Imax has pulverized its company record for gross box office achieved by local, non-English-language films. In the year to date, its screens have enjoyed $165 million of gross revenue, compared to a previous high of $134 million achieved in the full 12 months of pre-pandemic year 2019.
The U.S.-listed company, which will unveil its third quarter earnings on Thursday, is expected to also announce that the current month is the highest grossing October in the company’s more than 50-year history.
Both elements point to an accelerating recovery for the global theater industry that is currently being driven by China, which has been the world’s biggest theatrical market through 2020 and 2021, and by other vernacular film industries, as much as by Hollywood.
“We are not only back, we’re roaring back,” Imax CEO Richard Gelfond told Variety, as he teased a further expansion of local-language films.
That tallies with an upwardly revised global box office forecast issued earlier this week by U.K. research firm Gower Street Analytics. The researcher pointed to an October that is within a whisker of pre-pandemic activity. (Its $2.5 billion forecast for global grosses is only 4% lower than mean October grosses between 2017 and 2019.)
There may be as many as 10 local-language titles delivered in Imax format over the next five months. They include this weekend’s “Sword Art Online Progressive” in Japan, and Huayi Brothers’ “Railway Heroes,” which is set for Nov. 19, 2021, in China. The February 2022 Lunar New Year holiday is expected to see multiple Chinese titles in Imax, headed by “Mozart From Space.”
There are now some 750 Imax theaters in commercial operation in China, making it the company’s largest market by screen count. That compares with 400 in the North American domestic market. By Imax gross revenue North America, China and the rest of the world are roughly equal at the moment.
“It was strategic for us to do local-language films, starting originally in China and Japan. We initially seized the opportunity to pivot as the box office and our reputation grew in China,” said Gelfond. “One of the really good things about China [from an Imax perspective] is that its high seasons are different from Hollywood’s. Chinese New Year in late January and February is the best time of year there, but a slow time for Hollywood films. So originally it was countercyclical play. But as we got bigger in China, and opened more screens, we noticed that in lower tier cities especially, people really sought out local language. The biggest [Hollywood films from Marvel or DC Comics] did great in the higher tier cities, but not the same in the lower tier cities. So, we made a strategic decision to step up our production in local language films.”
That play has worked especially well for the company in the pandemic era. In part that was because Chinese theaters were able to open up from mid-2020, when many other territories kept cinema doors closed.
Another element has been how Chinese filmmakers have increasingly begun to integrate what Gelfond calls Imax DNA, meaning the use of Imax aspect ratios and Imax-certified cameras at the production stage.
The past 14 months have seen Imax components used in three of the biggest Chinese films of all time. They are 2020’s “The Eight Hundred,” Lunar New Year 2021 smash “Detective Chinatown 3,” and the still-on-release war epic “The Battle at Lake Changjin,” where Imax theaters have taken $35.5 million from a $828 million total.
The strategy has had similar success in Japan, the world’s third-largest theatrical market, where box office from Japanese local titles has grown from $2.5 million in 2017 to $27.5 million so far in 2021.
In 2020 “Demon Slayer The Movie – Mugen Train” was a runaway hit for Imax ($25 million) and the year’s top-grossing film. The current year has brought “Shin Evangelion” ($9.2 million) and meant that 67% of Imax’s box office has flowed from Japanese titles. This performance recently earned the company a second five-picture deal with Toho, Japan’s leading vertically-integrated studio conglomerate.
Efforts to increase the volume of local films made or showing in Imax venues are being made in Asia’s next biggest markets South Korea and India, though Imax has smaller footprints there.
As the theatrical industry emerges from the pandemic, different sectors may be recovering at different speeds. Gelfond believes that the Imax brand of premium large format experience is bouncing back stronger.
“After being closed for a year, there are certainly challenges to the economics in some territories for some of the regular theaters. Commoditized theaters that are not that distinguishable from the in-home experience are losing a little popularity. But the premium end, particularly Imax, is increasing popularity,” said Gelfond.
The company’s local-language play is juicing that further. “We used to get around 2.5% of [a film’s] box office in China. Now it closer to 3.5% over the past year. Coming out of the pandemic, our market share for local-language film has grown significantly,” said Gelfond.