IMAX is weathering the pandemic better than most of Hollywood

An IMAX theater in Berlin, Germany.
An IMAX theater in Berlin, Germany.
Image: REUTERS/Fabrizio Bensch
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IMAX just had one of its best holiday season performances in years. Despite the growth of at-home streaming and covid-19 hurdles, the premium theatrical experience company managed to gross $277 million at the box office in the last quarter of the year, its best end-of-year showing since 2017.

The company’s fortunes were bolstered by Spider-Man No Way Home, now the most successful Sony release ever at $1.4 billion worldwide in sales. IMAX’s high-end, big screens also played a role, luring movie watchers away from their living rooms and the growing mountain of streaming TV content. 

The strong showing at IMAX theaters offers much needed validation for the in-person theater-going experience in the wake of hybrid streaming releases adopted by major Hollywood studios beginning in 2020 in response to the pandemic.

After Black Widow and Dune experimented with streaming and showing films in theaters simultaneously earlier this year, studios are now testing giving films at least a 45-day window of theatrical exclusivity before making them available via streaming. The success of Spider-Man No Way Home, which was only available in theaters when it was released in December, suggests that this may be the right path. 

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“They do understand that they need an exclusive theatrical window to create the buzz, and the marketing, to allow a piece of intellectual property to achieve its potential over time,” IMAX CEO Richard Gelfond told Fast Company earlier this month. 

The premium movie experience is still worth it for film fans

IMAX has withstood the pandemic somewhat better than traditional movie theaters—and though its revenue dropped 65% last year, AMC and Cinemark fared even worse, with sales down 77% and 80%, respectively. All three companies are expected to report 2021 earnings in February and March of this year. 

The company’s premium theater experiences, which include larger screens and films shot in its proprietary format to appear more immersive and deliver more detail, have outperformed even pre-pandemic earnings. In 2021, IMAX also logged its best October at the box office of all time at $100 million, surpassing its previous record of $84 million in 2013. 

Currently, IMAX operates 1,654 IMAX theater systems in 85 countries, with roughly 952 of those based in the US.

A switch to exclusive releases

Gelfond believes that in-person theatrical exclusivity windows are key to optimizing a film’s revenue over time. ”If you look at a lot of the alternative hybrid streaming releases, after one weekend the drops were precipitous—really sharp,” Gelfond said. “Spider-Man really had room to breathe.”

Gelfond’s sentiments have been echoed by other industry players who have closely watched the hybrid release strategy play out. “Warner Bros…had been experimenting during the pandemic in [2021] of taking movies simultaneously to the home and theaters,” AMC CEO Adam Aron said during the company’s last investor call in November. “That decision may have helped HBO Max, but we think it costs Warner Bros. Studios a lot of money.”

Starting this month, AMC and Warner Bros. will return to the traditional pre-pandemic windows of exclusivity to theatrical releases. 

Exclusive movie releases could change the theatrical landscape in 2022

One of the recent casualties of the hybrid release strategy was The Matrix Resurrections. The film’s opening the week of Dec. 22 drew just $10.7 million at the box office, as HBO Max and pirates offering high-definition versions of the film made it available for watchers at home. And while Dune’s $41 million opening in October was respectable, concerns about its hybrid release led its director, Denis Villeneuve, to speak out publicly, saying, “Streaming can produce great content, but not movies of Dune’s scope and scale.”  

The slate of movies coming to IMAX theaters in 2022, even as the omicron variant surges, will test the notion that hybrid releases were a temporary measure. Among the biggest releases on the way to IMAX theaters are Thor: Love and Thunder, Black Panther: Wakanda Forever, and Top Gun: Maverick. 

“The studio community is somewhat captive to this narrative and a viewpoint that is getting a little bit dated: that you can keep getting more and more subscribers by putting movies on the service,” Aron told Fast Company.