Visitors view 3D movie.Kevin Lee
The Avengers, the latest superhero movie from Walt Disney's Marvel unit, led the box office in the U.S. and China this weekend when the film opened to a rapturous reception, breaking records and earning an estimated $200-million in the U.S. alone.
The U.S. opening lifted the worldwide total for the film - called Avengers Assemble in the U.K. - to $642-million after only 12 days on release.
In common with other big-budget films projected to be box-office hits this year such as Prometheus, The Dark Knight Rises and The Hobbit, a significant proportion of The Avengers revenue will come from Imax screens, with the premium-priced digital format contributing more than $15-million in the U.S. from only 275 locations.
The U.S. continues to be the largest global cinema market but China is the film industry's biggest source of new growth so Mississauga-based Imax has invested in new screens in the country to cope with soaring demand, says Rich Gelfond, chief executive officer.
"When Avatar opened in China in 2009 we showed it in 13 theatres, he told the Financial Times. "This year, when The Hobbit opens [in December]we will show it on more than 100 theatres in China."
China has swiftly become Imax's second-largest market after the U.S. - The Avengers generated $1.1-million in its first day on release in the country - and the group last year created a Chinese subsidiary to manage its expansion. It currently has 91 screens at cinemas in the country, with an additional 129 in its pipeline.
"When we used to announce new screens in China our investors would scratch their heads," says Mr. Gelfond. "But our per screen average in China is the best in the world."
China is driving international box-office takings for all of the big Hollywood studios and recently increased the quota of U.S.-made films it would release in its cinemas each year. "It means we can take more films to China, both 2D films and 3-D films," explains Mr. Gelfond. The increase followed the recent visit to the U.S. of Xi Jinping, China's vice-president and heir apparent for the top job.
With multiplex construction accelerating, the stakes are increasing for Hollywood in the country. Yet China's growth - and the race to win highly coveted release spots within its borders - has also attracted regulatory attention in the U.S. The Securities and Exchange Commission recently contacted the big film studios as part of a preliminary inquiry into whether improper payments had been made in the country.
The SEC scrutiny caused unease in Hollywood but Mr. Gelfond says there has been no impact on Imax or its own expansion plans. "Imax has not had any inquiries from the SEC," he says. "We don't import films into China … we just tag along when the studios import films."
Is he aware of individuals ever seeking improper payments? "I've never heard of it. We have strict policies in place [at Imax]and our management team knows we would have zero tolerance for it."
As the Chinese box office grows, so does the domestic film industry and its prospects on the international stage. "We're trying to export films out of China and into other markets," says Mr. Gelfond.
But other operators are trying to get in on the act. China Film Group has launched Dmax, a competing big screen system. "I'm not surprised at all that there is local competition," says Mr. Gelfond. "There's competition in the U.S., where exhibitors have tried to create competitive systems. But [CFG] doesn't have the relationships that we do or a strong brand."
Imax has taken a "long term view" in China, "instead of being an outsider trying to come in and make a killing … it took 45 years to build Imax."