The Chinese unit of Imax Corp., the world’s largest jumbo-screen cinema platform, is expanding its partnership with the country’s biggest film exhibitor to add 10 more of the systems in a bet that post-pandemic demand will favor premium formats.
In partnership with Wanda Film Holding Co., the Imax affiliate will also upgrade to laser technology at 10 cinemas in big cities including Beijing and Shanghai, the companies said in an emailed statement Thursday. The operation of some theaters will be converted to a recurring revenue-sharing model and pandemic safety steps will be taken, Imax China Holding Inc. Chairman Richard Gelfond said.
The cinema chain and partner Imax are counting on business to bounce back in China, where renewed outbreaks have delayed full nationwide reopenings. Wanda Film, part of the Dalian Wanda Group Co. empire led by billionaire Wang Jianlin, this week reported a first-half loss of as much as 1.6 billion yuan ($229 million) on a preliminary basis amid theater closures and postponed film releases.
Theaters in areas with low pandemic risk can gradually resume operations from July 20, the China Film Administration said Thursday. At reopening cinemas, the number of movies arranged for each day should be halved from normal levels and attendance should not exceed 30%, while screens in medium- and high-risk areas will remain closed, the administration said.
“It’s nice that we finally have certainty from the Chinese government,” Gelfond said in a Bloomberg TV interview. The first week or two will be kind of a dress rehearsal to make sure everything is safe, he said.
Some theaters in China reopened earlier this year, only to shut again amid concern about renewed outbreaks.
The Wanda theaters being upgraded with the latest Imax gear are all in low-risk areas, Imax said in an email Thursday.
The company, which licenses its technology to theater operators, expects to be among the entertainment businesses that can operate safely amid the coronavirus pandemic.
“The cinema is safer than a lot of places — you wear a mask going in, it’s a passive experience, you’re not talking to the people next to you,” Gelfond said. “If you do things right, the cinema can be a very safe place.”
Imax China shares climbed by a record 16% Wednesday in Hong Kong after Goldman Sachs said the parent was well-positioned for a recovery and was less vulnerable to competition from streaming services. The China unit rose as much as 4.7% in early trading Friday. In New York, Imax shares jumped for a second day Thursday, bringing their two-day gain to 21%.
Gelfond, also chief executive officer of the parent, has said rising demand for local blockbusters in China favors the biggest screens. Imax has also benefited from a World Trade Organization memorandum in 2012 that expanded the annual target for films imported to China to 34 from 20. The 14 added slots are for premium format films in a country where the government controls which movies can be screened.
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