Casting a spell over muggles everywhere, Time Warner's (NYSE:TWX) Harry Potter and the Goblet of Fire proved to be a hit on both the big screen and the biggest screen. This week, IMAX (NASDAQ:IMAX) announced that the fourth installment of what will eventually be a seven-film series generated $16 million in worldwide ticket sales at the 89 supersized moviehouses that were screening the IMAX-remastered flick.
Only ThePolar Express has been better to IMAX, grossing nearly $56 million over the past two holiday seasons. Still, the seasonal staple is an immersive 3-D experience. The latest Potter film is now the best-performing traditional 2-D movie, topping the $15.9 million in ticket sales this past summer for Batman Begins.
IMAX and Time Warner have worked well together. Time Warner has had a knack for releasing blockbusters, and IMAX has had an even more impressive streak of picking winners from Time Warner's arsenal to remaster and release through its growing network of IMAX-licensed exhibitors.
IMAX doesn't make the investment to convert conventional films into its high-end format unless it feels it's got a hit on its hands. So far, so great. Of the seven movies that broke $200 million in ticket sales last year, IMAX was there to port over the three from Time Warner.
Last year, IMAX-equipped theaters saw a 35% spike in ticket sales for these digitally remastered releases. Sure, there was a 21% uptick in the number of IMAX screens out there, but it still pales when compared to multiplex operators, who suffered through another year of declining attendance.
That's important. Because most of the IMAX screens out there are sold and licensed to third-party operators, you may not see the box-office magic trickle down to the company's bottom line as much as lay the seeds to generate even more revenue from new theater system installations in the future.
It's why AMC is testing some IMAX installations in key markets. If the revenue-sharing deal bears fruit, it won't be long before other multiplex operators like Carmike (NASDAQ:CKEC) and Regal (NYSE:RGC) share ink with IMAX.
IMAX was recently recommended in the Motley Fool Rule Breakers growth stock newsletter service. Yes, the movie theater may seem like a fading relic in an era of plasma television sets and broadband video delivery, but that's even more ammo to make IMAX the last great hope in theatrical entertainment. It recreates an experience that will never be duplicated in the living room. And if all else fails, I hear that Hermione Grainger knows a magic spell or two to turn things around.
Time Warner is a Motley Fool Stock Advisor pick. IMAX is a Rule Breakers pick. For a 30-day free trial of each market-thumping newsletter, click here and here, respectively.
Longtime Fool contributor Rick Munarriz dropped out of wizardry school at a young age. He wasn't much for spellcasting. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
