Imax Wants to License Its Technology For 3D Home Entertainment Systems
Imax Corp. will seek to license its technology for high-end home entertainment systems to cash in on the growing 3D craze, executives said on a conference call. The company hasn’t disclosed potential alliances or types of products involved.
Imax will seek partners because its strength isn’t “really manufacturing on a wide scale,” CEO Rich Gelfond said. Imax developed a prototype 3D camera that’s being tested, but on the consumer side, “any kind of mass product, I would be really surprised if we were involved in the manufacturing in any way,” Gelfond said. Among the likely candidates for Imax-based products would be home theater systems and front projectors.
"We may provide other value on a very high end home entertainment system … where you are not delivering tens of thousands of units,” Gelfond said. “Things that are very consistent with our brand-- give us new places to go with our brand than where we have gone before.” The company continues discussions with Sony and Discovery Communications on a 3D channel. Imax hopes to finalize an agreement with Sony and Discovery “very soon,” Heather Anthony, vice president of investor relations, said Monday at the Jefferies investor conference in New York.
With much of its revenue coming from 3D films, Imax benefited from the recent releases of Avatar and Alice in Wonderland. Avatar has generated $231 million revenue for Imax since its release in December, Anthony said. Imax’s version accounted for 18 percent of the box office, she said. Alice in Wonderland has produced $61 million in revenue for Imax since its release in March, 13 percent of the total box office, Anthony said. Imax said it recently signed a development agreement with Warner Brothers that calls for the release of up to 20 films through 2013, including Hobbit 3D (December 2012), Batman 3 3D (July 2012) and Happy Feet 2 3D (November 2011).
Digitally re-mastering films for Imax typically costs $1-$1.5 million, and 3D versions are at the high end of that range, Anthony said. The Imax version of Avatar cost slightly more than $1.5 million, she told us. Despite the higher costs, 2D and 3D ticket prices are about the same, she said. The 2D version of Iron Man 2 opened last weekend with a $14 ticket price, and How to Train a Dragon 3D was $14.75, Anthony said. The 2D Iron Man 2 movie generated $10.2 million in revenue for Imax last weekend from a total box office of $133 million, she said. But Imax’s $57,000 per screen for Iron Man was multiple times the average take at standard theaters, she said. Pixar’s Toy Story 3 3D will be released in Imax theaters in June. Imax sells Real D 3D glasses and believes that being able to view films without glasses is “many years away,” Anthony said. “Especially for the type of quality associated with Imax,” she said. Imax’s “other” revenue in the quarter ended March 31, including from 3D glasses, rose to $2.6 million from $474,000 a year earlier.
Imax will test the “functionality” this month of a portable 470-seat theater with a goal of using it for promotional and other events in the second half of the year, Anthony said. The theater, which will have a 70-foot screen and take about two days to assemble also will be available for sponsorship under a revenue-sharing agreement, Anthony said.
Imax has 438 theaters, including 316 commercial locations, in 47 countries. That includes 252 in the U.S. and 122 in international markets. There were 337 3D Imax theaters March 31, up from 265 a year earlier. It had 101 2D theaters, the company said. Since going all-digital in 2008, Imax has increased its annual film output to 13 or 14 from seven or eight previously, Anthony said. Imax moved to increase the number of jointly owned theaters to 122 March 31 from 69 a year earlier. Imax signed a production agreement with Huayi Brothers Media in 2009 to release up to five films -- the first, Aftershock, in July.