IMAX CEO Gelfond Discusses Global Expansion, Tech

This marks a significant expansion over 30 years, as the company started with only 50 theaters across eight nations, now offering Hollywood and local productions from regions like China, India, Korea, and Indonesia.

IMAX provides a comprehensive, end-to-end solution for cinema, encompassing everything from specialized cameras to screen presentation.

The company actively monitors all 1,800 theaters globally 24/7, employing real-time feedback to ensure consistent image and sound quality for every film displayed.

IMAX employs an asset-light business model where exhibition partners bear the costs of constructing theaters and installing equipment.

The company generates revenue by collecting a percentage of box office sales from both exhibitors and studios, allowing for growth without significant capital outlay.

This performance is particularly notable given that the film only occupied about 1% of total theater screens, demonstrating significant revenue generation from a limited footprint. Gelfond clarified that while "The Odyssey" is the largest IMAX film, "Avatar" remains the highest-grossing movie globally.

IMAX's screen footprint is identified as the primary constraint on its overall revenue potential, with the format representing just 1% of total global screen counts.

In North America, there are 40,000 total screens compared to only 400 IMAX screens, while China hosts 80,000 total screens versus 800 IMAX screens.

The difference in revenue is not primarily due to ticket prices, which are only about $5 higher for IMAX films, but rather the limited number of available screens.

While IMAX has developed algorithms to upscale standard footage and eliminate grain, shooting natively in IMAX still offers a vastly improved visual experience, avoiding issues like magnified grain that resembles 'boiling oil' in blown-up standard film stock.

IMAX screens start at around 50 feet in height, with the largest screen located near Frankfurt, Germany, measuring the size of a Boeing 737 aircraft.

The process of painting these colossal screens involves a proprietary, secret formula, which Richard Gelfond jokingly compared to the Coca-Cola recipe, and requires renting large arenas and using air freight for shipping.

Their partnership focused on identifying even microscopic imperfections, such as tiny speckles at specific frame counts, ensuring the highest possible image quality in every film.

While the overall theatrical industry is projected to reach $10 billion in 2026, still below the 2019 record of $13 billion, IMAX is setting new performance records.

IMAX is on track to exceed $1.4 billion in earnings, following a record $1.25 billion last year, as consumers increasingly seek premium, out-of-home experiences over streaming after the pandemic.

This approach means major producers and directors, including Jerry Bruckheimer and Joe Kosinski, frequently approach IMAX before securing broader distribution deals.

IMAX actively participates in project planning years in advance, as seen with "Dune" and other projects scheduled for 2028.

IMAX is diversifying its content slate by successfully entering the horror genre with "Resident Evil," and has a packed schedule of upcoming films.

New projects include a groundbreaking collaboration with Netflix for an exclusive IMAX release of "The Misadventures of Cliff Booth" before it streams, marking a first for Netflix.

The lineup also features a re-release of the original "Star Wars" in IMAX film, alongside new blockbusters, sports documentaries, and cultural event screenings.

IMAX strategically avoids the substantial capital expenditures typically required for producing major blockbuster films.

Instead, the company prioritizes selective, event-driven content such as documentaries, concerts, and niche sporting events like the Olympics and League of Legends finals to maintain its unique market position.

IMAX would consider acquiring other entities if they align strategically and leverage its brand equity, which Gelfond considers comparable to major brands like Disney and Nike despite its smaller revenue.

Richard Gelfond noted that for large conglomerates, greenlighting a $250 million movie that only returns $80 million does not significantly impact their overall growth.

This dynamic is driving major studios to increasingly focus on producing "bigger movies" to justify their scale and generate meaningful returns.

Studios currently employ a bifurcated content strategy, balancing Oscar-winning art-house films with large-scale blockbusters.

Richard Gelfond expressed skepticism about the long-term business sustainability of this model, anticipating the future growth of new studios and distribution channels as a reaction to ongoing industry consolidation.

IMAX is deepening its partnerships with streaming platforms, including collaborations with Netflix on "The Misadventures of Cliff Booth" and Greta Gerwig's "The Chronicles of Narnia."

The company produced five films with Amazon this year, notably "Hail Mary" starring Ryan Gosling, which generated approximately $100 million in revenue for IMAX. Gelfond indicated that streamers are increasingly turning to IMAX to give their content a theatrical presence and stand out in a competitive market.

Richard Gelfond recalled a time when he had to actively seek out agents and plead for involvement in projects; today, filmmakers and studios approach IMAX with ideas even before finalizing their plans, reflecting the company's elevated status among top-tier industry names.

IMAX is actively exploring new frontiers beyond traditional cinema, with a significant focus on live events, having already experimented with Olympic ceremonies and concerts.

Richard Gelfond envisions a future where filmmakers might bypass traditional theatrical releases, moving content directly from IMAX screenings to streaming platforms, and highlights his long-standing commitment to films shot entirely with IMAX cameras.