IMAX CEO Says 2023 Will Be a Return to Pre-Pandemic Box Office — for IMAX

No one is having a happier New Year — or a happier Chinese New Year — than IMAX CEO Rich Gelfond.

Gelfond, in a chat with IndieWire following the company’s Q4 earnings call, said he expects IMAX will return to its pre-pandemic gross box office level of $1.1 billion in 2023, up from $850 million in 2022. (There are increased ticket prices and inflation to factor in here with a pre-Covid comp, but Gelfond didn’t have that math available in our interview.)

Reaching 2019 levels is certainly not the case for the more traditional movie-exhibition industry at large, and Gelfond feels it won’t be returning to normal for those guys any time soon.

“They can’t. The overall box office in that traditional model won’t support a return to 2019 levels. But the fact that IMAX is in the blockbuster business, not the overall movie business, and the fact that we’re diversified and global, enabled us to get back to those levels, where I don’t think people in other businesses can,” he said.

While audiences have demonstrated they’re willing to pay a premium to see massive blockbusters like “Top Gun: Maverick” or “Spider-Man: No Way Home” on the biggest screen with the best quality, audiences aren’t necessarily coming back for everything else. In 2019, the box office globally hit an all-time high of $42.3 billion. The 2022 box office globally hit just $26 billion, still a 27 percent improvement on 2021, but leaving a long way to go. And forecasts for 2023 remain conservative, with Gower Street Analytics guessing the box office will hit $29 million around the world.

AMC, the world’s largest movie exhibitor, reports its own fourth-quarter earnings on February 28. We should get some ’23 guidance from them then.

The “rapid reopening of China” from its long-existing “zero Covid” policy is playing a big role in IMAX’s turnaround, Gelfond said on Wednesday. Gelfond’s company enjoyed a record-breaking Chinese New Year box office of $61.3 million, with $50.4 million of that coming from “The Wandering Earth 2,” now the highest grossing Chinese film ever in IMAX. And then there was “Ant-Man and the Wasp: Quantumania,” which got off to a disproportionately large start in China. The Paul Rudd Marvel movie opened to $24 million (over four days) on IMAX screens globally — more than the previous two “Ant-Man” films combined.

A spy balloon, not THE spy balloon

Getty Images/iStockphoto

Gelfond says he’s not worried about the Chinese box office falling victim to geopolitical issues, such as the one raised by the recent discovery — and subsequently, the shooting-down — of the Chinese surveillance balloon in U.S. territories.

“I don’t worry at all, and the reason is I’ve been to China 57 times over 20 years. And I think there’s a lot of noise around a lot of things, but I think, generally, the Chinese are focused on getting their economy back to where it was — and growing,” he told IndieWire. “I don’t think that, kind of silly sideshows are going to derail that.”

“Going to the movies is a way that they get people to go to malls in China, and I think the economic success…is their No. 1 priority,” Gelfond added. “I don’t think they’re going to cut off their noise to spite their face in terms of responding in a tit-for-tat fashion over minor issues.”

Considering the “Avatar 2” performance over there — and everywhere, really — you can’t blame Gelfond for remaining professionally bullish on China.

IMAX has already made $110 million, globally, off of “Avatar 2” in 2023 (on top of $140 million in ’22). With just 1 percent of movie screens, IMAX has hauled in 11.3 percent of the “Avatar” sequel’s global box office. “The Way of Water” is the highest-grossing IMAX release of all time in 48 countries. There are three more “Avatar” sequels planned.

“We made a bet that ‘Avatar’ was going to work, and it did,” Gelfond said. “There was a day when $250 million for a movie was a lot of money, and IMAX did it on only less than 1 percent of the screens in one distribution channel. So the good news is I think the case for ‘Avatar’ going forward is an obvious one.”

Gelfond also believes that seeing movies in 3-D on an IMAX screen won’t stop with “Avatar” and will “see an uptick,” but unlike the prior 3-D wave (spurred on by the original “Avatar”), it will be more geared toward specific markets that have a high demand to see movies in 3-D like in China and southeast Asia.

IMAX CEO Rich Gelfond at a screening of “Avengers: Endgame” in 2019.

Getty Images for IMAX

IMAX enjoyed its greatest market share, both domestically (4.8 percent) and globally (3.3 percent), of the box office in 2022. And Gelfond isn’t losing sleep over theater closures because of bankruptcy at places like Regal and its parent company Cineworld, namely because IMAX screens are generally available at those theater chains’ top performing multiplexes, most of which won’t close no matter what happens to those companies. Gelfond added that Cineworld in particular has already “reaffirmed its IMAX commitment” and paid up “in full.”

“I’ve been around IMAX long enough to remember the 2001-2002 bankruptcies, and at that time almost all of our clients were bankrupt, and we’re incredibly stronger than that 20 years later,” he said. “Where our locations are aren’t really at risk because of bankruptcies.”

IMAX’s revenue and earnings declined in the fourth quarter of 2022, hitting $98 million in revenue, a 10% drop from the year prior. Both rose, however, for the year in totality, up 18% to $300.8 million; IMAX lost money in 2021.

Gelfond is looking forward to 2023’s “complete, balanced, and consistent” slate, which for IMAX will include “Oppenheimer,” “Dune: Part Two,” “Guardians of the Galaxy: Vol. 3,” “Aquaman and the Lost Kingdom,” “Mission: Impossible — Dead Reckoning — Part One,” “Fast X,” “Transformers: Rise of the Beasts,” and “Indiana Jones and the Dial of Destiny,” among others.

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