There’s been something notable about ticket sales for “Dune,” and not only because the sci-fi adaptation of Frank Herbert’s landmark novel has managed to draw crowds in theaters despite playing simultaneously on HBO Max.
In its first weekend of release, half of domestic box office revenues for the Warner Bros. film came from Imax, Dolby and other high-end screens, known in the film business by the unwieldy moniker of premium large formats (PLF). For the average visual-effects heavy tentpole, 30% of ticket sales coming from these venues would have been noteworthy. Overall, “Dune” has made $75 million in North America — and more than $17 million has come from premium formats.
“The 50% is a ridiculous number,” Jeff Bock, a box office analyst with Exhibitor Relations, says in reference to opening weekend sales. “Imax was a huge selling point for ‘Dune’… you had to see it on the big screen for the spectacle.”
“Dune” may be the most dramatic example of Imax’s newfound influence, but it’s not the sole blockbuster in pandemic times to generate outsized receipts from premium screens. At a time when the domestic box office recovery is shaky, at best, there’s at least one component of the movie theater business that has rebounded more successfully from a post-pandemic malaise. Imax and other premium large formats have been experiencing a notable uptick in ticket sales from Marvel’s “Shang-Chi and the Legend of the Ten Rings,” the James Bond sequel “No Time to Die,” Sony’s comic book adventure “Venom: Let There Be Carnage” and more.
“Since films have opened with exclusive windows, the numbers have been spectacular,” says Richard L. Gelfond, the CEO of Imax Entertainment. Last month, Gelfond says, Imax had its biggest October in history with $117 million in box office receipts. Box office prognosticators believe November, with the release of “Eternals” and “Ghostbusters: Afterlife” and few other big-budget spectacles, will not be as strong as October. However, momentum could pick up again in December as “Spider-Man: No Way Home” and “The Matrix: Resurrections” debut.
“Imax the best positioned because they’re solely focused on the biggest films, and they have a global footprint,” says Eric Handler, a Wall Street analyst with MKM Partners. “They don’t own theaters so they don’t have that huge fixed-cost expense that theater operators have.”
It’s understandable why Imax and other PLF screens have been popular to blockbuster-hungry audiences. You can buy a nice TV and install speakers with state-of-the-art surround sound at home, but it’s nearly impossible to replicate the immersive feel of watching a blockbuster on a screen that spans more than 75 feet.
“People have spent so much time [during the pandemic] on the couch, streaming TV shows,” Gelfond says. “When they go out, they want something special.”
Adds Bock: “Bigger is better when you are talking about movie screens. Most blockbuster aficionados want the cinematic experience, and that’s what [premium large format] companies deal in: bigger, better, louder.”
Imax isn’t entirely free from pandemic-related destruction. Though it had its best quarter since COVID-19 upended the theatrical business, it didn’t make a profit in the three month period ending in September, netting $8.4 million in losses from the same frame in 2020. Moreover, Imax is reliant on the health of the film exhibition industry. Since its screens are located in major cinema circuits, it would not do the company any good to watch AMC, Regal Cinemark or other chains struggle.
“Their challenges are no different than the rest of the industry,” Handler says. “Is the box office going to get back to normalized levels? They need a healthy theater ecosystem. For them, having these companies in healthy financial positions is important.”
Assuming the movie theater business eventually stabilizes, few exhibition-oriented companies appear to be as well positioned to endure the industry’s tectonic shifts, which have been accelerated by the pandemic. New movies play on Imax screens for two weeks, at most, so it’s largely unaffected by the threat of shortened theatrical windows, the battle for the amount of time a film screens exclusively in theaters. It also doesn’t bank on mid-budget comedies and dramas, the genres that have mostly fallen out of favor with moviegoers, to sell tickets.
Jeff Goldstein, the president of domestic distribution for Warner Bros., called the better-than-expected results for “Dune” on premium large formats “a total outlier.” However, he expects that movie theaters will soon “morph into a blockbuster platform.”
“Blockbusters will have a bigger role in theaters,” Goldstein says. “Studios will learn to really lean into the big screen experience.”
Imax may have benefitted from timing, but Gelfod says its prime position is not accidental. Even before the pandemic upended the way people consume entertainment, Imax has pushed to more aggressively integrate itself in the moviemaking process. In the next year, there will be at least 10 movies — “Jurassic World: Dominion,” “Doctor Strange in the Multiverse of Madness” and Jordan Peele’s “Nope” among them — that involve Imax cameras. Recent and upcoming films from directors like Denis Villeneuve, Chloe Zhao and Peele have started shooting with the technology instead of retrofitting it later in the process. In the case of “Dune,” Villeneuve actively advocated for audiences to watch his movie on Imax screens. And he’s not alone. Christopher Nolan, the filmmaker of “Tenet “and “Inception,” and Michael Bay have long been vocal champions of the premium format.
“Studios and filmmakers have approached us because they understand the differentiation is really attractive to audiences,” Gelfond says. “In other cases, we’ve actively gone to studios and encouraged them to shoot the films with our technology.”
Imax screens may be more expensive than a standard movie stub, but audiences currently seem to be willing to shell out a few extra dollars. Box office watchers believe the format’s marked up prices could help offset the trend of declining ticket prices.
“It’s good for the longevity of the theatrical business,” Bock says. “High-end ticket prices is what is going to drive the industry. People who enjoy popcorn films are willing to pay the extra price for the big screen experience.”
The issue, at least for the rest of the movie theater business, is that not every film lends itself to the Imax experience. “If the movie involves two people drinking wine in a cafe in Paris, that may be close in the home and theater in terms of how rewarding it is,” Gelfond says. “If it’s fantasy world that benefits from big sound, you want to see it in a certain way.”
So what does it mean for Hollywood players who don’t specialize in big-screen spectacles? “It’s going to be more difficult for studios who aren’t pushing a Marvel product,” Bock says.
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