Imax chief bullish despite recession

http://news.yahoo.com/s/ap/20090131/ap_en_mo/davos_forum_imax/print

 

By BRADLEY S. KLAPPER, Associated Press Writer Bradley S. Klapper, Associated Press Writer

Sat Jan 31, 3:08 pm ET

 

DAVOS, Switzerland – The CEO of megascreen producer Imax Corp. said he was confident the movie business would remain "fairly recession-proof" and that his company would benefit this year from the release of the new "Star Trek" film and the latest "Harry Potter" epic.

 

Richard Gelfond said the Canadian company planned to release as many 10 films in Imax theaters in 2009 — up from seven last year.

 

They include the big-screen adaptation of Alan Moore's acclaimed graphic novel "The Watchmen," a tale about ex-superheros in an alternate America; "Avatar," James Cameron's first feature film since the Oscar-winning "Titanic"; and "Lost" creator J.J. Abrams' much anticipated reboot of the legendary Star Trek franchise focusing on the exploits of Captain James T. Kirk and Mr. Spock.

 

"It's an unbelievable year for us," Gelfond said in an interview with The Associated Press Friday on the sidelines of the World Economic Forum.

 

Gelfond didn't see the crisis eating into profits, which he said were still benefiting from Imax's shift five years ago from film to a digital medium, cutting costs significantly. It still costs between $1 million and $1.5 million to convert a 35 mm film into Imax format, but Gelfond said good films easily recover that.

 

The Imax version of the "The Dark Knight," the format's most successful film ever, raked in about $60 million last year on only 1 percent of screens it played on, he said. Imax takes in about 12.5 percent of profits from its screenings.

 

"The movie industry is generally fairly recession-proof," Gelfond said. "People see the movies as a simple pleasure. You may not be able to go on vacation. You may not be able to eat in a four-star restaurant. But you can go to the movies and get relatively inexpensive escapism."

 

An Imax screen is like high-definition for a movie theater. They can be anywhere from 40-feet high such as on 42nd street in New York — which Gelfond said was the highest grossing theater in America — to eight-story tall screens in London, Sydney and elsewhere in New York.

 

As many as 700 people can fit in a single cinema, making margins bigger than for normal movie halls.

 

"It's a premium experience at a premium price," he said. "But it's a simple premium. It's only about $3 more."

 

Of course, for films like last year's "Speed Racer," which Gelfond said flopped in Imax as it did on normal screens, profits may still prove elusive.

 

But he said the demand for theaters and Imax showings was continuing to grow.

 

There are currently about 175 commercial Imax theaters in the world, Gelfond said. A backlog of 250 exists — 150 in the United States and 100 abroad — which the company hopes to build by late 2010 or early 2011 despite threats, he said.

 

He identified China and Russia as important growth markets, and said contracts are by and large being honored.

 

"Most of the contracts we get paid 90 percent of the money before we ship. So there's not a great incentive to walk away," he said. "On the other hand, particular internationally, some of the new projects are based on new construction. So we're monitoring that."