The "Barbie" movie and Christopher Nolan's "Oppenheimer" have taken movie theaters by storm this summer, with the latter being shown on IMAX screens. IMAX CEO Richard Gelfond sits down with Yahoo Finance Live to discuss summer box office results for the film technology company as it expands further into foreign markets, including China. Gelfond also comments on the films slated for IMAX releases this year and 2024.
Video Transcript
- Well, last weekend kicked off the movie event of the summer. We're talking about Barbenheimer, the debut of "Barbie" and "Oppenheimer" bringing millions of moviegoers to theaters. Greta Gerwig's-directed blockbuster backed by Both Mattel and Warner Brothers collected another $182 million from 69 overseas markets, bringing its global total to $337 million. And "Oppenheimer" brought in another about $93 million from 78 international territories resulting in a $174.2 million global haul. Christopher Nolan's fans traveled far and wide to a select few IMAX theaters to see "Oppenheimer" in its intended 70 millimeter film format.
For more on the film and entertainment industry, we're joined by Richard Gelfond, chief executive officer of IMAX corporation. Our Allie Canal is with us as well. You guys also reported earnings that got a boost from "Oppenheimer" which was really interesting, Richard. Talk to us about how the year has gone and sort of then "Oppenheimer" really being successful for you all.
RICHARD GELFOND: So the earnings haven't yet got a boost from "Oppenheimer".
- Right, but you talked a lot on the call about how big it was for you all.
RICHARD GELFOND: We did, and the narrative is our first quarter was really good. Yesterday we reported our second quarter, and we beat pretty much all the key indexes by about 30%. And the reason for that is there's been a paradigm shift. So our market share in North America is up 50% from pre-pandemic and globally, it's up very strong as well. When people go out, they want something really different than their couches. They had enough of that, and they're willing to pay for it. So as a result, our box office is tracking towards 2019 pre-pandemic levels. And other areas of our business like signings and installs are also doing very well, which lead to network growth.
"Oppenheimer" has made this already the biggest July in IMAX's history. And we're over $50 million for the first four days just in IMAX. And remember, we're less than 1% of the screen showing it. So obviously, that bodes very well for the third quarter right now. So the year is set up nicely, our stock is up very big today. And I think it's a matter of taking out your pen and adding up the numbers for the first two quarters, third quarter. Look at what a fair multiple is. And we've been very undervalued. But I hope now is the turning point for that.
ALLIE CANAL: And Richard, I want to talk about China because we've seen some softness in that market. "Mission Impossible 7" for example, those movies typically do very well in China but not so much this time around. It seems like Chinese moviegoers, they want more local language titles. Given how global your business is, is that a concern at all?
RICHARD GELFOND: Yeah, I mean, you're right. The Hollywood films have not done as well as they have in previous years. The good news for IMAX is we've really overindexed. So whereas we used to do for US films about 10% of the Chinese box office, now we're doing 15%, 20% of the Chinese box office. So part of the narrative I was just talking about, gaining market share has insulated from some of that, not all of it. The rest of it though that's really helped us is local language films.
So we pivoted several years ago to where-- I don't know, around half of our slate there are Chinese films. And there was a film this weekend called "Creation of the gods," a Chinese language film. And we did about 16% of the Chinese box office on IMAX screens, 1% of the total. So again, this whole shift I've been talking about has really buffeted us against some of those changes.
But I think what's going on in China is it seems like so long ago, COVID. But in China, they just lifted the quarantine in December. So if you look at the rest of the world, we've been out of it for like, two years. China's been out of it only for six or seven months. So it's coming back, it's just taking a little more time.
- When you think about the number of new screens that you're trying to get into for IMAX, I mean, you've already got your baseline that you've communicated to the street. What would really look like the marker of success if you were able to expand here in the US, but also internationally as well?
RICHARD GELFOND: Well, I think the marker of success is what we announced yesterday, a more up to 85 new signings, and 80% of those are new theaters, and they're in every region of the world. China, the US, Canada, Europe. But we announced we're at about 85 signings so far. And last year for the whole year, we did 47. So we're at 85 and halfway through it. So we've seen real demand from our exhibition partners.
