Ask any movie executive to identify their biggest challenge, and the answer is universal: Consumers increasingly are loath to leave their homes. But if there's one mogul who has cracked the problem, it's Imax Corp. CEO Richard Gelfond. In 2015, the wide-screen theater company hit $1 billion in worldwide box office and crossed the 1,000-theater threshold (now 1,066 in 68 countries) as revenue climbed to $373.8 million and annual profit rose to $64.6 million. During Gelfond's 22 years at the helm, Imax has evolved from a niche exhibitor of nature and science documentaries to a Hollywood powerhouse. Given Imax receipts typically account for about 10 percent of the average tentpole's box office, studios and top filmmakers frequently shift their release dates to land a big-screen berth. The publicly traded 700-employee company is particularly active in China, where it boasts 589 theaters and has begun financing local films. In 2015, Imax spun off its China division into an entity called Imax China, traded on the Hong Kong Stock Exchange.
Looking forward, the company is making a big push into virtual reality, partnering with Google on a camera, and will launch its first VR space in Los Angeles this year. On the content front, Michael Bay is in talks to create original VR content for Imax. When Gelfond is not traveling because of a "ridiculous schedule" that has him visiting offices in Toronto, Los Angeles, London and throughout Asia 50 to 60 percent of the time, the Long Island native enjoys tennis ("more of a passion than a skill"), theater (he saw Tuck Everlasting on Broadway the night before this interview) and hanging with an eclectic group of friends that includes Woody Allen, Neil deGrasse Tyson, Daniel Libeskind, Arthur Sulzberger Jr. and David Zaslav. The 60-year-old married father of two invited THR to his Upper East Side office to discuss the Crouching Tiger 2 misfire, film versus digital and why China matters (but not as much as you'd think).
What is the mindset behind the VR push?
I've been actively looking for another place to bring the Imax brand because it's such a powerful experience. Virtual reality hit on all the key elements that I thought we could leverage: It will appeal to fanboys and millennials. Virtual reality is going to require expertise in entertainment technology, and Imax may be the leading company in understanding entertainment technology.
Imax isn't known for catering to families. Will that change given the success of The Jungle Book in Imax?
I'm not a person who believes in trends based on one or two movies. And I'm not sure I completely agree with the premise. Star Wars was a family movie, right? You're right that it's not our sweet spot, but I think the right kind of four-quadrant movies do work at Imax. Jungle Book was clearly that right kind of four-quadrant movie, as was Zootopia. But I'm less sure that it's a change in Imax than maybe it's a change in the way the studios are making movies for families. They're doing them a little bit more sophisticated, a little bit more cutting-edge.
How difficult is it to juggle release dates and keep all of the studios happy?
It's increasingly difficult. And it's not only a problem in North America but overseas, too — especially in China because an Imax release window is extremely valuable, particularly around Chinese New Year and other key times. [Imax Entertainment CEO] Greg Foster and his team in Hollywood have really worked so hard at building these long‑term relationships where we try and create a win‑win situation. For example, we'll say to a studio, "We can't do it then, but if you move it to this date, we would make that date available."
Star Wars played for four weeks, which hurt The Revenant in January.
That was just the right amount of time. It played fantastic, and then it started to tail off. The bad news for us is when two really good movies come out at the same time that fit our demographic — they're fanboy; they're blockbuster — but increasingly the Imax release is important enough that they're willing to accommodate.
The Hateful Eight bypassed Imax for a 70mm road show. Your thoughts?
I will say I love film. But digital, especially laser, has evolved to a point where in certain respects and under certain circumstances it's comparable if not better than film. The blacks are blacker in laser than they are in film, and there are other attributes that don't exist. There should definitely be a place for film in the entertainment landscape, and I think efforts to keep film alive and to use it in the right situations, we support.
Any regrets about partnering with Netflix to release the low-grossing Crouching Tiger 2?
I have no regrets about experimenting because, especially with the windows changing distribution patterns, with digital distribution and over‑the‑top alternatives evolving quickly, the industry is going to have to experiment and learn. I'm glad we experimented. With that said, I learned from the experiment that there isn't an appetite among exhibition for day-and-date delivery of movies over Netflix with theatrical distribution.
