Speaker 1: For more on the future of the movie business. I'm
Speaker 1: thrilled to say we're joined now by Richard Gelfon. He
Speaker 1: is the CEO of IMAX. It's great to see you
Speaker 1: in person.
Speaker 2: Nice to see you. It's been a while, it has been.
Speaker 1: And things have obviously changed in the last couple of years.
Speaker 1: So let's dive into this year's current box office because
Speaker 1: I was reading right now, we're down about twenty percent
Speaker 1: compared to last year. But then you take a look
Speaker 1: at IMAX's most recent earnings report, you beat expectations. Your
Speaker 1: shares are pretty much on par with the S and
Speaker 1: P five hundred this year. So I'm curious how you
Speaker 1: disconnect IMAX from just the general health of the box office.
Speaker 2: Well, the simple answer is our earnings aren't really leverage
Speaker 2: to box office. The comps that she just went through
Speaker 2: are North American exhibitors. We're not North American and we're
Speaker 2: not an exhibitor, so we're global. Two thirds of our
Speaker 2: revenues are from outside of the United States. Our business models,
Speaker 2: we license our technology, We don't sell popcorn. We have
Speaker 2: very little to do with the kind of model that
Speaker 2: exhibitors are. And when you look at our sources of content.
Speaker 2: They're very different. So over twenty percent of our revenues
Speaker 2: come from foreign language films. You know, the North American
Speaker 2: exhibitors are zero. You look at last year twenty twenty three,
Speaker 2: it was about equal to our best year ever, which
Speaker 2: is twenty nineteen, and exhibitors or twenty percent off that,
Speaker 2: and even our percentage of the box office. So she
Speaker 2: was talking about Memorial Day, we did over twenty percent
Speaker 2: of the global box office and even for Furiosa, and
Speaker 2: even higher than that in North America. So we're not
Speaker 2: we you know, it's one of these things I was
Speaker 2: hearing this morning that somebody said you have to say
Speaker 2: something sixteen times before anybody pays attention, but I'll make
Speaker 2: it seventeen. You know, we're not an exhibitor. Our model
Speaker 2: is just very different, and I think post pandemic. Also,
Speaker 2: there's been this push to premium, whether it's premium sporting
Speaker 2: events or concerts, and imax is the best way to
Speaker 2: experience things. So of the people went to Furiosa, they
Speaker 2: wanted to see in an imax in a disproportionate amount.
Speaker 2: And then the last thing I would say looking backwards,
Speaker 2: because I think we're at a pivot moment is that I
Speaker 2: think people have forgotten about the actors' strike and the
Speaker 2: writer's strike last year. So when you compare it to
Speaker 2: Memorial Day, you need to put an asterisk back. You know,
Speaker 2: it's still only halfway open and in the process of
Speaker 2: reopening because a lot of those films got delayed and
Speaker 2: we're now at kind of a turning point where I
Speaker 2: think for the second half of this year and twenty
Speaker 2: five and twenty six, it's going to be dramatically different.
Speaker 1: So a lot to get into there. Let's start with
Speaker 1: that point, though, that you've made seventeen times, you might
Speaker 1: have to make it an eighteenth time because my next
Speaker 1: question is, I mean, there's been estimates that there might
Speaker 1: not be a blockbuster that surpasses a billion dollars this summer.
Speaker 1: And I hear what you're saying in terms of your
Speaker 1: business and how it functions, but even still, I mean,
Speaker 1: does that impact you. What would that look like if
Speaker 1: we really do just have a dot of a summer?
Speaker 2: So, first of all, I don't think there will be one,
Speaker 2: because you have big movies coming out like Despicable Me
Speaker 2: for and you have Deadpool versus Wolverine and even Bad Boys,
Speaker 2: which is next week, is tracking to pretty good numbers,
Speaker 2: so I don't think that's right. But you know, there's
Speaker 2: no magic around the billion dollar number. I mean, if
Speaker 2: you're an exhibitor, I think there might be because you'll
Speaker 2: have multiple screens and you need to have those kind
Speaker 2: of breakout hits to work. But I'max as a single
Speaker 2: screen company. Our last seven movies in a row have
Speaker 2: all done double digit indexing. So what that means is
Speaker 2: over ten percent a less than one percent of the screens.
Speaker 2: So it's just a different business proposition. It's like comparing
Speaker 2: us to you know, a company that shoots rockets to Morris.
