Imax May Be The Greatest Film Delivery System Ever Developed, But Will It Prosper?

With Fantasia/2000, Imax looked to be a great hope for animation, now Karl Cohen investigates why this immediate future looks shaky.

Imax and Omnimax (the latter presents films on a giant curved ceiling) are probably the most impressive film delivery systems ever developed. Seeing remarkably sharp and extremely bright 80-foot high images and hearing an exceptional sound system is a commanding experience. The 70mm Imax prints stay free of dust and scratches as the film moves through the projector on cushions of air instead of on rollers. The theaters are lofty spaces with stadium seating and large comfortable chairs.

In recent months several animated works have been released in the medium and more are on the way. Disneys Fantasia/2000 had an extremely profitable run in Imax halls. Theaters showing Cyberworld, a new animated 70mm film, are reporting good grosses.

Everything sounds rosy, so why has Imax stock gone from a high of $60+ at one time, to a low of less than $4 a share in October, 2000? It has lost over 70% of its value. The Canadian Press wrote, "In six weeks the market capitalization has been cut to about $200 million from $1.2 billion" (Oct. 13, 2000). Imax responded by saying the companys stock price, "does not accurately reflect the companys long term value."

Cyberworlds saucy cyber hostess Phig. © Imax Ltd.

First the Good News

When Disney released Fantasia/2000 exclusively to Imax theaters at the beginning of this year they demonstrated that commercial animation can look magnificent on giant screens. When Fantasia/2000 grossed almost $50 million (on 75 screens) before it went into general release in 35mm theaters across the nation, they showed that animated films presented in the Imax format can also be profitable.

Also, with Cyberworlds October release, the film proved that animation in Imax is even more incredible looking when seen using the latest 3D technology. Many, but not all, Imax theaters use state-of-the-art liquid crystal glasses. The 3D effect is easy on the eyes and the glasses are comfortable to wear. Cyberworld is a compilation film full of "cool" looking computer generated images. It is fine eye candy, but weak on story. It may be a hit with young people, but I prefer something with content. The film has grossed $1.9 million in 3 weeks (30 screens).

Animation presented in 70mm showed the potential of the medium as a fine art this year. The Old Man and the Sea is a 22-minute film by Alexander Petrov (Russia/Canada). He created it by painting almost 29,000 images on glass with oil paints. It won the Oscar for best animated short and major prizes at other film competitions. The Old Man and the Sea is one of the greatest animated films I have ever seen.

Scenes from Pandorama by cartoonist/animator Nina Paley, one of the several experimental short animated films being made for Imax. © Nina Paley.

There are also several experimental short animated films being made in Imax. The most recent is Pandorama by cartoonist/animator Nina Paley from San Francisco (www.ninapaley.com). It is a 4-minute, 70mm animated film made without using a camera. She painted her 2,500 images directly onto the film. She also scratched on 70mm black leader and made impressions with rubber stamps. Pandorama has won several festival prizes and is distributed by Xlargo in Paris. Their first sale was to the Cinestar Imax theater in Berlin.

Nearly 3 months went into creating the approximately 2,500 images in the 4-minute, 70mm animated film made without using a camera. © Nina Paley.

Coming Soon in Imax

Mainframe in Vancouver, Canada has announced that Imax has invested $16 million in their company and that they will produce 3 original 70mm animated features for them. The first production is a new version of Gulliver's Travels. An Imax spokesman said at the end of October that no voice artists had been hired and no director had been assigned to the project so it is still in an early stage of development. The Imax press person assumed it would be released next year. Mainframe is best known as the producer of Reboot, the first computer generated TV series for kids.

Several other titles are in pre-production development at Imax. No director or production company has been assigned to any of them. When asked if at least one might be going to Mainframe, I was told, "No comment." The films mentioned by the press are Eddy Deco's Last Caper, based on a Gahan Wilson novel, Rumplestiltskin, a retelling of the classic story in 3D animation, and a new version of Noah's Ark. The Imax person confirmed that the company is developing these titles.

Disney must be thinking about another Imax project since Fantasia/2000 was quite a success. The official word from Disney is there are no definite plans regarding what to do next. The Imax spokesman sounded excited about what Disney might be thinking about, but the official Imax line is they cannot confirm any of the rumors going around.

The enchanting

However, an ominous blip appeared on the radar screen of Imaxs future in early November when after months of production work, Pacific Data Images/DreamWorks announced that they would not be releasing Shrek, their next computer animated feature, on 70mm film 6 months after the picture goes into general 35mm release. The 35mm version is scheduled to open May 18, 2001. The 70mm version was to be in 3D and include new material not in the 35mm version. Marilyn Friedman, head of studio recruitment and staffing at PDI, said that it was substantially different from the 35mm release, so they had expected it to do well in both formats. However, the increased costs associated with the necessary creative changes finally made the production impossible to finish. The film had been slated to appear on 150 Imax screens.

