The lead protagonist in Disney's
If you're IMAX
300 reasons to worry
IMAX has carved out a cozy living by remastering upcoming Hollywood flicks, and then splashing them across its bigger-than-life eight-story screens. Consumers are willing to pay a premium for the experience, and the early weekends often sell out of the more popular flicks.
Take the recent success of Time Warner's
The crowds kept coming. A weekend later, IMAX was accounting for a worldwide $9.1 million of the cumulative $154.2 million that 300 had generated. You're sitting pretty if you're producing 6% of the ticket sales on just 2% of the screens.
Yes, IMAX setups are a little larger. The company's MPX system, being tested by theater chains, takes up the space of two retrofitted screens. The transformation process doesn't come cheap, but the 300 math still works in its favor. Triple the ticket sales for double the space? An event-driven crowd that will be quicker to pay up for pricey concessions to make the most of the experience? That adds up for me.
However, let's check back in on our good friend Lewis. The $7.1 million in ticket sales generated by the digital 3-D version breaks down to just $12,220 per screen, but that's still 2.6 times more than the film drew from the traditional screens.
Disney has now given Chicken Little and Meet the Robinsons the digital 3-D treatment with welcome results. Can you imagine how sweet it will be with a bigger Pixar flick? Meet the Robinsons in 3-D accounted for 28% of the film's opening-weekend gross, in just 17% of the theaters. Disney isn't going to shy away, especially since movie chains are making the digital migration anyway.
The joys of going digital
Digital projections aren't cheap. A conversion can run as much as $100,000 per screen. However, the savings add up in a hurry. It can cost as much as $1,000 to print and ship out film reels to a single theater. Going digital ends that expense.
There's also the convenience of never having to replace or repair the reels. If a sleeper hit becomes a blockbuster, it also doesn't take days to start screening a second copy.
Thomson's Technicolor Digital Cinema subsidiary, as well as the pairing of AccessIT
IMAX is also talking about replacing its platform with digital projectors, but the company will probably need a sugar daddy to bankroll the migration process.
This doesn't mean that IMAX is losing a step here. Sony
As long as the 3-D format sticks to animated fare, IMAX should be just fine. Some of its biggest cinematic disappointments have come from giving films like Open Season and Ant Bully the IMAX makeover. However, it can't ignore that conventional theaters now see the potential for enhanced returns without necessarily having to hook up with IMAX.
According to the trailer, the T. Rex has a hard time seizing Lewis because he has a big head and little arms. Let's hope that IMAX knows how to seize the opportunity with a big head and bigger arms.
IMAX was recommended two summers ago to Motley Fool Rule Breakers newsletter subscribers. No, it hasn't gone well and you can read the original recommendation and have access to all of the growth stock picks with a free trial subscription. Thankfully, the average pick has beaten the market. Time Warner, Disney, and Dolby are all Motley Fool Stock Advisor picks.
Longtime Fool contributor Rick Munarriz loves to spot great things early. It's why he's been with The Motley Fool since 1995. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does own shares in Disney. The Fool has a disclosure policy.