Speaker 2: I mean, it's not the same kind of thing. But
Speaker 2: when you look at twenty five, for example, I mean,
Speaker 2: the slate is ridiculous, and I'll go out on a
Speaker 2: limb and I'll say, you know, not only for IMAX,
Speaker 2: but I think the industry is going to see twenty
Speaker 2: nineteen or better numbers. They're just stacked up like planes
Speaker 2: waiting to land. And it just hasn't been anything resembling
Speaker 2: normal coming out of the pandemic, going into the strikes.
Speaker 2: I mean, I think we're finally getting to that period now.
Speaker 1: And when it comes to the twenty twenty five slate,
Speaker 1: that's even with the of course lagged impact of the
Speaker 1: writer and actors strike that we saw last summer.
Speaker 2: No, I think enough time has gone by where that'll
Speaker 2: be over by then. And one of the points I
Speaker 2: should make is that one of the great things that's
Speaker 2: gone on at IMAX is special filmmakers so like Chris
Speaker 2: Nolan or Denis Villeneu have shot using IMAX cameras, and
Speaker 2: on those movies we really index, some people really come out.
Speaker 2: So between next May and next September, there are eight
Speaker 2: movies in a row that are shot using iMX cameras,
Speaker 2: and they include things like Top Gun, Formula One, A
Speaker 2: Mission Impossible, two Marvel movies Superman. So I think we're
Speaker 2: pretty much getting back to normal for the exhibition industry,
Speaker 2: but for IMAX it should be much better than it
Speaker 2: was pre pandemic.
Speaker 1: And you did make the point that when you take
Speaker 1: a look at your business, it's not just North America.
Speaker 1: Of course, you're very exposed internationally as well, And with
Speaker 1: that in mind, I'm really curious to hear how China
Speaker 1: is faring from your perspective.
Speaker 2: So China, this will surprise a lot of your audience.
Speaker 2: But China last year was eighty five percent of its
Speaker 2: pre pandemic high, which don't you think that would surprise
Speaker 2: people when they hear about the Chinese economy and how
Speaker 2: you know, various sectors aren't doing well. The movie sector
Speaker 2: did really well last year. In terms of this year,
Speaker 2: I think it's going to be back and waited. Chinese
Speaker 2: New Year had a kind of a more eclectic mix
Speaker 2: than in other years, so it did okay. I think
Speaker 2: it was the third best one. But this summer there's
Speaker 2: a lot of really good movies coming out. There a
Speaker 2: film called Najah, which is one of the biggest movies
Speaker 2: they've had. There's a sequel, there's a new Jackie Chan
Speaker 2: movie coming out with Bona. So again, I think you'll
Speaker 2: see that manifest itself later in the year.
Speaker 1: And you mentioned that, you know, some of the big
Speaker 1: name filmmakers that have been shooting on Imax cameras. You
Speaker 1: have a lot of demand from Hollywood. I am curious
Speaker 1: whether big tech is also calling as well. When you
Speaker 1: think about Amazon, Apple, Netflix, for example.
Speaker 2: So Amazon is a great starting point. We made a
Speaker 2: documentary called Blue Angels, and we made it with a
Speaker 2: bed robot, JJ Abrams and Glenn Powell, and we sold
Speaker 2: that to Amazon. So we launched it in Imax theaters
Speaker 2: and it became the number one doc of the year
Speaker 2: on all two hundred Imax theaters. A limited run. It
Speaker 2: opened this last weekend on Amazons streaming and was the
Speaker 2: number one movie of any kind on Amazon streaming. Now,
Speaker 2: I'm not just talking documentaries of talking any movie. So
Speaker 2: that's an example how we're working with the streamers and
Speaker 2: leveraging with the streamers. Also, the Formula one movie which
Speaker 2: I just mentioned, which is being shot by Joe Kazinski
Speaker 2: and stars Brad Pitt, I mean Race Cars and Imax.
Speaker 2: I think it has a lot of potential. That's an
Speaker 2: Apple movie, and they struck a deal with Imax for
Speaker 2: the release before they even announced the distributor. So I
Speaker 2: think that's a really good quadrant for us because especially
Speaker 2: you know, Imax really eventticized the whole movie chain. So
Speaker 2: I think the streamers recognize that, and I think by
Speaker 2: having a theatrical release through Imax, it enhances the value
Speaker 2: to them on streaming.
Speaker 1: Well, I'm sad to say unfortunately we have to leave
Speaker 1: it there. Really enjoyed this conversation. Have to have you
Speaker 1: back soon. Let's not wait a couple of years here,
Speaker 1: thanks of course to Richard Gelfon of IMAX