Making the big screen even bigger is proving to be contagious. IMAX (Nasdaq: IMAX) announced a joint venture deal with Regal Cinemas (NYSE: RGC) yesterday, bringing its new digital projection systems into 31 Regal theaters in a partnership that finds both companies sharing the costs and profits of the endeavor.
IMAX's ability to transform an ordinary multiplex into a mammoth-sized, premium-priced moviegoing experience has been a hit with both studios and exhibitors. Movie makers love the incremental revenue stream. Theater owners love having a product that no home theater system can even begin to match.
The big catalyst is this year's rollout of IMAX's digital projection system, saving costly reel printing fees, solving inventory hang-ups, and giving everyone greater programming flexibility.
You don't need yesterday's Regal announcement to show you that IMAX is now celluloid royalty. Between a 35-screen international deal earlier this month and December's 100-screen deal with AMC, IMAX has inked the three biggest deals in its 40-year history in just the past few months.
There is also validation in these deals. Regal has been an IMAX partner since last year, and AMC came on board three years ago. It also bears noting that Time Warner (NYSE: TWX) remains a big fan of IMAX, with the Regal announcement pointing out how the first few screens will be open before November's release of the next Time Warner Harry Potter flick.
It's not just Potter working that IMAX magic. DreamWorks Animation (NYSE: DWA) has also agreed to give IMAX 3-D makeovers to many of its upcoming features.
I recommended IMAX to Rule Breakers subscribers two and a half years ago. I was too early. The price was too high. It's all coming together now. IMAX is saving the movie industry by reestablishing the allure of "a night at the movies."
Now that the stakes have been raised, it's up to rival operators like Cinemark (NYSE: CNK), Muvico, and Carmike (Nasdaq: CKEC) to enhance their existing relationships with IMAX.
You've got to love IMAX's position right now. There are countless ailing multiplexes waiting to be saved, and they are all starting to realize that IMAX is the company peddling the cure.
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