Imax May Be The Greatest Film Delivery System Ever Developed, But Will It Prosper?
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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 "Firebird" sprite from Fantasia/2000. © Disney Enterprises, Inc. All rights reserved.

However, an ominous blip appeared on the radar screen of Imax’s 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 children’s 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?
Imax’s 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 "The Steadfast Tin Soldier" created the life-like movement of the ballerina's skirt and hair. © Disney Enterprises, Inc. All rights reserved.

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.)


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