Analyst: Imax ‘Insulated’ From Streaming, PVOD Threat

With its massive 72 feet by 53 feet screen — about 10 times bigger than 35mm film — Imax theaters deliver oversized movie screen images with surround sound. Those attributes are what some observers believe makes the company immune to threats from streaming and premium VOD.

The company reported second-quarter (ended June 30) revenue of $8.9 million, which was down 92% from revenue of $104 million in the previous-year period.

Michael Pachter, media analyst with Wedbush Securities in Los Angeles, said Imax’s financials remain unimportant until the pandemic ends. He expects the exhibitor to resume “impressive top and bottom-line” growth once a vaccine is found and introduced into the market.

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“We do not think Imax’s survival is at risk,” Pachter wrote.

Additionally, with AMC Theatres upending the traditional box office window by allowing Universal Pictures to deliver new-release movies into consumer homes just 17 days after their theatrical bow, the analyst says Imax’s unique consumer offering makes it immune from PVOD and subscription streaming services.

“Imax screens are largely insulated from the threat of streaming services, we expect [the company] to resume expanding its market share,” Pachter wrote. “We think Imax is best positioned within theatrical exhibition for a full rebound.”

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That said, the analyst contends the overall health of the box office is key to Imax’s return to screen growth and could take some take time. Pachter said Imax would benefit if more studios choose to release films internationally and in China before domestically.

“Should screen growth resume earlier, we would expect the [Imax] share price to materially improve,” he wrote.

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