IMAX Is Reinventing Itself SWOT Analysis Case Study

Case study: IMAXIMAX Is Reinventing Itself to Boldly Go Beyond Movies
To combat the decline of theatergoing, the large-format cinema company will show events like
concerts, stand-up comedy and e-sports tournaments.
As Kanye West thundered through ”Black Skinhead” at the Los Angeles Coliseum in December as
part of a benefit concert, young fans in the front row threw their bodies around in wild abandon.
Others pumped their fists in the air and shouted along to the lyrics: ”Pardon, I’m getting my scream
on!”
Except these fans were nowhere near the Coliseum. They were inside a suburban movie theater.
IMAX, the large-format cinema company, had teamed up with Mr. West to expand the concert’s live
footprint by beaming his performance in real time to 35 IMAX theaters, adding more than 10,000
seats. Although the first-of-its-kind event was also available to stream live on Amazon Prime Video,
IMAX sold out its shows.
”It’s hard to beat a six-story Kanye standing in front of you,” Richard L. Gelfond, IMAX’s chief
executive, said in a phone interview.
Mr. Gelfond needs a lot of ticket buyers to agree with him — and not just for events involving Mr.
West, who did another live collaboration with IMAX on Tuesday night, this time in 60 theaters, with a
near-sellout crowd of almost 18,000 and tickets costing $20 to $30. In the coming months, IMAX
intends to expand its menu to include stand-up comedy and e-sports tournaments. A company
spokesman said negotiations were underway with several pop stars for concerts. H.E.R., the R&B
sensation, has already agreed to collaborate with IMAX on a project. (One challenge: artist
punctuality. Mr. West started his Tuesday performance more than two hours late.)
Other events will revolve around exclusive film screenings, with stars and filmmakers participating in
live question-and-answer sessions. Frances McDormand and the director Joel Coen did one tied to
”The Tragedy of Macbeth,” a film that was primarily distributed on Apple TV+. Peter Jackson fielded
questions after an IMAX-only release of his Disney+ documentary, ”The Beatles: Get Back.” Both
streaming services were looking for ways to ”eventize” the content — to focus attention on ”Macbeth”
and ”Get Back” so they didn’t get lost in the torrent of streaming-service offerings.
Credit: Loren Wohl for IMAX
A discussion featuring the actor Frances McDormand and the filmmaker Joel Coen was shown at 17
IMAX theaters after a screening of “The Tragedy of Macbeth” in December.
In December, Gwen Stefani hosted an IMAX fan event live from her house, where she screened her
favorite holiday film (”Elf,” which had never been shown in the IMAX format) and promoted her
Christmas album. Steven Spielberg and members of his ”West Side Story” cast also participated in
an IMAX event.
”If you don’t keep reinventing yourself, you’re not going to move your business forward,” Mr. Gelfond
said. ”So we’ve been working for the last few years on events, what we informally call IMAX 3.0. The
world is changing, and the movie industry is changing.”
Mr. Gelfond was referring to the ascendance of streaming services and the decline of traditional
moviegoing. Both trends have been percolating for years, but they intensified during the pandemic,
when many theaters were closed. Studios are now diverting most of their dramas, musicals,
comedies and modestly budgeted action movies to affiliated streaming services. Leviathan fantasy
franchises and sequels will continue to flow to theaters. But how will theater operators fill the gaps in
their schedules?
Megan Colligan, the president of IMAX Entertainment, noted that live events ”often bring in
audiences that haven’t been to an IMAX theater and, in many cases, have not been to a movie
theater at all in a very long time, sometimes ever.”
Ms. Colligan emphasized that IMAX events were not just about throwing content onto a really big
screen, but would specifically make use of the company’s premium-format technology. Mr. West and
his team, for instance, used 16 extra-high-resolution IMAX cameras to capture the December benefit
performance (out of 20 cameras in total).
”There was a lot of smoke and mist, and making sure we were capturing that correctly was
something that was really important to them,” Ms. Colligan said. She added that the Oscarnominated cinematographer Larry Sher was the project’s director of photography.
The IMAX theater network has 1,700 locations in 85 countries. About 70 locations have been
upgraded with instant-simulcast technology, which equates to about 25,000 seats, roughly the
capacity of Madison Square Garden. ”Our goal over the next year will be to connect our theaters
globally,” Ms. Colligan said.
With its strength among younger consumers, known as fanboys, and focus on visual spectacles like
”Spider-Man: No Way Home,” IMAX has a healthier core business than many cinema companies.
Steven Cahall, a media analyst at Wells Fargo, recently named IMAX his favorite mid-cap growth
stock for 2022, saying in a research report that the company ”is the best way to play premium
theater experiences + studios’ renewed focus on theatrical tent poles.”
On Wednesday, IMAX reported its strongest quarterly results since 2019. For the three months that
ended on Dec. 31, revenue totaled $108.6 million, a 94 percent increase from a year earlier. The
company also reported a net income of $10.1 million, compared with a loss of $21.2 million a year
earlier. For the full year, IMAX captured about 3 percent of the worldwide box office, the company’s
highest share ever.
Upcoming films shot with IMAX cameras include ”Top Gun: Maverick,” ”Black Panther: Wakanda
Forever” and Jordan Peele’s ”Nope.”
But IMAX has long wanted to diversify beyond large-format movie capturing and projection
technology, in part because ”exhibition,” as the traditional movie theater business is known, is not an
appealing business for most investors. (Total annual ticket sales in North America have been slowly
declining for two decades.) ”We are not an exhibitor,” Mr. Gelfond said bluntly in the company’s
earnings news release.
The company’s diversification track record is mixed. A recent effort to tap into the streaming
business has been going well; in November, IMAX teamed up with Disney+ to enhance most Marvel
movies, and Mr. Gelfond said talks were underway with other streaming services for similar
partnerships. In contrast, a 2016 attempt to build virtual-reality-based entertainment centers
(envision the arcades of yore, except with V.R. goggles) was unsuccessful.
Mr. Gelfond, however, was able to reposition IMAX once before. The company, which he and a
partner bought in 1994, started out as a museum curiosity — a maker of high-end nature and science
documentaries. (Mr. Gelfond sums up this era of the company as ”whales, bears and seals.”) IMAX
2.0 involved changing the brand’s focus to blockbuster movies like Christopher Nolan’s ”Dark Knight”
trilogy.
”And now,” Mr. Gelfond said, ”it’s time for another pivot.”
(Source: Barnes, 2022)