What is IMAX doing in China, and what does it mean for the movie business? In short: IMAX is expanding its presence significantly in the country, aiming to capitalize on a major growth opportunity for motion picture production, distribution, and exhibition.
The US box office may have cooled in the last few years as more folks stay home and binge watch on their internet streaming platform of choice. It’s a different story in China, where consumers are flocking to the theaters and many are willing to spend extra for a premium experience. As we’ve noted before, China is expected to surpass the US and Canada as the world’s largest film market as soon as 2017. Incomes have climbed steadily as the Chinese middle class continues to grow, and audiences there are especially keen on watching Hollywood blockbusters in the theater.
Banking on the strength of this trend, IMAX has signed the biggest deal in the company’s history, to create 150 additional theaters in a partnership with China’s Wanda Cinema Line, the country’s largest theater chain. Variety has outlined the plans, which will involve a six-year-long construction project and give IMAX more than 740 theaters in China, about double the number it has in North America. The company is building the theaters through its 68%-owned IMAX China, an entity that debuted on the Hong Kong stock exchange in October 2015. China now generates a third of IMAX’s global box office.
Wanda, meanwhile, is beefing up its own movie holdings. The company already owns AMC Entertainment, the second-largest US theater chain. (It paid $2.6 billion for the company in 2012.) And earlier this year Wanda purchased US production firm Legendary Pictures for $3.5 billion, a transaction The Wall Street Journal called the largest deal by a Chinese company in American movie production. Reports have also surfaced that Wanda wants to acquire Paramount.
The IMAX-Wanda partnership has already shown success in China with the summer movie Warcraft, produced by Legendary Pictures. The film bombed in the US but broke records in that country, proving China means big business for the big-screen operator.
Amy Schein is an Industry Specialist at First Research, where she covers various aspects of the media industry. She earned her BS and MA in media studies at the University of Texas at Austin. Follow Amy on Twitter.