Reinventing Entertainment: 5 Questions with IMAX CEO Rich Gelfond

FacebookTwitterLinkedIn

IMAX is changing even faster than Hollywood. The brand once known for its science museum documentaries in Canada featuring eye-popping visuals and ear-shattering explosions is now pushing the movie technology envelope and taking on a broader identity as it becomes a truly global brand.

It’s introducing laser-based technology to enhance the way movies are shown, developing a home version of the IMAX experience and rapidly expanding in China, where movie-going has long been an important social and cultural event.

Rich Gelfond, IMAX’s CEO for two decades, has led the company and brand through its technological and geographic evolution. brandchannel talked with Gelfond about how he’s reshaping IMAX and what’s ahead for the giant screen innovator, its global growth and the future of movies.[more]

brandchannel: How did you build the IMAX brand?

Rich Gelfond: Our legacy and birthplace was in museums, science centers and institutions, and the experience itself was so powerful that it became the backbone of building the brand. We spent very little on marketing and almost nothing on advertising until the past couple of years.

After my business partner Brad Wechsler [now Chairman of the Board] and I arrived, we did simple things like create logos and taglines, and formed a marketing department that set brand guidelines for theaters in North America, in particular. We hired a communications department. We didn’t do any advertising. We did space movies with The Smithsonian and NASA, and did a lot of brand promotion around those initiatives.

Then fast-forward to 10 years ago when we hired our first CMO. We definitely stepped up our efforts, but they were still mostly promotion with no paid media. Then two years ago, our current CMO, Eileen Campbell from WPP’s Millward Brown, joined us. She combined all of our marketing departments into one group and made them more functional. Now, we’re much more focused on a cohesive brand strategy that includes paid advertising, PR and social media, with a broader global reach.

bc: Are you still more of an “Intel Inside” ingredient type of brand, in the background of the movie industry?

Gelfond: Entertainment technology is where we want to be. We are using our tagline—“Never Compromise”—more frequently, which speaks to our relentless commitment to quality and providing unique, immersive experiences. And we deliberately haven’t limited it to the out-of-home cinema space.

We have made small forays elsewhere. For instance, we have in-home IMAX entertainment systems—one costs $2.5 million, and another manufactured in China (a 4K platform developed in partership with TCL) is about $300,000. The idea is to bring the same kind of immersive experience to the home.

bc: How do you stay current with changes in filmmaking and adapt them to IMAX?

Gelfond: We’ve actually been a leader. We were the first to introduce stadium seating. We entered the 3D business over 20 years ago, and one thing that led to its resurgence was 2004’s “Polar Express,” in IMAX 3D. The results were overwhelmingly positive at the box office and, along with films such as “Avatar,” really helped lead to the modern era of 3D.

One print of an IMAX 70mm film could range from $20,000 to $40,000, which was a huge impediment to our expansion. We spent more than a decade creating a digital system because we knew it was the only way to penetrate the mainstream. It now costs $150 (to digitally remaster the image and sound quality of) one film, and it’s loaded into the hard drive.

We also just introduced a prototype laser system. Projectors have traditionally been based on xenon electric lightbulbs. But we developed a system that leverages a laser light source and cost $60 million, and acquired patents from Kodak.

We then spent three years in three different countries developing the system, which has around 6,000 parts. It presents phenomenal images, greater brightness, blacker blacks, whiter whites and more vivid colors on our largest screens.

bc: How important has growth in China been, which is now your second biggest market after the US? 

Gelfond: In the late ’90s, we identified China as a potentially big market for us. We were developing most of our content then, and China was politically neutral. We thought the educational value of IMAX documentaries would be appreciated there.

And the timing was lucky for us: In 2002, China went on a multiplex-building binge, resulting in 2,000 screens. Now there are 20,000 (multiplex cinemas there) and China will probably pass the US around 2020.

In 2009, we had about 13 commercial theaters in China and another 220 in the backlog (to be constructed). When “Avatar” was released that year, the market went crazy. We did about $24 million on those 13 screens.

After that, there was tremendous demand for theater growth in China. One of our original partners, Wanda, expanded exponentially and now is the largest exhibitor in China. Today IMAX has more than 200 theaters open in China, with another 230 or so planned over the next five years.

bc: What would you say is Hollywood’s biggest challenge these days?

Gelfond: If you’re talking about 2014 results, there were just movies that didn’t work. I feel kind of strongly that in 2015, there are a lot of movies that will work. This year’s “American Sniper” was certainly the best January release ever.

As you go into 2015 and you have “Furious 7,” (watch its IMAX trailer below) “The Avengers” sequel, “Jurassic World,” a new Bond movie (“SPECTRE”), “Star Wars: The Force Awakens,” “Tomorrowland” and the final “Hunger Games,” I think it will be a real breakout year.

I’m one of those guys who don’t believe one year constitutes a trend. I also think movie-going becomes a type of habit. If you don’t go to movies, you don’t see trailers, then you don’t go to the next movies. When you do go, you tend to keep going.

 

FacebookTwitterLinkedIn