IMAX CEO: Streaming exclusives ‘became some of the most pirated movies ever’

IMAX CEO Richard Gelfond joins Yahoo Finance Live to discuss 2021 box office earnings, film trends, theater releases, and streaming partnerships.

Video transcript

- All right, so I can give you 638 million reasons our next guest, Richard Gelfond, the CEO at IMAX, is smiling. I also want to bring in Allie Canal, our reporter for Fame and Fortune. And Richard, congratulations. That $638 million is your global box office for 2021. And that's a year when we're in recovery from the pandemic. I would imagine you have great expectations for 2022.

RICHARD GELFOND: Yeah, I do. And in fact, putting that number in context, the overall movie industry was up about half of what we were up from 2020 to 2021. So to put it in context, our percentage increase was double the percentage increase for the rest of the industry. So that just shows people want to go back to movies. And then when they go back, they want it big. They want the sound to be great. And they want it to be a great experience. I think they've had enough time on their couches. And when they go to the movies, they don't want to see kind of a normal thing. They want something really special. And IMAX plugs that gap.

ALLIE CANAL: Hi, Richard. Allie Canal here. As Adam was saying, you have some pretty impressive numbers here, especially considering we're still in the midst of this pandemic, yet another variant. As we head deeper and deeper into this year, what are some of the biggest risk factors that you think could halt that momentum?

RICHARD GELFOND: First of all, I chopped off the second part of his question, which is about 2022. And 2022 is a year filled with blockbusters. So it includes three Marvel films, including "Black Panther" and including "Thor," three DC movies, "Top Gun," "Avatar," "Jurassic World." People get-- dinosaurs and IMAX kind of makes a lot of sense. So when you're asking me, what are the risks that could happen this year?

I've learned never to say never in terms of risk. I think if "Spiderman" showed anything, it's that the demographic is willing to go out, even though the world isn't COVID perfect, and go to a shared cultural experience and see it. So I think unless COVID know turns much worse in that period, I don't think that's going to cause a big negative for the year. I think, ironically, one of the biggest problems is some studios who don't have faith in the theatrical release.

As you know, during '20 and '21, they go out of the movie and they put them on [AUDIO OUT] streaming. And a result of that was they didn't have good box office performance. And even in streaming, as you've seen from the streaming numbers, people didn't sign up for streamers for movies. So I don't think that's going to be the case, because every major studio has kind of gone to a 45-day exclusive theatrical window. But that could be a risk.

Again, remember we're a global business, not just US-based. As a matter of fact, only one third of our revenues are from the domestic box office. So things can happen overseas that we don't see happening now. But you asked me the question, risk, I think '22 has one of the best slates I've ever seen in advance, in terms of what the outlook is going forward.

- Richard, this is Emily here. You were talking a little bit about streaming and straight to streaming. And Disney recently announced that it is sending its next Pixar film, "Turning Red," straight to streaming on Disney Plus. Do you expect more studios to make similar moves for some new releases this year? And how many of these releases would need to go potentially straight to streaming for you to actually see an impact as a theater operator?

RICHARD GELFOND: Well, you have to remember that IMAX is in the blockbuster business. The movies we do are not mid-level movies. They're big budget, kind of global events. And they're based on the "Spiderman" model. And the reason that model works so well is you create global buzz, the talent's out there, global communities. When they tried in 2021 to do hybrid releases or put things on streaming services exclusively, the numbers just didn't work. And you could go through all the data. The first film that really came out with a theatrical release-- there were a couple. There was "No Time to Die," the Bond movie. There was "Shang-Chi," the Disney movie. There was a Universal movie, "Fast and Furious 9."

And the numbers just speak for themselves. The model of simultaneous streaming didn't work. And the ones that were put on streaming became some of the most pirated movies ever in the history of the movie business. So I really don't think that's going to happen for blockbusters. You talked about Pixar. That's more of a family-oriented product. The kids haven't been vaxxed. It's coming out fairly early in the year. I just don't think that's representative. Again, I think the big budget blockbuster movies are going to be theatrical exclusively for a while.

ALLIE CANAL: And sticking with the streaming theme here, I want to call out some of your streaming partnerships. You have exclusive deals with Disney, Amazon Prime, airing the new Beatles documentary, "Get Back," in IMAX locations, along with Kanye West's "Free Larry Hoover" concert featuring Drake. And this is an interesting trend, I think, heading into 2022, because as you mentioned in 2021, we have that hybrid release experiment. But for 2022, sort of be a backwards model, where things that were streaming exclusives, they end up popping up in the theater. And how do you expect those streaming partnerships to evolve, as we get deeper and deeper into this year?

RICHARD GELFOND: I think as we look forward, we're thinking of a world where we don't just event-icize movies. But we also event-icize different kind of events. So at the end of the last year, as you mentioned, we did the Kanye Drake concert. And to see it in an IMAX theater, it's amazing. People were dancing in the theater. When you think of going to a live concert, you're watching it on a screen, anyway. And you can't see a lot of the talent performing. So even though it was simultaneously on Amazon, our results were extremely impressive.

The Beatles concert, which you mentioned, we're doing with Disney Plus. And it's the 50th anniversary of the roof concert, which is their final concert. So we just put tickets on sale last week. And with no marketing, other than online, we've sold out about 50% of the shows already. So that's extremely promising. And our joint venture with Disney Plus involves taking films that have already been released in the theaters, and now are being released online, and changing the aspect ratio, and doing more of the film on Disney Plus and IMAX.

And I think if you look at the last couple of months, we did "Macbeth" with Apple, in terms of an IMAX promotional release. We did the Kanye concert with Amazon. We did "West Side Story" with Disney Plus. And we're on Disney Plus for their Marvel films. So I think you'll see us increasingly moving in the direction of event-icizing things other than traditional blockbuster movies. I should say, in addition to blockbuster movies.

- Richard Gelfond, CEO from IMAX. All the best to you. Allie Canal joining us from our Florida Bureau. Bring some warm weather when you come back to the North, please.