Audiences will have to be content to see the fairy tale parody on smaller screens. Shrek will feature the voices of Mike Myers, Cameron Diaz, Eddie Murphy, John Lithgow and Linda Hunt. The screenplay, based on a childrens story by William Steig, is a fairy tale in which an ugly ogre shows up instead of Prince Charming.

So Why Has The Stock Lost So Much Of Its Value?

Imaxs recent drop in value can be blamed in part on their announcing that they do not expect their third quarter report to show their operation was profitable. The first two quarters of this year saw them have a 40% increase over the same quarters from last year.

Another factor that may have upset investors is the corporation announcing it was for sale. Apparently they wanted somebody with greater assets, like Disney, to take charge so it could grow quickly. Now, with the sudden plunge in their stock value, the company has announced it is no longer looking for a buyer.

A third factor has little to do with Imax, but it will effect their growth for many months to come. Some Imax theaters are owned by chains, so even if their big screen is making money for them, their overall financial picture may not be bright. This year several large theater chains filed for bankruptcy protection. Too many chains rushed into building multiplexes in the late 80s and 90s. Theaters with 10 or more screens and amenities like stadium seating have made more modest complexes obsolete. Now analysts say there are too many theaters for the number of people who normally go to the movies. There are about 36,500 indoor screens in the U.S. at the moment. David Fick, managing director of Legg Mason Wood Walker Inc., suggests we only need about 24,000 screens. Also, there are not enough new releases for the number of halls available, so you often find the same film playing in more than one hall of a multiplex and sometimes playing at theaters near each other.

A Dow Jones report from October 12 says, "uncertainty about how long it will take the industry to rationalize and consolidate is hurting Imax. With 25% of its orders backlog coming from North American operators, troubles for the industry translate into trouble for Imax." Another Dow Jones report suggests it will take at least two years for the theater industry to resolve its problems.

An Imax stock study by Richard Greenfeld in New York suggests that if theater owners are unsure of the market some will cancel orders for Imax systems. This "may reduce the economic justification for original film production in the Imax format, hence limiting attendance growth potential."

The best news from the reports available is that the corporation is estimated to have a large cash reserve ($30-35 million) and a manageable debt, "leaving Imax in a healthy financial position."

Physics-based animation methods in

Different Theatres Have Different Kinds of Programming

The Imax Corporation developed out of a group working on Expo 67 in Montreal. Imax made its debut at Expo 70 in Osaka, Japan. Their first permanent theater was the Cinesphere at Ontario Place in Toronto (1971). The first OmnImax hall was the domed Ruben Fleet Space Theater in San Diego (1973).

The company expanded at first around institutions with an educational mission. Today there are over 220 Imax theaters in 26 countries. Most of those that are in planetariums and science museums do not seem interested in showing general entertainment films. I suspect they will continue showing science and nature films for many decades into the future.

Those theaters in multiplexes and other commercial situations have managers more likely to be interested in showing animation and other forms of dramatic films. Fantasia/2000 made almost $50 million, even though there were only 75 Imax halls willing to book it before it went into 35mm release. (It was shown on 1,313 screens in 35mm theaters, but their gross per screen was far less than what each Imax hall grossed.)

The first film to hatch using the SANDDE system -- the Imax 3D animated film Paint Misbehavin'. © Imax Ltd.

Animation Is A Practical Medium For Imax At This Time

There are several reasons why 70mm dramatic productions havent been the mainstay of Imax operators wanting to keep the public entertained. One is the basic economic realization that if there are only a few houses that will show your finished product, you have to keep your production costs down. Arthur Schwartzberg, president of Xaos, a company that has worked on twelve 70mm productions, said almost all Imax productions in the past have cost around $6 million. Old Man and the Sea cost $3.4 million. Cyberworld, with about 11 minutes of new animation (the rest is clips purchased from other producers), is said to have cost under $10 million.

One reason animation is appealing to Imax producers is they do not have to pay for high priced talent (well known stars, directors, script writers, etc.). With low budgets and expensive lab bills that is a strong incentive to try animation.

Another possible appeal is Imax has developed new tools to make computer animation easier. SANDDE (stereoscopic animation drawing device) is a system that lets the animator draw by waving an electronic wand in space. The artist draws the key frames with SANDEE and then uses Imaxs GEPPETTO system to do inbetween movements (the drawing between the key frames) automatically. Although the systems are still in development, they worked well enough to create some of the CGI footage in Cyberworld and Paint Misbehavin, an entertaining 2-minute short made in 1997. I was told that Imax is a research and development company and SANDDE and GEPPETTO will probably remain "in the active development stage" in the future. Unfortunately, there are no plans at this time to release either system to outside production companies.

When asked how efficient the new animation tools are, the press person did not know. Drawing in space sounds like it would be an easy way to go off model. If that is the case a lot of touching-up of drawings would be required.

