An Imax VR experience: the brand's pilot in Los Angeles was so popular that it’s bringing in $15,000 a week CREDIT: IMAX/ERIC CHARBONNEAU
In an age when consumers can download movies at will, and the technology to serve home entertainment is more varied than ever,
it could easily spell the end for the cinema business.
Yet Richard Gelfond, chief executive of movie technology company, Imax, is more upbeat. "The blockbuster business, which is where we are right now, seems like the best place to be," he says.
Imax's business model involves the licensing of its technology and trademarks to cinema companies. The company provides theatres with equipment including projectors, screens, 3D glasses and use of the Imax trademark. In return, Imax receives a cut of the box office takings. "It's an asset-light model," says Mr Gelfond. "We've been profitable for many years in a row."
But Imax also works with large studios, providing cameras and technology to help them create visually stunning pictures best seen on its own big screens. Mr Gelfond believes that Imax is a "reference theatre" for filmgoers and, by providing the technology to studios and exhibitors, it’s engaged with both sides of the industry’s equation.
As the Imax network has grown, it has gained more clout with the studios and now has movie-making deals with Disney and Warner Bros.
Releases this year include the latest instalments of Pirates of the Caribbean, Transformers and the Disney classic, Beauty and the Beast. But Mr Gelfond knows that his competitors don’t just include other cinemas. Home entertainment brands are also a threat: Netflix, Amazon, Sony (Playstation) and Nintendo (Wii) – to name just a few.
If his partners are to "take people off the couch" then "the experience in the multiplex has to get better and better".
In the past, Mr Gelfond expressed frustration with the pace of growth into Europe, however, the business has now unveiled plans for substantial international expansion.
Consolidation in the cinema market now means that there are bigger players with the requisite budgets to buy into Imax technology. Rather than run away, embrace change and figure out how you can use your brand and technology to capitalise on itRichard Gelfond, Imax
It recently signed a deal with AMC, which owns Odeon and UCI, to roll out its technology across its network. "We announced our largest deal ever in Europe at one time, signing 25 new theatres. Well-capitalised partners with more competition is good for us," explains Mr Gelfond.
The brand already has 400 theatres in China, with plans to double that number. "It’s a very important market for the studios. To attack that market, Imax becomes a very important part of their release pattern. It gives us more leverage to release more and better films."
Imax has come a long way since Mr Gelfond and his business partner, Brad Wechsler, bought the business in 1994. Mr Gelfond has
openly admitted that he knew little about the movie business back then. But he soon realised that he would have to innovate fast to survive the oncoming digital revolution.
So it invested in R&D and acquired companies, such as Manchester-based Digital Projection International (originally created by Rank Organisation to research film projectors) in 1999, to stay ahead of the pack.
"We were fairly early in converting Imax from film to digital," he says. "We never fooled ourselves at the time of the acquisition, thinking that film would last forever. We knew that we would get disrupted if we weren't the disruptors."
He says that business owners will forever be faced with rapid technological shifts, and there's only one way to deal with them. "Rather than run away, embrace change and figure out how you can use your brand and technology to capitalise on it."
Imax is now investing in the virtual reality (VR) space. The sector has been repeatedly tipped as the next big thing, though the medium’s expansion has, so far, failed to materialise. Mr Gelfond blames the lack of content for it and the price point of VR equipment.
There has been some disappointment on the roll-out [of VR] in the home. It has been slower than experts forecastedRichard Gelfond, Imax
However, he believes that people are still interested in the experience and continues to invest in creating VR arcades. The pilot in Los Angeles was so popular that it’s bringing in $15,000 a week. Now Imax has nine more planned, including one in Manchester.
"There has been some disappointment on the roll-out [of VR] in the home. It has been slower than experts forecasted. We stepped back and decided that, for us, this created an opportunity," says Mr Gelfond. "Instead of spending $2,000 for the computer and headset, they could spend $10 for a 10-minute experience in Imax, and they can come back and back."
Mr Gelfond's management style is hands-on. He likes to outline goals for others, but he's not the sort of boss who sits around awaiting results. "I believe in management by motion. I like walking the halls, and meeting partners and customers, rather than relying on intermediaries."
The firm still retains the atmosphere of a family firm, he adds. Mr Gelfond talks to everyone on his management team most days and they spend a lot of time together travelling, dining and on the phone.
His top tip for maintaining a close-knit company culture? Avoid hiring people who lack self-awareness.
"My favourite interview question is: what are your weaknesses?” he says. “If someone says that they don't have any, they’re automatically off my list. I would never hire someone who doesn't know what their weaknesses are.”