Imax Case Study Imax's General Case Study

Length: 10 pages Sources: 2 Subject: Film Type: Case Study Paper: #17611363 Related Topics: Movie Industry, Study Guide, Documentary Film, Theater
Excerpt from Case Study :

d.). This de-institutionalization of the company will help bring the IMAX experience to new movie goers. To further broaden their appeal, IMAX has diversified their movies as well.

IMAX's second part of their business strategy centers on bringing more Hollywood movies to their large format screens. Whether it be remastering previously released films or simultaneously new films, IMAX has worked hard to expand their audience from those who typically enjoyed the unique IMAX documentary films that started the company. Costs of conversions of existing films has reduced significantly, at $22,5000 to convert a standard two-dimensional film and $45,000 to convert a 3-D film ("IMAX: Larger," n.d.). These 3-D films are also a part of the company's current business strategy.

Technological development to improve movie goers' experience as well as differentiate their product from other traditional theaters is a primary focus of IMAX's business strategy. The company has committed both financial and human resources to this strategy. In 2007, the company spent nearly 5% of their revenues on Research and Development. Nearly 1/6th of their employees were assigned to Research and Development tasks. Over the past 3 years, IMAX has spent approximately $12.6 million on Research and Development, resulting in 46 patents, with 7 more pending ("IMAX: Larger," n.d.). The result of this R&D focus has been several technological advancements.

IMAX has created a unique 3D camera and projection system. Realistic 3D images are created as the audience wears "polarized or electronic glasses that split the images for the left and right eye by using liquid crystal shutter lenses that were controlled by an infrared signal and opened and shut 48 times per second in coordination with the projector to create a 3D effect" ("IMAX: Larger," n.d., p. 3-4). IMAX also developed a revolutionary, lightweight 3D camera that was used to shoot footage on the International Space Station. This new 3D technology is complemented by the 12,000 watts of realistic, distortion-free sound that features 3D directional sound technology, giving the sound actual depth and location. Going digital was another breakthrough thanks to IMAX's strategy of intense Research and development.

In the beginning, IMAX film was 10 times larger than traditional 35mm film. Each frame of IMAX film had 15 sprocket holes, to guide it as opposed to only 4 found in each frame of 35mm film ("IMAX: Larger," n.d.). Because of the film's larger size, it was much more costly to print and distribute when compared to regular film. With their development of digital camera and projectors that are planned for installation in 2008, IMAX will be able to produce and distribute their films at a much lower cost making them more competitive with traditional films.

Conclusion: Can IMAX Survive as a Niche Player?

Treading into Hollywood territory has both its advantages and disadvantages for IMAX. The question then remains -- Can IMAX survive as a niche player or do they have to expand their product line in order to survive? IMAX's previous success has been based on their unique form of film entertainment. No other movie theater offers the full immersion into the film that IMAX does. From the 8-stories high and 120-feet wide screen to the 12,000 watts of distortion-free, 3D sound, an IMAX film is beyond simply going to the movies. The company traditionally has taken this technology and produced award-winning, documentary style films that can showcase their innovative technology. In some instances, such as Nascar, the films have been well received and have been financially successful. However, in other instances there have been films that were poorly attended and, despite the lower production costs of IMAX films in comparison to many Hollywood films, have not been financially successful.

The company's primary location choice has been within institutions including: museums, aquariums, and the like. This too has had its advantages and disadvantages. The location choice has set IMAX apart from other traditional, regular movie theaters. The prestige of the locations has reflected well on IMAX, as a whole, helping build its brand. However, these more obscure location choices...


Although this niche has helped build the IMAX company and brand, only by expanding their product line can IMAX hope to be financially successful, in today's hypercompetitve marketplace.

The market reality IMAX operates in is much different than when the company was founded nearly four decades ago. In the 1970s, movie theaters were the primary place consumers could go to see movies. Today, moviegoers have a multitude of choices to fulfill their movie going needs. These include a greater selection of traditional movie theaters, including discount, second run theaters, DVD rentals from local stores or through online services, DVD purchases easily found in a variety of stores, and the Internet via movies on demand or the multitude of independently produced films, not to mention the scores of movie channels available on cable and satellite TV as well as the made-for-TV movies that are continuously being released. Today's audience is different from the movie audience that was prevalent forty years ago.

Today's moviegoers not only have greater access to a wider selection of films, but also to media in general. From hundreds of channels on television, to instant access to almost any topic imaginable on the Internet, today's moviegoers are bombarded with information. This has made them a more knowledgeable and a more discerning movie audience. Couple this with a challenging economic environment and consumers becoming more choosy about their discretionary spending, and it becomes clear that this is not the same environment IMAX operated within when it was originally founded. This increased competition and changing consumer means IMAX must change with the times.

An organization can offer the most innovative, highest quality product imaginable; however, if there are not enough consumers who value this product the organization will fail. IMAX needs to understand the current movie industry as a whole to re-situate itself in its own little niche. Redeveloping its own niche will mean IMAX will have to evolve to meet these new challenges, but still keep some of the strengths that have made it so successful in the past.

Although there is a concern that increasing the number of Hollywood films released in IMAX format will dilute the brand, if done correctly this concern will be a non-issue. Certainly taking every major film released and converting into the large format would lose the unique identity that IMAX has worked so hard to create. If the company were to pursue this strategy they would simply become a large-formatted Regal Theater, or whichever other movie theater chain they chose to partner with. However, it has become clear that simply making their more traditional documentaries is a riskier financial path. Instead the company has to walk a fine line between the two to develop its new niche.

By selectively converting Hollywood films, IMAX will be able to attract new consumers to the IMAX experience. These mainstream films should be chosen for their ability to best take advantage of the IMAX large format and experience immersion, just as the documentaries are chosen to be produced. Also, IMAX needs to choose Hollywood films that are expected to be more successful than average -- blockbusters. In selectively choosing which Hollywood films to convert to IMAX format, IMAX will not simply become one more traditional theater that just happens to be on a larger screen.

To further differentiate themselves from the mainstream movie industry, IMAX can employ their 3D technology when remastering Hollywood films. The Polar Express in 3D was a huge success for the company and because it offered an easily understandable difference from the standard theater release, it meant many people saw it in both formats. When simultaneously releasing Hollywood films in both standard and IMAX formats, offering a 3D version not only builds value for the customer, offsetting the additional surcharge for an IMAX ticket, but also makes the 3D version its own entity reducing the competition between it and it's standardly formatted brother. Despite this need to evolve, IMAX cannot forget its roots either.

IMAX's documentaries especially chosen and created to showcase the technological wonders of IMAX need to continue to be created in order to maintain the heart and soul of the IMAX brand. These artistic films are what will make IMAX the leader even if other competitors enter this particular niche. By offering remastered Hollywood films, and using opening marketing opportunities to expose a wider variety of consumers to what IMAX is, more demand should be created for these documentary films as well. Just as IMAX needs to retain it's production heart and soul, their core placement in institutions must be preserved as well. Although expanding into more traditional theater venues, through partnerships such as formed with Regal, will increase IMAX's exposure, in order to protect the IMAX brand it still needs to maintain their positions in prestigious institutions that reflect the center of the corporation.

Balancing these sometimes diametrically…

Sources Used in Documents:


"IMAX: Larger than Life," 2009, Richard Ivey School of Business, the University of Western Ontario.

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