Regarding Missing Theatrical Releases, IMAX CEO Says “The Debate Is Over.”

The CEO of IMAX is optimistic about the future of the theatrical window.

In a recent interview, the CEO of IMAX, Richard Gelfond, stated that “the discussion is gone.” “The claim that you may miss a movie’s window in theaters and make up for it by watching it on streaming services is not true. In order to obtain revenue from streaming services, the theatrical window is more important than it has ever been.”

Gelfond made reference to the significant direct-to-consumer losses that have been disclosed by streaming-facing media giants like Disney (DIS), which this week reported poor profitability due to negative macroeconomic conditions and expensive content expenses.

Following a loss of $1.1 billion in the previous quarter, Disney+, Hulu, and ESPN+ combined to lose $1.5 billion in the fourth quarter. The average revenue per user for Disney+ again fell short of expectations, coming in at $3.91 as opposed to the $4.29 that was anticipated. This shortfall was caused by a negative impact from foreign exchange and a bigger subscriber mix.

The administration has stated that it anticipates a decrease in streaming losses of around $200 million in the first quarter of 2023 and that Disney+ is still on pace to become profitable in the fiscal year 2024.
Gelfond said that the “facts are uncontroversial” when it comes to the benefits of releasing a picture in the cinema first, and he used “Top Gun: Maverick” as an example to illustrate this point. In order to avoid spreading the epidemic, Paramount (PARA) postponed the release of their summer blockbuster a total of five times. The result was a record-breaking success at the box office.

The sequel starring Tom Cruise, which did not open in theaters until nearly three years later than it had been planned, went on to earn a staggering $1.5 billion all over the world and finally became the number one digital release of all time on OTT streaming platforms.

IMAX’s Gelfond emphasized that “nearly every streaming service has now declared that they acknowledge the need for theatrical release” by stating that “so that $1.5 billion not only didn’t distract from the streaming revenue – it added to it.”

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Netflix has been an important and notable exception to this rule (NFLX).

Ted Sarandos, the co-CEO of Netflix, was quoted as saying after the firm announced its profitability for the third quarter that “we are in the business of entertaining our customers with Netflix movies on Netflix,” and that is where the company concentrates the majority of its efforts and expenditures. However, even Netflix will release the much-anticipated sequel “Knives Out 2” in select theaters of the AMC, Regal, and Cinemark chains for one week during the Thanksgiving holiday.

The announcement was met with applause from the owners of theaters, who referred to it as a “breakthrough” for the industry because of how resistant the platform has been to the inclusion of theatrical windows.

On the call with investors, however, Sarandos played down the significance of the decision, telling them as follows: “It seems as though there is always some sort of argument going on, even if it’s just back and forth. On the other hand, there is no doubt whatsoever within the company that we produce our films for our members, and we fervently wish for them to view them on Netflix.”

He went on to say that “After only one week of being shown in theaters, the vast majority of consumers will see the films on Netflix. In the same way that they watch every movie. The majority of individuals prefer to view movies at home.”

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