Want to Watch Imax at Home? That’ll Be $400,000
When Greg Foster is having a bad day, he retreats to a room deep in the bowels of Imax Corp.’s Los Angeles offices. There, the executive who heads Imax's entertainment division, can reconnect with what makes him love his job: watching movies.
In a large, nondescript building in an industrial area known as Silicon Beach, Imax has built a screening room with all the aspects that a viewer would want from a big screen experience. The 60-foot-wide, 45-foot-high, curved screen tilts to an auditorium of 95 stadium-style seats. The one in the center has accommodated the biggest directors in the world, such as Star Wars: The Force Awakens's JJ Abrams.
If you have forked out the ticket price of about $20, nearly double the U.S. average, to see a film on an Imax screen, you know what the fuss is about: Bright, high-resolution images, all-encompassing sound, and a curved screen help immerse the viewer. Now the Canadian operator is bringing that experience into the home for you to enjoy with about 18 of your closest friends—provided you have more than $5 million to spare.
Blockbusters on Demand
'“It is the perfect marriage of a lot of trends we are seeing in entertainment consumption and our technology,” said Robert Lister, Imax’s chief business development officer, in an interview. “People are demanding content, when they want it, where they want it, how they want it.”
In particular, Imax Private Theatre is being targeted to the growing number of high-net-worth individuals (who have assets north of that $5 million mark) in places such as China and the Middle East. 1 In China, the number of high net worth individuals has doubled since 2010, according to a 2015 survey. There, not only will viewers get the highest-quality cinematic experience available (Interstellar director Christopher Nolan would be happy), but they will also be able to watch new releases just as they open in theaters—a radical development by Hollywood standards. Imax home theaters in China and Middle East will have $10,000 secure set-top boxes to deliver new movies, called Imax Home Premier, which uses fingerprint security technology, with additional fees for each rental; Lister said the company is considering selling this service separately from its physical home theaters overseas.
New expansion in the U.S. and Europe, though, is just for the theater design and build-out. (Exhibitors aren't budging on their fiercely protected, months-long exclusivity windows; popcorn doesn't sell itself, after all.) Some at-home-theater owners in the U.S. have been using Prima Cinema to get the new movies of some Hollywood studios, at the cost of $35,000 a year for a set-top box and $500 per screening. Napster creator Sean Parker hit a wall recently with his own "day and date" service attempt after top filmmakers and exhibitor groups came out against Screening Room, which purported to offer new movies via a cheaper, $150 set-top box for about $50 a movie.
However the movies are piped in, David Keighley, chief quality officer and a near 30-year veteran of Imax, maintains a watchful eye on the company’s at-home theaters to assure that the same exacting, high-quality features that any movie fan would find in a major theater are shrunk appropriately to fit a family home. At more than 10-feet tall, these home systems require rooms that can be devoted to the installation or built to accommodate one. A majority of sales so far have been for newly built homes and targeted to developers; the company has indicated that the roll-out has faced some headwinds from slowdowns in construction and real estate.
The basic system is the "Palais" setup, for theaters up to 75 square meters, at a cost of $400,000—a price on par with a new Bentley in China. The set-top box and film rentals cost extra. An even bigger “Platinum” system accommodates up to 40 guests and costs about $1 million. Sales of both systems are expanding into North America and Europe, according to Imax. Plans for a smaller version called “Prestige,” about half the size and price of “Palais” are also in the works.
The service is catering to a growing class that is not only rich but would not—or cannot—go to a local theater.
“It’s not just about uber-opulence, its also about privacy,” said Lucie Greene, worldwide director of JWT’s Innovations group. “Visibility in public spaces, and in the digital space, and public knowledge of their whereabouts is increasingly something [ultra-high-net-worth individuals] are mindful of and spending money to step away from.” The service caters not only to movie fans but also allows for gaming and karaoke as well.
The initiative is a potential source of growth for the exhibitor—which is hardly found in the U.S., where the movie market is stagnating and few new theaters are being built. China is where the growth is. A love for Hollywood movies is supporting an unparalleled boom in the number of screens, with an average of 22 built every day last year. China’s box office is set to overtake that of the U.S. in the next few years.
The project is a joint venture with TCL Corp., which provides some of the hardware and software for the system. After launching a showroom in Shanghai in June 2015, the companies announced 130 screens had been sold as of April this year. More showrooms will be opened in China, Dubai, and North America by the end of this year, a spokesman for Imax said.
From Wall Street’s perspective, it’s is a low risk strategy and doesn’t cannibalize its main business. Some analysts were impressed with the early take up in China, with plans to roll out in the Middle East this year, could provide a small boost to earnings in 2017, according to Eric Wold, analyst at B. Riley & Co. The move “represents another opportunity to leverage the Imax technology and brand with minimal cost or risk for Imax,” he said.
Sun Minhui, general manager of Diamond Beach Resort in Hainan, China, with its waterfront villas, is an example of the kind of buyer Lister is focused on.
Sitting with his view of the South China Sea, Sun, speaking by telephone, said the resort is similar to Miami or Hawaii, where people go to vacation during the winter. For him and his clients, home cinema can be an important part in their social lives. For some, they want to see the best way to watch a movie, for others its a reason to invite friends to their home or business associates, he said.
“In China, the value of cinema is more than just watching movies,” Sun said in an interview and the ability to watch new movies at home is a “big change.”
“If next week there is a new movie coming out, I can invite many friends to my home,” Sun said. “You build your own small platform for your social life. ”