An Imax and AMC Venture will Expand 3-D Theaters
"Imax and AMC Entertainment are teaming up to open 100 Imax theaters, doubling the number of large-format 3-D outlets in the United States and adding momentum to Hollywood’s growing interest in the genre.
The deal involves equipping 100 of AMC’s existing auditoriums with next-generation Imax projection systems, which rely on digital images rather than film and are meant to provide an immersive viewing experience.
Imax will shoulder the expense of the projectors, which cost about $500,000 each. AMC, one of the world’s largest movie theater chains, will pay to retrofit auditoriums in top-performing movie complexes in 33 cities, reconfiguring the seats and enlarging the screens.
The partnership comes as Hollywood rushes to churn out 3-D movies. Steven Spielberg and Peter Jackson have agreed to direct and produce a trilogy of 3-D movies about Tintin, the Belgian comic book hero. DreamWorks Animation recently announced that it would distribute several future movies in 3-D, including “Shrek Goes Forth.” James Cameron’s coming “Avatar” is being prepared in 3-D.
In gearing up more theaters, Imax and AMC are chasing different goals. AMC, which is based in Kansas City, Mo., is trying to battle an industrywide slump in attendance while squeezing out more revenue from existing auditoriums. Because Imax tickets cost an extra $2 to $4, the conversion should increase revenue in the converted auditoriums by one third, according to Peter C. Brown, the chief executive of AMC.
For Imax, the joint venture carries extra weight. The company, with headquarters in New York and Toronto, has struggled to expand into mainstream movie theaters from its roots in science and history museums. Although it has persuaded some movie studios to release Imax versions of their regular films, Imax has recently suffered loses associated with regulatory inquiries into its accounting methods.
In restated filings last month, Imax reported a loss of $16.8 million on revenue of $129.5 million for 2006. Also in 2006, an effort to sell the company faltered when no buyers offered the price Imax was seeking.
The deal with AMC, which is expected to add up to $35 million a year in additional cash, will go a long way toward stabilizing the company, said Bradley J. Wechsler, the co-chief executive of Imax. “This is transformational for us from a strategic point of view,” he said. AMC and Imax said they will divide the revenue from the theaters according to a pre-existing formula that they declined to describe.
Imax’s digital projection systems are new. Until now, Imax has relied upon equipment that translated film into 3-D projections and was so costly and clunky that it squelched demand.
Studios greeted the deal with enthusiasm. “This gives Imax a national footprint they never had before, including in the suburbs, and is great for studios looking to distribute titles in 3-D,” said Dan Fellman, president of theatrical distribution at Warner Brothers."
By Brooks Barnes, The New York Times
