Beyond The streaming: IMAX responds to rise of Netflix

Beyond The streaming: IMAX responds to rise of Netflix

| In The Knockoff Economy, Professors Kal Raustiala and Chris Sprigman wrote about turning products into experiences as a way to blunt the detrimental effects of copies. Products – especially digital ones – are often easy to copy, but experiences are harder… |

Applying that to films, through streaming it’s now very easy to watch a film anywhere, anytime. But it’s difficult to create the experience of watching a film in a cinema: the comfortable reserved seats, the food and drink, the great sight lines and sound. Plus the unique feel as seeing a film as part of a shared experience.

All this, of course, comes at a price. But it helps justify the idea of going to a cinema in an age when home downloads, on a widescreen computer monitor, can be pretty good.

Premium Cinema

There are 150,000 digital cinema screens around the world. In 2006 there were fewer than 3,000.

Premium cinema experiences are also growing fast. The number of IMAX screens globally now stands at 1,060, with hundreds more in the pipeline for the next 12-18 months.

Such growth in high quality cinema could be seen as unprecedented in the entertainment industry. However the advent of streaming en masse has radically changed the game once again. Consumers can see more films in more places than ever before.

On demand in demand

Netflix is massive. Turning over $6.8 billion in 2015, the leading on demand provider has more than 81 million members in over 190 countries who enjoy more than 125 million hours of TV shows and movies per day. In the fourth quarter of 2015 alone the number of Netflix subscribers grew by 5.6 million.

Other internet giants such as Amazon and Now TV have joined the streaming revolution, which provides a cost effective way for consumers to enjoy their favourite shows and films in the comfort of their own home.

Cinema faced a similar challenge in the 1950 when TV’s arrived in US suburban homes. In its war against television, the film industry had three major campaigns involving technical advances with wide-screen experiences, colour, 3-D and even Smell-O-Vision.

How is IMAX responding to the rise of Netflix and in-home entertainment? By focusing on its’ core product (the Imax factor), extending its’ global footprint and using the support of filmmakers (filmaker force).

The IMAX factor

Andrew Cripps is President of International at IMAX says “IMAX provides people with an immersive experience. It feels like you’re part of the movie in a way that you don’t get at home or on various devices. When you go out to the movies you expect to see, hear and feel the best, most premium movie experience.

“Technology aside, comedies are funnier and thrillers are more enthralling when there are 400 other people laughing and holding their breath with you. I believe humans have a desire to be collectively entertained.”

Moreover, “consumers are paying a premium price for IMAX so it’s incredibly important that we deliver a premium experience,” Cripps added. “If you’re going to compete with in-home you must live up to your promises.”

For 50 years IMAX has been pioneering the big screen experience. In the last 12 months it has introduced laser projection and immersive sound to screens in London’s Leicester Square and Cineworld in Sheffield, UK.

Global footprint

The second way in which IMAX plans to compete with the growth of on demand streaming is to expand its own network of screens. Although China represents the most significant growth market (290 theatres already installed with a further 240 ready and waiting), Cripps is also targeting underexploited European countries. Cripps points to the emerging markets as driving the future of cinema. “When I joined the industry in 1985 around 25-30% of the box office on a movie would come from the international side,” he said. “That’s more like 70% now.

There are 195 IMAX screens in Europe, of which 155 are open and 40 signed in backlog and due to open in 12-18 months. Another five screens will go up in France and Switzerland as part of a new deal. Cripps explained: “We are targeting France and Germany in particular and looking to build on our success in the UK, where we have 42 IMAX screens open now.

“Russia is another excellent market for us with 50 theatres, although issues with the Rouble have thrown up a few challenges. Scandinavia is another promising region where IMAX has two terrific theatres – one in Copenhagen and one in Stockholm – so we will look to build on that.”

Filmmaker force

The film industry itself is also an enthusiastic backer of IMAX and the big screen.

Endorsements from directors and studios provide crucial publicity for cinema over on demand, encouraging film fans to enjoy the entire visual, audio and atmospheric experience their productions can provide on the big screen.

“IMAX has extremely good relationships with filmmakers who, ultimately, produce their movies to be watched by people at the theatre,” Cripps said. “JJ Abrams with Star Wars is a great example – he promoted IMAX and encouraged people to see it on our screens, going round the world and telling people IMAX is a great place to see Star Wars.”

IMAX at home?

Is it possible to combine the best of IMAX technology with the comfort of home entertainment? China and the Middle East are currently trialling the new IMAX home entertainment theatre system, aimed at very high net worth individuals.

However, IMAX’s major focus is on strengthening its core product, the theatre experience continuing to move towards premium experiences in the future, be that IMAX, VIP luxury seats, in-theatre dining alternatives or high quality bars.

Cripps says that “cinema and home entertainment can continue to co-exist positively, but only if cinema offers something you can’t get at home.” And he doesn’t mean Smell-O-Vision.

Source: Business Review Europe

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