Imax's Ssimwave Buy a Funnel for Streaming Market Revenue, Says CEO
Imax’s box office receipts continue to reflect consumers’ return to experiences after a COVID-19 drop in theater attendance, with Q3 Imax gross box office rising 25% year on year to $177.1 million, the company reported Monday. Imax revenue grew 21% to $68.8 million from $56.6 million in the year-ago period.
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Commenting in Q&A on whether Imax is concerned about the impact of inflation on consumers’ discretionary spending, CEO Rich Gelfond called Imax an “affordable luxury.” Consumers might cancel a vacation or restaurant when they need to cut expenses, but those are “getaway experiences,” he said.
Gelfond referenced the 2008-2009 recession, saying ’08 was one of the best years in company history. Though in-home entertainment trends have changed, with far more viewing options via streaming, Gelfond said Imax still picked up market share early this year with Top Gun: Maverick, Jurassic World Dominion and Doctor Strange in the Multiverse of Madness. He doesn’t think inflation-related cutbacks will be “an issue" for movie-going.
The CEO expanded on Imax’s September purchase of streaming technology firm Ssimwave (see 2209230006) for $18.5 million in cash and $2.5 million in stock. “We've always been looking around for ways to expand the kinds of technology we could do,” Gelfond said, saying Imax doesn’t own the theaters that license its technology. Ssimwave’s revenue has grown at a 25% compound annual growth rate for a number of years, he said, and it’s just in the U.S. and Canada now, so “we think we could do a lot there.”
Disney “decided to bet on a streaming service,” Gelfond said: “We bet on the growth of streaming revenues because that’s how we get paid.” Ssimwave technology can help Imax “solve much bigger problems in the entertainment industry,” he said, by helping streaming services “save a lot of money” through analyzing content and devices: “We think there are products we can develop that we haven't talked about at all that could potentially be game-changing."
With the Ssimwave buy, Imax is opening a “new world of possibilities” for its image enhancement capabilities, extending beyond streaming and theatrical to gaming, live sports, VR, AR and the metaverse, Gelfond said. Ssimwave is currently “testing and learning across several of these areas," he said.
In the quarter, Imax had its highest grossing events in its live content fan events, Live Music and Studio Interactive. Brandi Carlile: In the Canyon Hays -- Live had a $450,000 box office from one Wednesday evening showing in about 100 Imax locations in North America, Gelfond said. Harry Styles' Don’t Worry Darling was Imax’s fastest selling live event to date, with 40 sellouts, including 21 in the first 24 hours, he said.