3D TV an Opportunity, Not Threat, Says Imax CEO
The advent of 3D television does not threaten the future of big-screen Imax movies in the theater, but it does present an opportunity, the chief executive of Imax Corp said on Thursday.
"We provide a unique, high-end, out-of-home entertainment experience that people will want to see, even if it's available in the home," said CEO Richard Gelfond in an interview with Reuters.
"I don't really think 3D in the home is going to negatively impact us. On the other hand, we entered into a letter of intent with Sony and Discovery to create the first 3D in home cable TV network."
Discovery Communications, whose TV brands include Discovery Channel, TLC and Animal Planet, said in January that it plans to launch a dedicated network with Imax and Sony in the United States beginning in 2011.
Toronto-based Imax, which reported better than expected quarterly results on Thursday and forecast a strong year ahead, said it is still negotiating a final agreement with Sony and Discovery and could issue an update in a month.
"Since we have the premium brand in 3D and have been in 3D longer than anybody and have some proprietary technology, we're looking for other ways to migrate into the home and think we'll be able to find a revenue base in the home," he said.
While its ideas are "just theoretical" at this stage, Imax is considering a range of licensing options to capitalize on its 3D content library, for example, or conversion technology for 2D to 3D material, he said.
"I think we'll actually license our name for select consumer experiences. For me, one of the most logical -- I'm just using this by way of an example -- would be a 3D camcorder, the Imax 3D camcorder," he said. "We expect to announce the first of them in the next several weeks. But beyond that, I don't really want to comment right now."
Brigantine Advisors analyst Steven Frankel said Imax could follow the example of Lucasfilm offshoot, privately held THX, which has licensed its name and know-how for high-end consumer home electronics. Imax will need to tread carefully as it expands away from its core business of giant-screen movie theaters, as it also faces risk from the unpredictable health of Hollywood's box office and consumer interest in 3D, he said. Frankel said Imax, which has undergone a major overhaul during the last two years, has some advantages.
"Imax today is the beneficiary of three transitions -- from analog to digital, from the museum to the mall and from a balance sheet, which has been significantly de-leveraged," he wrote in a recent note. "Along the way, the driver of the business has moved from the sale of equipment to mainstream box office fare."
Earlier on Thursday, Imax said its first quarter was poised for big gains over last year, based on quarter-to-date film revenue of about $187 million versus about $30 million at the same time last year. Blockbuster 3D films such as Avatar and Alice in Wonderland have drawn big crowds and improved the company's outlook.
"I think we have a really strong film slate this year and I think even without Avatar it measures up favorably to last year's slate," Gelfond said. "The movie business is very difficult to predict title by title, but when I look at it as a whole I feel very good about our slate this year."
By Susan Taylor, Thomson Reuters