Again, our model is we license our technology, and they've seen the results. And when you look at a movie like "Oppenheimer" or "Avatar" or "Guardians of the Galaxy" or the Chinese local language movies this year, I mean, the models really attractive for them. And they're stepping up and they're signing up to expand their IMAX network.
- I'm pretty excited for the Marvels I have to say on that front. Richard, our Executive Editor, Brian Sozzi, had the chance to talk with the CEO of Mattel. I know "Barbie's" not in IMAX theaters, but I want to play what he had to say about the success of that franchise and then I want to ask you something about it. So just hang on a sec.
RICHARD GELFOND: Sure.
- This movie is really a showcase for the cultural resonance of our brands, our ability to attract and collaborate with top talent and very importantly, our capabilities to take our brands and elevate them to create cultural moments. It speaks to the potential of Mattel Films and the significant progress we've made on our strategy to capture the full value of our IP. So it is an important moment for "Barbie", it's a milestone moment for Mattel.
- Now, as you look at that upcoming slate that he talks about, the "Barbie" is just the beginning, is that good news for you guys as well? As you look at that film slate, as you look at other upcoming films, I mean "Barbie" is not an action film but "Hot Wheels" presumably will be more of one might be a better fit for IMAX. How are you thinking about that?
RICHARD GELFOND: Well, I think the more content from whatever its source, the better for us. And I think particularly as you would guess, visually exciting content or things where audio really adds a lot or filmmakers doing different things.
And I have I agree with his take but I rotate it a little bit. I think it also has to do with great filmmakers, and I think it has to do with original IP. I mean, clearly the market is telling us that more of the same isn't going to continue to deliver more of the same results. Sequels and franchises have done OK but back to the question earlier, there's been a little fatigue around it. I think it's been a little bit exaggerated. But I also think the other part is a new way of marketing.
So I have to give Warner Brothers credit the way they marketed "Barbie". Because it wasn't a franchise, they had to be original about it, and it was fantastic. The pink house and Malibu and all kinds of crazy things. And I'd say the same thing about "Oppenheimer". I mean, I don't know if you've seen the movie or not but it's about a lot of things, not just the Manhattan Project. And I think Universal did a phenomenal job in playing off of Chris Nolan's reputation playing off the IMAX of all of it and how that made it special and also the plot.
So I think this original IP leads to original marketing. And the combination of the two I think is what led to this amazing past weekend.
ALLIE CANAL: And Richard, the overhang of all of this is the double-strike in Hollywood. You said on the earnings call that you don't believe the film slate in the back half of the year will be adjusted to account for the strike, but we have seen reports that that is being considered from Disney Warner Brothers Discovery. What's the damage that could potentially happen if those studios start to shift those schedules? And how are you safeguarding your business for that?
RICHARD GELFOND: Well, fortunately, one of the films in "Dune," which is playing pretty much at the same time as your favorite film, Marvel's. So for some reason, that move we could pivot to other films. Remember, we're not tied to one movie, we have flexibility.
Also for this year in the first quarter, 30% of our films will local language films. 30% of our box office. Second quarter, 20% of our box office. So we could also pivot to local language films. And Japanese anime is a great example. We play that not only in Japan, but it's popular all over the world.
But to your premise, I think it's very unlikely that the films the remainder of the year move. All of the films we're doing are already in the can, they're done. So you don't need the talent to really get the films finished, what you need the talent for is to promote it. And I think when they do the math on delaying them, they'd have the carrying costs on the film for another year. And with interest rates where they are now, that's not insignificant.
They've also launched their marketing campaigns. So I think about "Dune," for example, it's supposed to be phenomenal. The trailers are out, the interest is built. If you pull that back and you had to relaunch it a year from now, and who knows what it's in competition with? That would be a very difficult environment.
And then there's the IMAX of it all. Again, you look at the box office that we did for "Oppenheimer", and I would think the studios are not going to want to miss out on that. And I don't know whether we're going to be able to have an IMAX run for whenever they move it to. So as you said, it's possible, but I think the odds are slim that that will move.
- That's a really helpful breakdown of all of the factors behind all of this. Thank you so much, Richard. Really appreciate your time today.
RICHARD GELFOND: Thank you. I appreciate all of you coming. Take care.
- Richard Gelfond, IMAX CEO and our Allie Canal.
