The Canadian-developed big-screen Imax film format began in the 1970s as a means to make spectacular documentaries, but now many Hollywood films are adapted to show in Imax theatres. The latest showcase is the new Batman flick, The Dark Knight Rises; director Christopher Nolan included more than an hour of special Imax footage.
Former investment banker Richard Gelfond, who led a buyout of Imax from its Canadian founders in 1994, has steered the company through a roller-coaster two decades that included two failed efforts to sell the firm, its global expansion, and becoming a key distribution route for blockbuster films.
How has The Dark Night Rises experience been so far?[Last week] I went to the world premiere. About half the film is full screen, top to bottom, in Imax format. It was really an incredible experience and I was grinning through a lot of it. It reminded me of the old epic movies like Dr. Zhivago or Lawrence of Arabia. I was proud to be part of it. I know that sounds corny, but I really felt that way. It was a reinforcement of how far Imax had come.
How important is it for Imax to be so central to this film event?
The most important thing for Imax is our network growth. The Dark Knight – the last one – opened on 149 Imax screens. This will open on more than 500 Imax screens worldwide. The Dark Knight Rises is another step forward [in demonstrating] Imax is here to stay.
You've spent a long time working at expansion in China. Is that developing the way you had hoped?
We have around 80 theatres open in China, and we'll probably have about 225 to 230 in the next couple of years. We have definitely become an important part of the movie-going experience in China. There was no existing infrastructure, like in western Europe or North America, where you had to convince people to stop going to their local theatre and to go to Imax instead. Imax became part of the explosion of multiplex growth in China. Also, the Chinese really like luxury goods, and especially affordable luxuries. Imax is very much an affordable luxury. Our average box office per screen in China is among the highest in the world.
What are other fast-growing international markets?
Russia is growing very fast, for some of the same reasons as China: an emerging middle class, rapid expansion of multiplexes, and more appetite for entertainment. Latin America is on our target list. There are 60 malls being built in Brazil right now. We started the year with three theatres open in Brazil, and by the end of the year we will have eight.
What about North America?
In the last two years our presence in Canada has doubled. I wouldn't have thought that there would be that amount of growth. The United States is a more mature market, but there is definitely room to grow.
AMC, the second biggest U.S. theatre chain, is being taken over by your Chinese partner Wanda Group. What impact will that have on Imax, which has joint ventures with AMC?
It will provide more opportunities. Wanda is an excellent operator. They really understand branding in general, and how to promote the Imax brand in a first-class way. Also, AMC was [previously] owned by an investor group that had one eye on their exit. Wanda has a longer-term perspective, and that will translate into more investment and more marketing.
When you bought into Imax in 1994, you said you intended to be a passive investor, and you have tried twice to sell it. Have you settled in for the long term?
I've been here for 18 years, so clearly if I had a short-term horizon, that was a business plan I changed a long time ago. I have spent the better part of my career here.
There were a number of reasons in the past to [try to] sell Imax. We had a financial partner that needed an exit strategy [but] they are no longer our partners. We also needed to transition from a film-based platform to a digital platform, and the public markets weren't a pretty place to [finance] that. Now, our network is of sufficient size that we can generate recurring revenue on an ongoing basis. We have virtually no debt other than a bank line, and we have significant cash, so we really don't have capital needs.
Is Imax still a Canadian company in any significant way?
There is no question that we are a global company. This year over 50 per cent of our revenues will come from outside North America. But [our office in] Mississauga is still the heart of our company. [It is where we conduct] our R&D efforts. Our manufacturing and assembly is there. Our sales and finance and legal efforts are run out of there. The New York office is based mostly on corporate functions, while Los Angeles handles film relationship and film activity.
Is physical film going to disappear from the Imax world, as it is from the conventional theatre world, in the move to digital?
Unfortunately, I think, the era of film will come to a close, probably in the next five years or so. Fortunately we acquired technology from Eastman Kodak that will create an experience that in certain ways is comparable to film and in certain ways is better than film. The contrast and brightness will be better because of this new laser technology. I hope to be at the point, when we shut off the last film projector, that we're turning on something better.
Is there still room for documentaries and scientific films on Imax?
Without a doubt. We are presently doing one documentary a year, but our hope would be to ramp that up to two or three. One of the issues is that the [museum and science centre] markets have been primarily film, not digital. One of our reasons for shifting to a laser system is to be able to convert the institutional market to digital. When we do that, it will present more opportunities to create content.
Title Chief executive officer, Imax Corp.
Personal Born in Plainview, N.Y.; 57 years old
Law degree from Northwestern University
Worked as a mergers and acquisition lawyer, then started a dry cleaning business
Joined investment bank Drexel Burnham Lambert in the late 1980s
In 1994, led a buyout of Imax and took it public with partner Brad Wechsler
Served as co-CEO with Mr. Wechsler from 1996 to 2009; became CEO in 2009