IMAX to Build Up to 120 New Theaters in China
By Wall Street Journal: Xiaoqing Pi on July 24, 2013
Deal With Dalian Wanda Follows Pact With South Korean Partner
BEIJING—IMAX Corp. IMX.T -0.15%is joining with China's largest cinema chain to build as many as 120 new theaters in the country, dwarfing a deal that the company announced with a Korean partner last week.
The Chinese deal is IMAX's latest to target Asian consumers' increasing demand for watching Hollywood blockbusters on bigger, more immersive screens.
Under the agreement, IMAX will add between 40 and 120 theaters. At most, it would bring to 381 the number of IMAX theaters open or planned in China, with Wanda Cinema Line Corp. running up to 210 of them.
Wanda will build 40 new theaters by 2017 and the rest by 2020, said Wanda General Manager Jerry Ye.
There were 126 IMAX theaters in operation in China at the end of June. Greater China accounted for 15% of IMAX's first-half revenue.
If Wanda builds all 120 theaters, IMAX would generate as much revenue from China as the U.S., said IMAX Chief Executive Richard Gelfond.
"Chinese customers are well advertised for affordable luxuries," he said. An IMAX ticket at a Wanda Cinema theater can cost as much as 160 yuan, or roughly US$25, while a ticket for a regular-format movie costs about 60 yuan. Mr. Gelfond said he was confident about IMAX's future in China as the country switches to a consumer-driven economy.
Huang Ting, an analyst with EntGroup, said she expected that the growth of IMAX screens in China would slow in the next few years.
Seventeen IMAX films have been released in China this year, with the next, American action film "Fast & Furious 6," coming out this week. Read more on The Wall Street Journal's website.