Imax Corp. plans to almost triple its number of cinemas in Japan by 2024, betting on a strong rebound from the coronavirus pandemic in the world’s third-largest movie market by box office.
The jumbo-screen operator is targeting an expansion to 100 theaters — including those that are operating and others still scheduled to open — from 39 now, Chief Executive Officer Richard Gelfond said in an interview ahead of first-quarter results Thursday. Imax has also renewed an agreement with Toho Co. to release five more of the studio’s films, with titles to be confirmed later, Gelfond said. Their initial slate deal for five movies was Imax’s first outside of Hollywood.
Japan has generally been a bright spot for Imax during the COVID-19 crisis, last week becoming its second-largest market after China this year with $14 million (¥1.52 billion) in ticket sales, 11% of the company’s global total. Japan has collected an average box office gross of $1.2 million a screen for Imax during the pandemic, the highest among all markets, according to Gelfond.
“Pent-up demand for out-of-home entertainment drove outsized market share for Imax in China, Japan, and elsewhere in Asia over the last several months,” Wedbush analysts Alicia Reese and Michael Pachter wrote in a note Friday. “We expect similar pent-up demand in North America and Europe to result in market share gains once the film slate returns to a normal cadence.”
The cinema industry has been hit hard by the pandemic. Theaters have been forced to close their doors to customers in many countries, and people have shifted to streaming movies from the safety of their homes. Imax reported a $144 million loss last year. The average estimate from analysts is for a narrowing of losses to $18 million in the three months through March.
Japan hasn’t been without challenges. A virus surge led to a state of emergency being declared in Tokyo, Osaka, Hyogo and Kyoto prefectures on Friday, just ahead of the national Golden Week holidays. The move coincided with the release of “Rurouni Kenshin: The Final,” which took a disappointing $450,000 in Imax ticket sales over the weekend.
Gelfond said 14 of Imax’s cinemas that typically account for half of the company’s box office revenue in Japan will be closed through May 11. While studios may reschedule near-term releases, the emergency hasn’t affected Imax’s slate of films for the rest of the year or 2022, he said.
“These temporary closures will not have a material impact on our outlook for the rest of the year or our overall positive momentum in Japan,” Gelfond said.
Imax’s expansion plans have been bolstered by record-breaking Japanese movies, including “Demon Slayer: Kimetsu no Yaiba the Movie: Mugen Train,” which is backed by Sony Corp. and Toho and became the country’s highest grossing movie ever, as well as the world’s fourth-biggest title last year.
Potential blockbusters lined up for release in Japan include “Godzilla vs. Kong,” due out May 14, “Fast & Furious 9” and “Top Gun: Maverick.” Last month, “Shin Evangelion” set a record opening-day box office for Imax in the country.
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