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September 21 2009
A NOTE FROM IMAX CEO RICH GELFOND


September 21, 2009 To IMAX Guests and Fans: When we first released Star Trek: The IMAX Experience earlier this year, we received several direct complaints and saw some heated comments online about how some IMAX multiplex design locations were not “real” IMAX theatres. I’d like to address what happened, the results of the consumer research we conducted, and what we’re doing after hearing from consumers. In July 2008 we began accelerating the expansion of IMAX® theatres through the roll-out of our new digital projection technology. Our efforts coincided with progress by the entire film industry towards the transition to a digital platform, and we knew we had to embrace digital to remain a leader in the entertainment technology industry. Our goal was to develop a digital theatre system for multiplex design IMAX theatres, which would help us expand our business and improve our ability to bring more amazing 2D and 3D Hollywood content to IMAX audiences around the world. IMAX is a consumer brand, and your experience must always come first, regardless of how our business evolves. In fact, it took us around ten years to develop a digital system which we (and consumers) felt delivered the IMAX “wow” factor. The rapid expansion of IMAX multiplex design locations – facilitated by our digital system – enabled us to showcase Hollywood content like never before. For example, this year we were able to secure Star Trek for an exclusive 2-week run and to offer more than 10 Hollywood films in IMAX theatres in a single year. But, as with any change, the same business strategy that allowed us to show more films on more screens – and in more locations – also brought some consumer confusion and frustration about screen dimensions in some multiplex settings. Understandably, you care less about the business rationale for change than you do about the overall experience and whether you receive value for your money. Some of you went so far as to claim we were intentionally duping moviegoers. As the CEO of a company that cares deeply about its guests and somebody who recognizes that a brand’s strength is based largely upon meeting and exceeding consumer expectations, I was personally and deeply troubled to hear that some people felt we were intentionally misleading IMAX fans. This assertion was particularly upsetting given our customers’ traditional passion for IMAX and our reputation for excellence in technology and innovation. After hearing these complaints, I committed to do more consumer research to investigate satisfaction levels at the new multiplex design theatres and to find out if we needed to provide more information to ensure consumers knew what they were getting when they visited multiplex design IMAX theatres (as opposed to classic design IMAX theatres). We hired The Nielsen Company, an internationally known consumer research firm and quickly moved forward with a survey of more than 6,000 IMAX moviegoers in both classic design locations and multiplex design locations during the run of Night at the Museum: Battle of the Smithsonian: The IMAX Experience and Transformers: Revenge of the Fallen: The IMAX Experience. The research included 11 IMAX theatres across the United States, and to ensure that we tested consumer satisfaction levels across an array of screen sizes and projection types, we surveyed three classic design and eight multiplex design locations (representing both film-based and digital projection systems) with IMAX screen sizes ranging from 50.5’ wide x 28.5’ high to 84’ wide x 63’ high. IMAX theatres come in all shapes and sizes, but they all need to deliver The IMAX Experience, or we haven’t done our job. The big picture (pun intended) finding was that the satisfaction levels in both classic design and multiplex design IMAX theatres were almost identical, regardless of screen size. Additional highlights: - The satisfaction levels for the individual elements of The IMAX Experience were similar (aggregate of “extremely” and “very” satisfied) in classic design and multiplex design locations - Screen size: ~88% for classic design and ~85% for multiplex design - Image quality: ~86% for classic design and ~86% for multiplex design - Surround sound: ~89% for classic design and ~87% for multiplex design - Sense of feeling immersed: ~87% for classic design and ~83% for multiplex design - The vast majority of moviegoers are drawn to IMAX because they expect the experience of IMAX is better than a regular theatre (~89%), and that IMAX provides good value entertainment (~81%). You can find a thorough summary of the research results. Click HERE. The survey results and your reactions to The IMAX Experience have given us greater insight into some of the reasons for the increasing enthusiasm we’re seeing for IMAX films. It is important to note that the research was conducted in 2D where one would expect the most confusion to arise, not 3D, where IMAX’s immersive premium over a conventional theatre is even more pronounced. Although our research shows that audiences like IMAX in each of its various shapes and sizes, we would like to create greater transparency regarding our theatre locations to help consumers make sure they know “what they’re getting” when they visit an IMAX theatre. We are indicating which locations are multiplex design on IMAX.com, so when you want to find a location nearby, you will know if you are going to one of the locations that is an upgrade to an existing auditorium or a classic design. We’re also offering movie theaters information flyers that will be available at the box office so you can fully understand the components that make up The IMAX Experience at the point of purchase. We are proud that IMAX is a cherished consumer brand, which stands for the most immersive way to experience the best Hollywood movies and entertaining documentaries. Digital technology has enabled us to reach further, grow larger and be more available to consumers. But we understand that as IMAX evolves, we must remain in touch with what consumers expect from us, and we will continue to try to ensure that The IMAX Experience meets your expectations. While we recognize that we may not be able to please everyone all of the time, we do welcome your feedback and suggestions. Sincerely, Rich Gelfond