Homegrown programming would to plug gaps in the calendar when Hollywood isn’t producing blockbusters, entertainment CEO Greg Foster says
Giant-screen specialist IMAX Corp. is joining the content creation party, and will be generating its own movies and other programming in the near future, the company’s entertainment chief executive officer Greg Foster said Wednesday.
Talks with potential partners and TV producers and filmmakers are under way, and IMAX will be taking its next steps in the coming months, Foster said Wednesday at the 2015 Media, Communications and Entertainment Conference sponsored by Bank of America and Merrill Lynch in Los Angeles.
IMAX has had a terrific year so far, and its stock and revenues have surged thanks to a strong domestic and global box office, led by giant-screen-friendly hits like “Avengers: Age of Ultron,” “Jurassic World” and “Mad Max: Fury Road.”
But the company has troubles in times of year when blockbusters are scarce, Foster said. “There were no blockbuster movies released in August, there were none last week and none this coming weekend,” he said. “That’s three or four weeks of beachfront property.”
And with net income up by 83 percent from a year ago, to $24.35 million, IMAX is positioned to aggressively seek alternatives.
“We want to provide the very best premium entertainment 52 weeks a year, and if creating it ourselves is the best way to do it, we’re going to be excited about taking that step,” he said.
With the digital explosion creating countless new streaming platforms, there has been a rush to fill the content void by media firms and companies better known in other sectors, like online retailer Amazon.com and Marriott Hotels.
IMAX is considering three primary content strategies, or some combination of them, Foster said. The simplest would be creating its own programs or movies, from the development process to filming and distribution, he said.
“But that basically turns you into a mini-studio, and that’s the highest risk,” Foster said.
Partnerships are another alternative. IMAX has worked hand-in-hand with several directors, including director Christopher Nolan on his space epic “Interstellar.”
“We have had so many talks with filmmakers that have projects that they haven’t been able to get made for one reason or another,” he said, and noted that IMAX prided itself on collaboration. “We don’t just take a hard drive, pop it into the projector and press play. We actually work with the filmmakers throughout the process, and that makes a difference,” Foster said.
“We are represented by CAA and we have already established a number of really important relationships that, with their help, we can build on,” Foster said. “We can cherry-pick our projects this way, too,” Foster said.
The third approach would be to license “windows” or periods of screening time in IMAX theaters for programming that could then move onto, or be licensed for, other platforms such as VOD or broadcast, he said.
IMAX has experimented with alternative programming in recent months to fill slow periods. It screened episodes of HBO TV’s “Game of Thrones” last year to sellout crowds and is talking with AMC about giving “The Walking Dead” the giant-screen treatment in the future.
While the year overall has been a strong one, IMAX shares have fallen 26 percent over the last three months, mostly due to concerns over the Chinese economy, where the company is heavily invested. The brokerage firm MKM Partners to lower IMAX’s price target from $50 to $40 Wednesday.
“We believe IMAX is not being given any valuation premium for its China business despite clear evidence that the country’s exhibition market remains robust and has strengthened this year,” MKM said in a note.
Shares of IMAX were up 1.33 percent to $32.02 on Wednesday.