Would you try the experiment again?
We probably wouldn't do that experiment, but we would try other experiments. If someone came to us and said, "Would you launch a TV series in Imax day-and-date?", that's definitely something we would consider.
Like your recent Game of Thrones experiment?
Which I thought was amazingly successful. The numbers weren't going to move the needle on Imax's financials, but the fact that people lined up and paid a fair amount of money — $15 — to see TV shows, which they could get on-demand for nothing, showed something really powerful about the Imax theatrical experience.
Christopher Nolan was the first filmmaker to use Imax cameras for a Hollywood feature with The Dark Knight. Describe the company's relationship with him.
When Chris envisions a movie, he's so meticulous and so good at planning, and he involves Imax very early on in the process. He'll spend time with Greg Foster and with David Keighley, our chief quality officer, and they'll start to think early on about what aspects of the film could look really good in Imax and how to shoot the film.
Beside Nolan and James Cameron, with which directors do you love collaborating?
There are relationships we have, which are incredibly important to the company, like J.J. [Abrams]. The fact he used the [Imax] camera for part of Star Wars and the Mission: Impossible series and Cloverfield makes him a very important person in the Imax world. The Russo brothers used the Arri Imax camera for about 30 minutes of Captain America: Civil War and are doing the next two Avengers — the whole movies — with Imax cameras. Clint Eastwood is filming most of Sully with Imax cameras.
How important is China to Imax's growth?
It's important to our growth, but I wouldn't say it's more important than the rest of the world. What makes China so unique is it's a ground-floor opportunity: You have this whole industry that's going to be bigger than the U.S. box office in 2017 that came out of nowhere in the last 15 years. There are territories like Germany and France and Italy and Spain that are less penetrated than China is. Latin America is very underpenetrated; the Middle East is very underpenetrated.
What are the biggest challenges Imax faces in its ongoing expansion in China?
I don't think we face a lot of challenges. We have over 300 theaters open; we have over 200 theaters in backlog [where a theater has been approved and the space designated, but it hasn't been built yet]. We just announced a 10‑theater deal. There's lots of growth in the market. I guess the challenge is we can't build them fast enough to meet consumer demand.
Wanda, which accounts for the largest number of Imax screens in China, has its own giant-screen technology. Worried?
I'm not very worried. We face competition all over the world. In the United States there's a category of theaters called "private label theaters," and there are more of those than there are of Imax. But on a per-screen basis Imax generally outperforms them by a lot, and the reason is because we have certain quality levels. If the public wants an experience that's better than a standard 35mm but not as good as an Imax, there's a category they fit in.
In 2015, you announced the creation of the Imax China Film Fund to invest in Chinese tentpoles. What's the strategy?
We have such good relationships in China. We can leverage those relationships, plus the Imax technology, plus the Imax release windows, and create value by investing in the right films. We're not planning on being producers; we're more or less passive partners. We're certainly going to make sure we understand the story and we understand the budget and we're treated the right way from an economic point of view.
Any plans to invest in Hollywood films?
We could get into original programming, but we're not going to be a small participant in a $200 million movie. Could I see there being a $10 million or $20 million film that is with an Imax filmmaker who loves Imax and plays well to the Imax audience and has the right ancillary distribution afterward? Yes. That's something we're exploring.
Where do you stand on Screening Room, the effort to bring first-run movies to homes?
We as a company don't have a formal position. It's premature until we know how the theater owners are going to participate — and how studios feel about it. They tried to do a lot very quickly. This was not an incremental move, and it had a predictable response, which is, we need to learn a lot more. Certainly I don't think it's something Imax would sign up for in its current iteration.
You're good friends with Woody Allen. Would you ever play a Woody movie in an Imax theater?
My wife and I like Woody and [wife] Soon‑Yi very much. (Laughs.) But I don't think he would envision Imax as the perfect forum for a Woody Allen movie. Unless he changes his style completely, it would be hard to argue with that.
This story first appeared in the June 10 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.