Imax Doubles Down on China With New Deal as Theaters Buzz Again
Imax Doubles Down on China With New Deal as Theaters Buzz Again
(Bloomberg) -- Imax Corp. sees the potential to add at least 400 theaters in China by 2023, as the cinema chain operator looks to expand its footprint in a country that’s emerged as the world’s largest movie market this year.
The Ontario, Canada-based firm known for massive screens in its movie halls, has signed a deal with its Chinese partner Guangzhou Jinyi Media Corp. for five new locations and upgrades at seven existing ones, it said in an email. Imax, which has about 700 theaters in China, sees the possibility of expanding its network by more than 50% over the next three years, it added.
The theater chain is stepping up its commitment in China as the Asian country rebounds strongly from the coronavirus pandemic-induced slowdown while the outbreaks continue to ravage the U.S. and Europe. While both U.S. and China contributed about a third of IMAX’s global box office in 2019, the latter has surpassed the U.S. as the world’s top film market this year underscoring its importance for movie hall operators.
“One big vote of confidence in the Chinese market is that a number of our Chinese leading exhibitors are adding more theaters to their Imax footprint,” Imax Chief Executive Officer Rich Gelfond said in an interview. The company has also “been on a trajectory to release more local language Chinese films,” he said.
China’s box-office gross revenues touched 16.4 billion yuan ($2.5 billion) this year, compared with about $2 billion ticket sales in the U.S., according to data from ticketing platform Maoyan Entertainment and market tracker Box Office Mojo.
‘Leg Up’
“IMAX’s exposure to China’s quick box office rebound gives it a leg up against regular theaters that have a greater presence in North America and Europe, where the recovery has been tepid,” Bloomberg Intelligence analysts Geetha Ranganathan and Amine Bensaid wrote in a Nov. 17 note.
Box office revenues in China are now at 75% of the levels seen last year, owing to local-language blockbusters such as “The Eight Hundred,” -- also the world’s top-grossing movie this year -- Gelfond said. The pandemic has also accelerated the company’s commitment to releasing more Chinese-language films, he said.
While China has become an increasingly important movie market, it has also become a tricky one as it witnesses a heightened sense of nationalism.
As people get fatigued with social distancing and vaccine initiatives become more widespread, Imax expects movie watchers to return in hordes. And not just in China.
Ticket sales in Japan in the past three months have reached the same level in the year before while South Korea too has seen a strong comeback, according to Gelfond.
“When people feel safe going to the movies, they are coming back in very large numbers,” he said.
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