Christian Bale stars in this summer’s “Batman Begins,” one of a handful of big Hollywood movies to be released in IMAX format.
Warner Bros.
Christian Bale stars in this summer’s “Batman Begins,” one of a handful of big Hollywood movies to be released in IMAX format.
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updated 6/10/2005 11:10:57 AM ET 2005-06-10T15:10:57

Hollywood studios might not be exaggerating when they say this year's summer blockbusters will be bigger than ever before.

A record number of major Hollywood studios are set to release big films like “Batman Begins” and “Charlie and the Chocolate Factory” in six-story-high, high-definition IMAX theaters during the summer movie rush in addition to regular cinemas — a move reflects a growing appetite for movies on a really big screen, analysts say.

“Just a few years ago, IMAX was begging studios to put movies on an IMAX screen in their theaters, but now studios are fighting for space,” said Eric Wold, managing director of equity research at San Francisco-based securities broker-dealer and investment bank Merriman Curhan Ford & Co.

“The company’s intention has always been to have five or six big Hollywood movies a year in IMAX,” Wold said. “And now all of the planned IMAX movies for 2005 are set, and IMAX is already in discussions for 2006, with nine movies competing for six available slots.”

A growing acceptance of films on large-sized movie screens is a boon for Toronto, Canada-based IMAX, which said earlier this month it returned to profit in the first quarter as it installed three times as many of its big-screen theater systems as in the same period one year before, clinching deals in far-flung locations like China and Kuwait.

The company has sealed deals to install its big screens in U.S. theatres too. Earlier this month, IMAX and AMC Entertainment said they have formed a joint venture to install five IMAX screens in AMC multiplexes in Kansas City, Mo., Detroit, Phoenix, Oklahoma City and Omaha, Neb. The five theaters are expected to be up and running by September 2005 with IMAX and AMC sharing installation costs and profits.

Revenue-sharing deals are a smart move for IMAX, says Wold. The company gets 12 to 15 percent from a movie studio for a Hollywood film released in IMAX format, and 5 to 7 percent of the money made at theaters that show the movies, he said.

“So more blockbuster movies out in the IMAX format stands to build the company a substantial amount of revenue without a great deal of extra costs, and that will be a big deal as they grow their base of IMAX theaters,” Wold said, adding that he expects that number to grow from the current level of about 250 theaters to 450 theaters by 2008.

“IMAX has turned a corner, and this could be just a starting point for IMAX — they have been fighting for this situation for years,” Wold said.

Not just nature films
There’s a growing acceptance of IMAX in the creative community notes Laura Martin, a Los Angeles-based analyst for Soleil/Media Metrics.

IMAX viewers have mostly been used to seeing nature documentaries and educational films screened at museums, but over the last few years the company has made a concerted effort to push its business into for-profit movie multiplexes, with a strategy to use its DMR process — which allows for a 35mm movie to be enlarged for an Imax screen without compromising picture quality — to convert popular Hollywood films like “Harry Potter and the Prisoner of Azkaban” into a format that can be shown on gigantic screens.

Indeed, Much of the current buzz about Imax springs from last holiday season’s 3D version of animated movie " The Polar Express ," which grossed some $2 million in Imax cinemas on its opening weekend last November. IMAX plans another 3-D production this fall called “Magnificent Desolation: Men Walking on the Moon,” a movie co-produced by Tom Hanks that promises to give audiences the experience of walking on the Moon’s surface.

Another reason for the interest in IMAX is sluggish box-office sales.

Movie theaters want to take market share from other theaters, but at present theaters have no good way to add value for their customers, apart from how close their theater is and when a movie starts, Wold said. “But if you can be only theater in town with exclusive rights to show Imax, you will take market share, and from a studio’s standpoint no matter how much it costs to make movie, you have to charge the same ticket price. But if you are showing "Batman Begins" on IMAX, you can stand out and charge a premium price.”

Theaters can typically charge 30 percent more for a movie shown in IMAX.

Will IMAX catch on?
But according to Todd Chanko, a media analyst at Jupiter Research, the jury is still out on whether IMAX will become a commercial success.

“It could be used by the film business to reinvigorate the movie-going experience, but the paradox here is there is a tremendous rise in the DVD sell through market, and films are being sold directly to consumers on DVD about six months after theatrical release,” he said.

Chanko also points to Jupiter Research data on how consumers use range of media, which show 6.3 percent of consumers tend to go to a movie theater to watch a film two or three times a month, compared with 12.9 percent who rent movies from a video rental store two or three times a month.

“People choose very carefully where they spend their movie-going dollars,” Chanko said. “That may bode well for IMAX, but there is a limited amount of energy being spent by movie goers in going to movies, and there are so many other options available, from cable television to the Web and to a larger extent video and DVD, so I think the jury is still out on this.”

Reuters and the Associated Press contributed to this report.

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