Imax, more closely tied to the Chinese film industry’s fortunes than most Hollywood players, has felt the chill as box office in China faltered amid that country’s continuing coronavirus-era lockdowns.
But Imax CEO Richard Gelfond, whose company licenses its technology to around 800 Imax-branded theaters in China, is feeling the warmth as media reports suggest that Asian country may relax its zero-COVID policy, ease regional lockdowns and allow more Hollywood movies screen in its theaters.
“As we mentioned on our earnings call, we’re optimistic that the business environment in China will improve and we’re pleased to see small, continued evidence to support our belief,” Gelfond told The Hollywood Reporter in a statement on Friday.
On Oct. 31, he argued during an analyst call after the release of the company’s latest financial results that Imax screenings of local language films have done well when regions of China relaxed COVID restrictions. “When those breaks occur, we’ll perform extremely well again,” he predicted, especially if James Cameron’s Avatar sequel plays well globally and, as is expected, in China and possibly kick-starts a Hollywood box-office recovery in that market.
“The one thing to really watch is Avatar in the fourth quarter because I think if Avatar performs according to our expectations, and also gets in (to China) as we think is more likely than not, than very quickly that will change the narrative in China and the narrative around the introduction of non-Chinese films into China,” Gelfond argued.
The 2010 release of the original Avatar movie was a major event for Chinese filmgoers and they are expected to embrace Avatar sequels.
Investors are also betting that China loosening controls — COVID-19, censorship and otherwise — will allow more tentpoles to screen on Imax screens, as the share price for the film technology company climbed 76 cents, or just over 6 percent, to $12.95 in mid-afternoon trading on Friday.
After the Chinese Communist Party Congress recently concluded, Wall Street watchers are hopeful that regulators in that country will loosen requirements for high-earning Hollywood imports as COVID lockdowns lift and that the range of Chinese films deemed politically acceptable widens.
Besides having just over half of its global network of 1500 giant screens in China, Imax is banking on another 200 theater installations in that Asian market over the next few years. China generally accounts for a third of Imax’s overall global box office revenues, though that tally fell to around 25 percent during the first half of 2022 due to COVID lockdowns in that Asian market and the relative strength of rest-of-the-world box office receipts.