Since animation is a popular form of entertainment and it has proven to be a money maker for Imax theaters, we should see a lot more animated productions in the future, but only if the other business factors stay healthy enough to support the company as a whole.

Directing Imax Animation Is Different

For the animation director the 70mm format has to be approached slightly differently than working in 35mm. Working with an enormous picture, especially one that will be seen in 3D, means no fast cuts, quick pans or sudden zooms. Extreme close-ups can be upsetting to some people. Sudden changes of camera angle or lens focal length between shots (like cutting from a wide angel shot to a telephoto shot of the subject) can also be disorienting.

Nick Walker, an animator at PDI/DreamWorks who was working on the conversion of Shrek from 35mm to 70mm, says one problem they faced was having to add more information to shots. For example when they turn a close-up into a medium shot, they may need to add legs if a person is shown in 35mm from the waist up. If the person moves, the legs have to be animated to show the person walking.

Andrei Hedstrom, director of marketing at Xaos says, "We love working on 70mm projects for many reasons. Beyond the hardware and software challenges of storage and bandwidth, our animators are always faced with opportunities to perfect their art. When your work is going to be displayed on a six story screen, suddenly details that might take the minimal amount of consideration for 35mm or TV, are scrutinized to the point of obsession. To perform at this level for the length of time large format projects demand, is proof positive that we can take on anything."

Pandorama, distributed by Xlargo in Paris, has won several festival prizes. © Nina Paley.

Directors are slowly learning how to use the medium best. By having the first theaters in museum settings that were free of most commercial pressures, the creators of Imax films could learn by trial and error how to best use their equipment. Now the pace is quickening. Will the stock holders give the industry the time it needs to learn more about directing and producing 70mm films, or will people wanting a quick profit demand fast results? (Remember that it took 35mm filmmakers at the beginning of the last century 15 or 20 years before they really got good at telling stories.)

Decisions Facing the Industry In The Future

At present almost all 70mm releases run under 45 minutes in length so science museums can schedule shows hourly. (It takes the projectionist nearly 15 minutes to rewind the huge/heavy reel of film and rethread the projector.) What will happen if the public wants longer shows with greater entertainment values? Production costs will certainly go up. Will the public like longer shows if they are produced? At the present time PDI/DreamWorks say they never decided if the 70mm version of Shrek was going to be 45 minutes long or around 80 minutes in length (the Imax person said it was definitely going to be the longer length). One consideration is whether or not the audience will want to wear the 3D goggles for longer shows.

There are other decisions facing the Imax industry including whether or not to produce mainly novelty films that do little more than show off the mediums potential (like Cyberworld), or produce films with real content. There is reason to believe that theaters are reluctant to invest in films noted for content at the present time.

Petrov's daunting task of filling 70mm of celluloid was as much a challenge as the fictional old man's four-day battle with the marlin. © Pascal Blais Productions Inc., Imagica Corp., Panorama Film Studio of Yaroslavl.

A film with emotional and intellectual content is the Oscar winning Old Man and the Sea. It is being distributed by its producer, Pascal Blais, with Hemingway, A Portrait (winner of the Canadian Oscar for Best Documentary). The 40-minute program has only played in Montreal, Paris and a few other cities. Imax films are normally purchased or leased by theaters/theater chains rather than rented from a distributor. Prints are extremely expensive and I suspect the reason it hasnt been seen in theaters in this country is that most film bookers are afraid Hemingway will not have as much draw as Siegfried and Roy, a documentary on Mt. Everest or a film on dinosaurs.

Imax animation is a new art form and in the right hands it can become a great one. When Alexander Petrov came to the Bay Area before the Oscar ceremony, he talked about the problems he had animating for the giant screen. Before he saw his animation on an Imax screen for the first time he was afraid his paintings would look awful. He said, "When I saw the enlarged images in the Imax projection room, I was completely surprised. It is as if my little image had grown. It is... gigantic like a Michelangelo fresco. I am no Michelangelo, but when I see what has become of the small image I have drawn, I say whoaIt is something I could not have imagined." (quote is from www.oldmansea.com)

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In the future peoples viewing habits will change. Wall sized digital systems will probably take away a lot of the 35mm theatrical business. On the other hand the 70mm experience is something that cannot be duplicated at home. There may come a day when these expensive films and projection systems become a major form of entertainment for people wanting to go to the movies. Now, if only they can ride out the tumultuous times ahead, until that day arrives.

Note: The Imax Corporation is also developing other types of products. They are working with large projection systems for digital information. Apparently the Imax ride equipment used in Vegas hotels and elsewhere uses their projectors, but Imax says the rides are not part of their present business.

Karl Cohen is President of ASIFA-San Francisco. His first book, Forbidden Animation: Censored Cartoons and Blacklisted Animators, is published by McFarland Publishers. He also teaches animation history at San Francisco State University.

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