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IMAX Powers Tron: Legacy

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IMAX (Nasdaq: IMAX  ) hasn't lost its touch, and that touch might be turning to gold based on weekend results of Disney's (NYSE: DIS  ) Tron: Legacy.

A normal IMAX movie accounts for somewhere around 8%-12% of the total box office opening weekend, but IMAX accounted for 24% of Tron: Legacy's opening weekend domestically. And internationally IMAX generated $2.2 million, nearly 10% of the $23 million total box office. To give that a little perspective, the opening for Tron:Legacy was even bigger than the opening for Avatar at the same time last year.

Normally IMAX is helped by big box office hits like Harry Potter in "a tide that lifts all boats" kind of way. But smaller movies like Tron demonstrate whether moviegoers are tiring of paying extra for IMAX. Theaters aren't as full and other options are available, so it's a great opportunity to see how much value IMAX really offers.

Based on last weekend, it appears people are not only still willing to pay extra but prefer IMAX to any other offering. Tron: Legacy was also released in RealD (NYSE: RLD  ) theaters, but RealD couldn't hold a candle to IMAX's dominance. RealD is trying to keep up but with a superior revenue model, better brand, and increasing customer loyalty, IMAX is far and away the winner of this theater battle.

And more theaters are on the way with 201 new signings for IMAX in 2010. The added theaters will keep revenue growing and expand IMAX's footprint internationally.

Next up at IMAX theaters are The Green Hornet, Mars Needs Moms, and Sucker Punch. I'll continue to watch IMAX closely for signs of slippage, but if this kind of momentum continues, the sky is the limit for shares of IMAX.

Interested in reading more about IMAX? Click here to add it to My Watchlist, and My Watchlist will find all of our Foolish analysis on this stock.

At the movies with the Fool:

Fool contributor Travis Hoium owns shares of IMAX. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Walt Disney is a Motley Fool Inside Value recommendation. IMAX is a Motley Fool Rule Breakers selection. Walt Disney is a Motley Fool Stock Advisor pick. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (4)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 21, 2010, at 5:47 PM, gudsoox wrote:

    According to BOM, 3D accounted for 83 percent of the gross, with IMAX taking 23 percent.

    Of the remaining 60 percent, the majority should be RealD, followed by Dolby, XpanD, and MI.

  • Report this Comment On December 22, 2010, at 11:01 AM, TMFFlushDraw wrote:

    Right but IMAX is taking far more revenue than RealD from Tron. Check out the article I wrote last month about this below. Last quarter IMAX had revenue of nearly $60k per theater and RealD was less than $3k per theater.

    IMAX will never have a majority of the box office but it will collect a majority of the value compared to other theater formats.

    Travis Hoium

  • Report this Comment On December 25, 2010, at 12:30 AM, NinjaJew wrote:

    Very intuitive. I agree with this assessment.

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